So how much money will consumers have in their pockets after purchasing a new vehicle? According to the “Auto Affordability Index” compiled by Comerica Bank, the purchase of an average-priced new vehicle took 24.7 weeks of median family income in the first quarter. This is down 1.5 weeks from the fourth quarter, and is also down 0.5 weeks compared to a year ago. This means that consumers have more discretionary income in their pockets to purchase specialty-equipment parts and accessories. 

Including finance charges, the total cost of buying an average-priced light vehicle was $28,200 in the first quarter, up 1.6% from a year ago. However, the median family income has increased 3.7% from a year ago, according to Comerica Bank. In others words, consumers have 2.1% more discretionary income after buying a new vehicle, assuming that all other expenditures are the same as last year.

 


“Consumers reacted to the sluggish economy, the rebound in gasoline prices and the softness in home prices by spending about $550 less per car than they did in the fourth quarter,” said Dana Johnson, senior vice president and chief economist at Comerica Bank. “That, along with the availability of more attractive financing rates, reversed somewhat more than half of the last quarter’s deterioration in affordability. With demand soft and the car companies fighting for market share, buyers were able to find pretty attractive deals on new cars in the first quarter.”

Source: Comerica Bank (May 9, 2007). “Auto Affordability Improves in the First Quarter, Comerica Bank Chief Economist Reports.” Comerica Bank Press Release courtesy of PR Newswire.

All buying decisions are made based on emotion, as are all decisions NOT to buy, according to Larry Merserearu—small business consultant, speaker and author in the field of marketing and promotion.

Emotions fall under two general categories: fear and greed. Almost any product can be advertised using either emotion. But if you really want to get your prospects’ interest, fear is the more powerful of the two.

Give your products and services some thought. What will be better about your prospects’ lives after they start using them? Will they be healthier, wealthier, wiser? That’s greed. They want to benefit that comes with using or owning your product. You arouse their interest by telling them how their life will be better.

What will they miss out on if they don’t buy? The more painful and dramatic you can make it, the more fear appeal you’ll arouse.

A landscaper selling lawn maintenance can promote the beautiful lawn the prospect will enjoy or talk about the misery of mowing and weeding their own lawn if they don’t buy. Talk about how much more golf and pool time they’ll enjoy, and you’re appealing to greed. Show a photo of an overgrown lawn full of dandelions, and you’re playing on fear.

The fear approach gives them a headache, and then offers your product or service as aspirin. People are more likely to be motivated to take fast action if it will alleviate perceived pain.

Greed motivation often takes longer to move people. That’s why direct-response advertisers like fear. They want to make their prospect pick up the phone immediately. If you want immediate response, start giving your prospects a headache.

Now, about the decision NOT to buy. If they fear that there is significant risk in buying, fear will make them say “no.” If they don’t see more value in the product or service than the cash they’ll have to part with to own it, greed will make them hang on to the cash.

For more information, go to http://promopower.com.

Source: Larry Mersereau (May 8, 2007). Fear vs. Greed. “Bringing In More Business…”(electronic newsletter).

Automakers continue to focus on new technologies that enhance driver safety. For example, electronic stability control is becoming more prevalent in the new vehicles released by the OEMs. In addition, automakers are now using electronically controlled suspensions to enhance consumers’ driving experience. For example, Tenneco Inc. recently announced that its Continuously Controlled Electronic Suspension (CES) system is featured on the new Mercedes-Benz C-Class launched in Stuttgart earlier this year. The electronically controlled suspension system continuously adjusts to road conditions and driver’s actions, resulting in enhanced ride comfort and improved stability. The system enables Tenneco to tune vehicles to adapt to different driving factors, such as braking, accelerating, steering and vehicle load, which increases the range of ride comfort and handling capability.

Tenneco’s CES system continuously adjusts damping levels according to road conditions and vehicle dynamics. At the heart of the system is an electronic control unit (ECU) that processes driver inputs and data from sensors placed at key locations on the vehicle. The sensors include three accelerometers mounted on the vehicle body and four suspension position sensors, which provide data on steering-wheel angle, vehicle speed, brake pressure and other chassis control factors. The ECU utilizes control software that processes the sensor information in real time and sends signals that adjust independently the damping level of each shock-absorber valve. Electronic dampers allow a large range between maximum and minimum damping levels and adjust instantaneously to ensure ride comfort and firm vehicle control.

“We are very pleased to supply the new Mercedes-Benz C-Class with our electronic suspension technology,” said Gregg Sherrill, chairman and CEO, Tenneco. “Our commitment to customer collaboration—from development through systems integration, ride tuning, program management and launch—helps ensure that each vehicle equipped with our advanced suspension technology has unique ride and handling characteristics.”

Source: Tenneco Inc. (May 8, 2007). “Tenneco Launches Electronic Suspension System on the New Mercedes-Benz C-Class.” Tenneco Inc. press release courtesy of PR Newswire.

According to a recent Ward’s Auto article, German manufacturer ZF Friedrichshafen AG introduced a rear-wheel drive eight-speed automatic transmission at the International Vienna Motor Symposium.

The gearbox is “designed to improve fuel economy without sacrificing performance,” according to the article. It marks the industry’s second transmission to feature eight forward gears. The first was developed by Japan’s Aisin Group and is found in Toyota’s Lexus LS 460. The ZF transmission weighs the same and will fit in a similar space as a six-speed transmission.

The gearbox will feature what ZF calls an entirely new shifting concept of four planetary gear sets and five shift elements. It is expected to improve fuel economy by 6% compared to the company’s six-speed unit, and fuel consumption is expected to be reduced by 14% over most five-speed units.

ZF says that the new transmission will be able to handle more torque than its six-speed model. The modular construction allows for an advanced automated clutch system to replace the torque converter. Although ZF refused to name any potential customers, the company did say that the eight-speed unit is compatible with most all-wheel-drive systems and supports the integration of partial (started/generator components) as well as full hybrid-electric powertrains. 

Source: Sutton, Mike. (May 7, 2007). “ZF Unwraps 8-Speed Automatic Transmission.” WardsAuto.com. Retreived May 11, 2007 from www.wardsauto.com.

Market-watchers have been particularly interested in the rash of announcements on fuel-cell (FC) vehicles that surrounded the 2007 Shanghai Auto Show and the recent funding and development news at the Hydrogen & Fuel Cells 2007 exhibition in Vancouver, according to a recent Fuel Cell Today article.

General Motors, DaimlerChrysler and Chinese manufacturers Shanghai Automotive Industrial Corporation (SAIC) and Chery have all revealed new FC vehicles in the past two weeks. These unveilings have been accompanied by optimistic soundings from the main manufacturers on how quickly FC vehicles could come to market, Fuel Cell Today notes. Nick Cappa, manager of advanced technology at DaimlerChrysler, accompanied an announcement on the upcoming Mercedes B Class FC test vehicle with a prediction that in the next five to eight years there will be as many FC vehicles as there are hybrids today. This sentiment was echoed by Todd Goldstein from GM’s fuel cell centre in California who envisaged FC cars being available to the public by 2015. At the 2007 Shanghai Auto Show in late April, GM showed off its fuel-cell-powered Chevrolet Volt concept car which combines GM’s fifth-generation FC stack with a lithium-ion battery on the E-Flex platform, the chassis that will provide the basis of GM’s next-generation global mid-range car. Two big Chinese car manufacturers used the show to announce their progress on developing FC vehicles to the world. SAIC and Chery both displayed experimental fuel-cell vehicles. At a time when they are still trying to establish themselves in international markets, Chinese automakers are already investing in FC technology in a bid to win a foothold in the next generation of technology. GM has a joint-venture technology center with SAIC in Shanghai and operates experimental fuel-cell buses in the city. China continues to represent an exciting potential market for automotive fuel cells, and the actions of the main car manufacturers there suggests they are investing in that market for the long term, according to Fuel Cell Today.

Hydrogen & Fuel Cells 2007, held this week in Vancouver, included the announcement that finally the fuel-cell program in British Columbia will get underway. Twenty fuel-cell buses are to be bought and used for a full service period of 20 years. These buses will be up and running for the 2010 Winter Olympics in Whistler, British Columbia. Ballard Power Systems, Canada’s leading FC manufacturer, announced that it has scaled back its sales outlook for two major customers, General Hydrogen and Cellex Power Products Inc., but is holding to full-year revenue expectations after a 44% rise in first-quarter revenue. Revenue climbed to $13.6 million (USD) from $9.4 million (USD).

In funding and government news, The U.S. Department of Energy (DOE) released an official Request for Information on early market activities in the hydrogen and fuel- cell development sector, perhaps a precursor to further funding for the sector, Fuel Cell Today says. An existing DOE-funded project, jointly developed by FuelCell Energy and Versa Power Systems successfully completed performance and endurance tests set by the DOE. The U.S. Fuel Cell Council has officially asked the U.S. Congress for a long-term extension to the investment tax credit for businesses and households installing fuel cells. In Europe, automotive industry representatives have pushed the case for fuel-cell technology in transport at a meeting with MEPs in Strasbourg. On the other side of the pond, the president of Fuel Cell Europe urged European politicians to show leadership on the introduction of fuel-cell technology to the automotive market, both at a regional and European level.

Several important developments have occurred in new technology in the last two weeks. U.K.-based fuel-cell materials firm Bac2 Conductive Composites has reported an enhancement in conductivity for its patented ElectroPhen polymer. Plug Power says it has achieved a “record number” of fuel-cell system installations in the first three months of 2007. The company, which makes GenCore backup power generators, said that a total of 24 systems had been installed in New York state, with the cooperation of the New York Power Authority and the state police. On the corporate front, HyRadix, a provider of on-site hydrogen generation systems, announced it has been acquired by Eden Energy Corp., a diversified clean energy company located in Perth, Australia.

Source: Butler, Jon. (May 4, 2007). Fuel Cell Today newsletter. www.fuelcelltoday.com.    

Although convertible hardtops have been around for some time, this past year has seen a huge influx of less expensive niche models with folding hardtops, according to a recent AutoWeek article. The article states, as hardtop convertible variants were introduced on vehicles, such as the Volvo C70, Pontiac G6, Volkswagen Eos, Chrysler Sebring, Mazda MX-5 and BMW 3 Series, automakers pushed their benefits: protection from the weather and theft, a quieter ride and even better body stiffness. Automakers are saying that these convertibles are selling well, perhaps signaling a growing trend for convertible hardtops.

Volkswagen says that its Eos, the automakers convertible hardtop-only model, which went on sale last fall, just posted its best month in April and is on track to meet its target of 12,000–13,000, reports AutoWeek. Sales of Pontiac’s G6 convertible have exceeded the company’s expectations and have contributed to a 38% sales increase of the G6 during the first quarter of 2007 compared to the same time last year. Mazda has reeled in additional MX-5 buyers by offering its two-seat roadster with a folding hardtop. In April, nearly a third of MX-5 sales were power-retractable hardtop models.

 

Automakers who have been in the market with folding hardtops for several years, such as Lexus with its SC and Cadillac with its XLR, say that the new and less expensive convertible hardtops are only boosting interest in the overall segment.

Source: Gritzinger, Bob and Wong, Jonathan. (May 9, 2007). “Folding Hardtops Hot: Bargain Convertibles Spark Renewed Interest in Segment.” AutoWeek. Retrieved May 11, 2007 from www.autoweek.com.

Filler for eNews

More than 550 exhibitors are expected at this year's PAACE Automechanika taking place this July 11–13 in Mexico City. To date, 30 SEMA-member companies have signed up to exhibit at the largest automotive-parts trade show in Latin America.

The Salon de SEMA section of the show will once again feature dozens of project vehicles and a center stage with "Overhaulin'" co-host AJ  introducing exhibitors and their products to buyers.

To sign up for a booth, visit www.salondesema.com, www.paaceautomechanika.com or contact Linda Spencer at lindas@sema.org.

Here are some of the companies already signed up for the Salon de SEMA section of PAACE Automechanika:

• ACCEL(a division of Mr. Gasket Co.)
• Alto Products Corp.
• Big Country
• China Economic News Service
• Delphi Corporation
• DENSO
• EMPI, Inc.
• Fairchild Industries, Inc.
• Flowmaster, Inc.
• Full Throttle Video
• Grote Industries de Mexico SA de CV
• Illinois Auto Truck Co., Inc.
• King Engine Bearings, Inc.
• Lucas Oil Products
• MacNeil Automotive Products Limited
• Midtronics, Inc.
• Motorad of America
• Myron and Davis
• Parasol Internacional De Mexico S.A. de C.V.
• Performance Depot
• Pro-Cut International
• Prosil/Magnaflow
• Putco Inc.
• Reaco, S.A. de C.V.
• Rhino Linings USA, Inc.
• Sonnax
• Street Glow, Inc.
• United Engine & Machine Co.
• Walker Products, Inc.
• Wellman Products Group
  

SEMA-member companies that would like to receive the SEMA PAC Newsletter featuring up-to-date information on Capitol Hill, friends and allies in Washington D.C., and information on SEMA PAC activities, are invited to click here. For more information regarding the SEMA Political Action Committee, contact Linda Spencer at lindas@sema.org. 

Learn how much money you can save on shipping through the SEMA Freight Savings Plan by participating in the SEMA Freight Savings Program webcast today (Thursday, May 3) at 10 a.m. (PST). 

By using the collective strength of the association’s membership to secure substantial discounts with specific carriers, SEMA members save an average of $2,000 on shipping costs. Carriers include: FedEx Express, Fed Ex Ground and FedEx Freight, Roadway, Central Freight Lines and New Penn Motor.

For information on how to participate, visit www.sema.org/webinars.

All SEMA webinars are recorded, making it possible for members to view the presentation and listen to the audio recordings at a later date. Past webinar topics include:

MAP and Resale Price Policies (AKA Colgate Policies)
Presented by Barbara Sicalides
To download the audio and video portion of the webinar, click here.
To download the PowerPoint presentation as a PDF file, click here.

How to Deliver World-Class Parts Service (Jobber)
Presented by Gary Naples
To download the handout as a PDF file, click here.
To download the audio and video portion of the webinar, click here.
To download the PowerPoint presentation as a PDF file, click here.

SEMA State of the Association
Presented by Chris Kersting, SEMA President and CEO, and Mitch Williams, SEMA Chairman of the Board
To download the audio and video portion of the webinar, click here.
To download the PowerPoint presentation as a PDF file, click here.

Facts About Installer Certification
Presented by Ellen McKoy, SEMA Senior Director, Dealer Relations
To download the audio and video portion of the webinar, click here.
To download the PowerPoint presentation as a PDF file, click here.

How Manufacturers Can Communicate More Effectively With Distributors and Customers
Presented by Walter Vaughan, Steele Rubber Products and compiled by Scott O'Toole, Motor State Distributing
To download the audio and video portion of the webinar, click here.
To download the PowerPoint presentation as a PDF file, click here.

Management Strategies for the Most Challenging Situations
Presented by Tom Shay, Profits+Plus Inc.
To download the audio and video portion of the webinar, click here.
To download the PowerPoint presentation as a PDF file, click here.

More webinar presentations and recordings are available at www.sema.org/webinars.