Below is a roundup of recent and proposed legislative and regulatory actions around the world that will directly impact the specialty-equipment industry. For more information on any of these items, contact SEMA International Relations Director Linda Spencer at lindas@sema.org.

On SEMA.org, you’ll find a recent SEMA webinar devoted to customer service. If you missed this presentation, we hope you get a chance to download it. It contains valuable tips that apply to any business, large or small. The webinar is also a tool to remind everyone in your company that customer service isn’t a department, it’s a moment-to-moment attitude.

Here at SEMA, we are fundamentally a service organization. We’re here to help our members’ businesses succeed and prosper. Part of that comes by producing a world-class trade show, but SEMA can’t be excellent without working closely with our customers—and providing great service. Since the only way to improve is to recognize where you have an issue, we’ve initiated processes to encourage feedback. Since 2008, we’ve conducted an annual study that measures member satisfaction. We find that in certain categories, a high percentage of members are either “satisfied” or “very satisfied,” but each study has also showed us where we have some work to do.

One fundamental change we’ve made recently was aimed at improving our ability to handle callers. We put in a new phone system that allows people to dial directly, but more importantly, when calls do land at the switchboard, it goes to a customer service specialist who makes sure the right person follows up.

After the call, we regularly send out a two-minute customer service survey that solicits specific feedback about the interaction. These are the kinds of improvements any business can make—not by hiring more workers, but by refocusing the responsibilities of the people they already have.

We’ve also instituted Town Hall Meetings with our members. The premise is simple: There is no better way to find out what is on your customer’s mind than face-to-face interaction. We’ve put three Town Hall Meetings on the calendar for the first six months of 2011, and we’d be thrilled to see you at the next one, April 8, in Fort Worth, Texas. You can check the schedule by pulling down the “Events” tab on SEMA.org.

Another way we are improving service is through our Exhibitor Summit meetings. That’s where we invite SEMA Show exhibitors to meet with us in advance of the SEMA Show to explore ways to improve ROI from the SEMA Show. Feedback from meetings such as these helps us hone our Show operations. Look under the “Events” tab on SEMA.org for scheduling and to sign up.

Experts will tell you that customer service is a continuous process. No matter how much progress is made from one year to the next, it’s never done. You can always get better. Speaking for ourselves, we intend to keep the throttle on, and the service level moving in the right direction.

—Chris Kersting, SEMA President and CEO

SEMA and its Automotive Restoration Market Organization (ARMO) and Hot Rod Industry Alliance (HRIA) councils announced July 8, 2011 as Collector Car Appreciation Day. The date marks the second commemoration in what will become an annual event to raise awareness of the vital role automotive restoration and collection plays in American society. SEMA and its councils are now working to secure a Congressional resolution to recognize the day’s significance.

S. Res. 513 was sponsored by Congressional Automotive Performance and Motorsports Caucus members Senator Jon Tester (D-MT) and Senator Richard Burr (R-NC). Senators Tester and Burr have been strong advocates for the automotive hobby in Washington, and the resolution reaffirmed their understanding of the cultural importance of collector cars. The caucus is an informal, nonpartisan group that pays tribute to America’s ever-growing love affair with the car and motorsports. The caucus recognizes the integral role collector cars have played in fostering our nation’s appreciation for the automobile’s unique historical place in our history.

“On July 8, 2011, collectors and enthusiasts will host hundreds of events across the country,” said Laura Bergan, chairman of SEMA’s Automotive Restoration Market Organization (ARMO) council. “We will proudly partner with individuals, car clubs and businesses as they organize car cruises, club gatherings and other educational events to celebrate the day.”

SEMA will maintain a list of scheduled events to commemorate America’s time-tested love affair with the automobile. Individuals, car clubs and business owners interested in publicizing events should contact Mike Dingell, director of the SEMA Action Network, at 202/783-6007 x38 or miked@sema.org. Visit here for a listing of Collector Car Appreciation Day events. If you are unable to celebrate on July 8, SEMA encourages events to be scheduled throughout the month of July.

All of the dealership sources we contacted agreed with the report’s most basic premise: Accessories help sell new vehicles. The study provides information about the effects customized vehicles can have on the decision-making process of new-vehicle buyers. It looks at those effects on an array of different consumers, including those who do not normally modify their cars or trucks, as well as those who do, and those who are most ardent about customization.

“We do quite a bit of accessorizing on our in-stock vehicles,” said Terry Miller, general sales manager of Galpin Ford in Van Nuys, California. “Before reading the report, I thought that most people got their information from magazines or shows, things like that. But the study demonstrates that new-car buyers often go online to look at a vehicle on display in a showroom. They either buy that car or buy the accessories that were on the car. After reading the report, I thought I should take another look at what we have in inventory and possibly select more models for customization—or, as we call it, Galpinization.”

“The ‘Key Findings’ segment of the report showed that 14% of new-car buyers accessorize their vehicles, but differences in regions could change those percentages quite a bit,” McCord said. “In Southern California, you see vehicles that have been accessorized or modified to some degree every day. At Galpin Ford, we accessorize about 15% of our new-car inventory and show those vehicles prominently in our display areas. Those vehicles allow us to offer accessories to non-modifiers who otherwise might not consider an accessory because they don’t know the option is available.”

		The information contained in the report is valuable not only to the sales department but also to service staff. It includes a wealth of data on accessory influence among consumers who are enthusiastic about modifications as well as those who choose not to personalize their vehicles. Courtesy of Vogue Tyre and Rubber Co.

“A lot of statistics went into the study,” Kemp said, “and it shows that customers definitely like to do business with somebody they know and trust, and they also like to see the product on the car. People may see a product on the road, but they don’t realize that it’s available for their vehicle, so you need to have the products that you’re trying to promote on a car for display. The report makes people more aware that sales and service need to work as a team.”

McCord agreed, pointing out that communication between departments is crucial.

“The report shows that keeping our sales and service departments informed on accessorizing trends in our sales meetings is one area of opportunity,” he said. “We do a pretty good job of letting our departments know what’s hot and what’s not in the accessorizing world, but I know we could do better.”

Steve Hofer, parts and service director of Park Chrysler Jeep in Burnsville, Minnesota, said that the report gave him new insight about the importance of customization on new-vehicle sales.

“I keep coming back to the idea that 9% of people were influenced in their car purchases based on the vehicle being accessorized,” he said. “That was news to me. I was under the assumption that I needed to display accessories for the customer to see and to feel good about an accessory purchase. I’ve never really looked at it from the standpoint that the accessories themselves can influence the vehicle purchase.”

		Question: Did the availability of parts for the (insert vehicle name) influence you to buy that vehicle versus a different vehicle? Source: AutoPacific Authoritative Automotive Research & Insight

Randy Baker, managing partner of Batchelor Cadillac in San Antonio, Texas, said that his dealership uses a “show book” filled with photographs of customized vehicles to help customers visualize the accessories they may wish to include with their purchase. Even so, the report’s conclusion that display vehicles are the best accessory sales tools has him rethinking a catalog that the dealership just produced.

“The study shows that the vast majority of accessory sales in a dealership were because people saw them on the vehicle,” he said. “People come in and see something that will freshen up their cars even if they’re two years old. When we weren’t as active at selling accessories, people would come back a month after we sold them a car, and they had installed aftermarket tires and wheels on it. We had missed an opportunity to sell the accessory. Even worse, they sometimes didn’t buy a product that was right for the car.”

Supplying accessories that are properly designed and fitted for a specific make and model is obviously a major concern for new-car dealerships and has caused some original-equipment manufacturers (OEM) to question the quality of specialty-equipment products.

“The OEM position is that their products are engineered and built for that specific vehicle,” Baker said. “They are very concerned with performance and liability, while customers are moved by emotion and aspiration. That’s why warranty issues are so important. We put on quality products, and we don’t go overboard with anything. We want to sell only products that the customer will have a good experience with, and our warranty is for the life of the car. As long as the customer owns the vehicle, we take care of the accessories.”

Hofer said that the report will help his dealership and his parts department focus their efforts on the most popular accessories and modifications, allowing the organization to target its energies on accessory segments that sell and avoiding those that do not. He said that doing so will not only help the bottom line, but will also keep the new-car sales staff involved and motivated as they see success more quickly.

McCord said that Galpin would also use the trends shown in the report to help its various departments determine which products to carry and, therefore, those most likely to produce satisfied customers. Most consumers are comfortable purchasing products complete and ready to drive away from the dealership, he said, and the report shows that customer satisfaction is slightly higher among vehicle modifiers than non-modifiers.

“Hot items, such as audio, video and wheels and tires, are areas of opportunity,” he explained. “If we stay on top of statistics and trends, we can help control our inventory.”

Hofer said that he intends to use the report as a training aid for his staff, especially in new-product selection. He believes that the data will help him pinpoint commodities using factual information and real-world numbers.

		Most consumers are comfortable purchasing products complete and ready to drive away from the dealership, and the report shows that customer satisfaction is slightly higher among vehicle modifiers than non-modifiers.

Baker said that the enthusiasm generated by accessorized cars brings additional buyers into his dealership in San Antonio. Batchelor Cadillac receives business specifically because people see a neighbor’s or an associate’s car and want something similar or even more personalized. He said that he plans to share the information contained in the report with his key managers to reinforce their efforts. Hofer said that the physical layout of the report adds to its value as a training tool.

“I like all the facts, but I’m a visual person, so I also liked the way the facts were laid out,” said Hofer. “The report will help us target our marketing to groups of people who may want to accessorize their vehicles. From my perspective, proper accessorization can help build brand awareness.”

All of the dealership sources we contacted agreed with the report’s most basic premise: Accessories help sell new vehicles. The study provides information about the effects customized vehicles can have on the decision-making process of new-vehicle buyers. It looks at those effects on an array of different consumers, including those who do not normally modify their cars or trucks, as well as those who do, and those who are most ardent about customization.

“We do quite a bit of accessorizing on our in-stock vehicles,” said Terry Miller, general sales manager of Galpin Ford in Van Nuys, California. “Before reading the report, I thought that most people got their information from magazines or shows, things like that. But the study demonstrates that new-car buyers often go online to look at a vehicle on display in a showroom. They either buy that car or buy the accessories that were on the car. After reading the report, I thought I should take another look at what we have in inventory and possibly select more models for customization—or, as we call it, Galpinization.”

“The ‘Key Findings’ segment of the report showed that 14% of new-car buyers accessorize their vehicles, but differences in regions could change those percentages quite a bit,” McCord said. “In Southern California, you see vehicles that have been accessorized or modified to some degree every day. At Galpin Ford, we accessorize about 15% of our new-car inventory and show those vehicles prominently in our display areas. Those vehicles allow us to offer accessories to non-modifiers who otherwise might not consider an accessory because they don’t know the option is available.”

		The information contained in the report is valuable not only to the sales department but also to service staff. It includes a wealth of data on accessory influence among consumers who are enthusiastic about modifications as well as those who choose not to personalize their vehicles. Courtesy of Vogue Tyre and Rubber Co.

“A lot of statistics went into the study,” Kemp said, “and it shows that customers definitely like to do business with somebody they know and trust, and they also like to see the product on the car. People may see a product on the road, but they don’t realize that it’s available for their vehicle, so you need to have the products that you’re trying to promote on a car for display. The report makes people more aware that sales and service need to work as a team.”

McCord agreed, pointing out that communication between departments is crucial.

“The report shows that keeping our sales and service departments informed on accessorizing trends in our sales meetings is one area of opportunity,” he said. “We do a pretty good job of letting our departments know what’s hot and what’s not in the accessorizing world, but I know we could do better.”

Steve Hofer, parts and service director of Park Chrysler Jeep in Burnsville, Minnesota, said that the report gave him new insight about the importance of customization on new-vehicle sales.

“I keep coming back to the idea that 9% of people were influenced in their car purchases based on the vehicle being accessorized,” he said. “That was news to me. I was under the assumption that I needed to display accessories for the customer to see and to feel good about an accessory purchase. I’ve never really looked at it from the standpoint that the accessories themselves can influence the vehicle purchase.”

		Question: Did the availability of parts for the (insert vehicle name) influence you to buy that vehicle versus a different vehicle? Source: AutoPacific Authoritative Automotive Research & Insight

Randy Baker, managing partner of Batchelor Cadillac in San Antonio, Texas, said that his dealership uses a “show book” filled with photographs of customized vehicles to help customers visualize the accessories they may wish to include with their purchase. Even so, the report’s conclusion that display vehicles are the best accessory sales tools has him rethinking a catalog that the dealership just produced.

“The study shows that the vast majority of accessory sales in a dealership were because people saw them on the vehicle,” he said. “People come in and see something that will freshen up their cars even if they’re two years old. When we weren’t as active at selling accessories, people would come back a month after we sold them a car, and they had installed aftermarket tires and wheels on it. We had missed an opportunity to sell the accessory. Even worse, they sometimes didn’t buy a product that was right for the car.”

Supplying accessories that are properly designed and fitted for a specific make and model is obviously a major concern for new-car dealerships and has caused some original-equipment manufacturers (OEM) to question the quality of specialty-equipment products.

“The OEM position is that their products are engineered and built for that specific vehicle,” Baker said. “They are very concerned with performance and liability, while customers are moved by emotion and aspiration. That’s why warranty issues are so important. We put on quality products, and we don’t go overboard with anything. We want to sell only products that the customer will have a good experience with, and our warranty is for the life of the car. As long as the customer owns the vehicle, we take care of the accessories.”

Hofer said that the report will help his dealership and his parts department focus their efforts on the most popular accessories and modifications, allowing the organization to target its energies on accessory segments that sell and avoiding those that do not. He said that doing so will not only help the bottom line, but will also keep the new-car sales staff involved and motivated as they see success more quickly.

McCord said that Galpin would also use the trends shown in the report to help its various departments determine which products to carry and, therefore, those most likely to produce satisfied customers. Most consumers are comfortable purchasing products complete and ready to drive away from the dealership, he said, and the report shows that customer satisfaction is slightly higher among vehicle modifiers than non-modifiers.

“Hot items, such as audio, video and wheels and tires, are areas of opportunity,” he explained. “If we stay on top of statistics and trends, we can help control our inventory.”

Hofer said that he intends to use the report as a training aid for his staff, especially in new-product selection. He believes that the data will help him pinpoint commodities using factual information and real-world numbers.

		Most consumers are comfortable purchasing products complete and ready to drive away from the dealership, and the report shows that customer satisfaction is slightly higher among vehicle modifiers than non-modifiers.

Baker said that the enthusiasm generated by accessorized cars brings additional buyers into his dealership in San Antonio. Batchelor Cadillac receives business specifically because people see a neighbor’s or an associate’s car and want something similar or even more personalized. He said that he plans to share the information contained in the report with his key managers to reinforce their efforts. Hofer said that the physical layout of the report adds to its value as a training tool.

“I like all the facts, but I’m a visual person, so I also liked the way the facts were laid out,” said Hofer. “The report will help us target our marketing to groups of people who may want to accessorize their vehicles. From my perspective, proper accessorization can help build brand awareness.”

The honor paid tribute to the years of service Brothers has devoted to the racing industry with the various companies under the Comp umbrella—particularly Comp Cams, a brand he helped shepherd to prominence in many forms of motorsports.

“Recently, the efforts of Scooter Brothers and the entire team at Comp Performance Group have been dedicated to the concept of maintaining a healthy race industry first,” said Dick Berggren’s Speedway Illustrated publisher Karl Fredrickson. “It is our privilege at Dick Berggren’s Speedway Illustrated to recognize Scooter and the entire team at Comp Performance Group.”

A drag racer in his youth, Brothers joked that he was “poisoned” by the racing bug early in life. A stint with Racing Head Service led to his involvement with Comp Cams in the ’80s. Since then, his name and face—as well as the Comp logo—have become familiar to drivers, mechanics, race organizers and his fellow captains of the motorsports industry.

Brothers, a native of Memphis, Tennessee, is no stranger to being honored by his motorsports peers. Among his past laurels was his 2005 induction into the SEMA Hall of Fame—the highest honor bestowed by SEMA.

Independent American Team Earns 2011 Dakar Rally Victory, Makes History

		With her first-place finish in the Open Production Class of the 2011 Dakar Rally, Sue Mead became both the first U.S. female driver of record and first woman to achieve an automotive class win.

According to 2011 Dakar Rally veteran Chris Collard, “It is considered one of the top five adventures in the automotive world, and on the mental bucket list of every red-blooded off-road racer.”

Recently, Collard served as media manager for the only independent American team to enter the 2011 Dakar Rally. Driving the Fabschool-General Tire Ford Raptor to a first-place finish in the Open Production Class and 40th overall was American auto journalist Sue Mead and team manager and co-driver Darren Skilton. With her victory, Mead became both the first U.S. female driver of record and the first woman to achieve an automotive class win. Joining Mead, Skilton and Collard in the history books were two team mechanics: Troy Johnson, owner of the FabSchool in Riverside, California, and Dan Moore, one of the FabSchool’s chief instructors.

The FabSchool’s Fall 2010 class of students performed the Raptor’s modifications, which included bumper fabrication as well as the installation of a fuel cell and rollcage, Deaver springs, King bypass shocks and an ARB air locker. Additional upfitting included Soltek LED lights, Odyssey batteries, Cobra Racing seats and Crow safety harnesses. XPEL protective film helped protect the paint and glass on the front clip and windshield. And finally, for help traversing the endless dunes of the Atacama Desert, the team utilized an Advanced Air Systems PowerTank for the dozens of times they needed to deflate and
re-inflate their tires for sand driving.

Clearly enjoying the victory, Collard told SEMA News that the team’s story isn’t finished yet.

“Why, I don’t know,” he said, “but for some twisted reason, our team is already planning for next year.”

		A street/strip big-block Chevy engine will be raffled to support “Project 1320,” a documentary film series chronicling the history of drag racing.

The engine, dubbed “Mondello’s Vintage Rat,” is designed to run on pump gas and will be complete (including ignition) from the carburetor to the oil pan and from the nose pulley/harmonic damper to the flexplate. It will be a 555ci Chevrolet (MK IV version), with a single four-barrel carburetor and will be designed for use with an automatic transmission.

“Joe proposed the engine raffle following the SEMA Show,” said Traci Hrudka, Foundation chairman. “The members of the Foundation’s board of directors welcomed the proposal, and we have been working with Joe regarding the engine and the mechanism for the raffle. This will be the first of a series of ‘Save Our Heritage’ engine raffles in conjunction with leading engine builders.”

The raffle tickets will be available at events where the Quarter Mile Foundation will have a presence, as well as the Foundation’s website (www.project1320.com), according to Hrudka. Tickets will be priced at $10 each or six for $50. The winner will be drawn at the Performance Racing Industry Show on December 3, 2011.

SEMA News: What are the latest advances in electronics, including entertainment, navigation and interactive car-to-car and car-to-infrastructure systems?

John Waraniak: Vehicle electrification, electronics integration and connected-vehicle technologies are leading the way toward the development of cars that don’t crash, devices that don’t distract and powertrains that don’t pollute. Automotive technology has extended far beyond the vehicle itself. Onboard vehicle technologies combined with vehicle-to-vehicle and vehicle-to-roadside technologies are creating many new and exciting product and service opportunities for specialty-equipment and performance aftermarket manufacturers, installers, retailers and distributors. The challenges, opportunities and solutions for SEMA members lie in how effectively these features, devices and accessories can be integrated into today’s vehicles.

Technology is integral to both the relevance and the future of SEMA and the performance aftermarket. To ignore its impact is a fundamental mistake. More than half of the new vehicles offered in five years will support applications through car-radio platforms. By 2017, more than 13 million vehicles will be sold globally with connected-vehicle platforms. Aftermarket suppliers currently provide more than 35 radios supporting apps via smartphone integration and new operating systems, such as the Android that was featured on the Clemson Deep Orange vehicle displayed at the 2010 SEMA Show.

SEMA recently met with Peter Appel, administrator of the U.S. Department of Transportation’s Research and Innovative Technology Administration (RITA) to discuss vehicle-to-vehicle (V2V) technology and other advanced automotive electronics opportunities for SEMA members. SEMA is working with RITA leadership to promote the aftermarket industry’s contributions to deploying V2V and onboard technologies.

Connected vehicles have the potential to avoid crashes and make the transportation grid more efficient. Green performance and connected-vehicle technologies are quickly merging to create new business and product-development opportunities in integrating automotive and consumer electronics apps and solutions. Appel will participate again as a speaker in the Driving Connected session in the Vehicle Technology Center at the 2011 SEMA Show. He also briefed us on a new competition program launched by U.S. Transportation Secretary Ray LaHood on accelerating the development of connected vehicles and technologies.

The program announced by RITA is a nationwide competition seeking ideas for using wireless connectivity between vehicles to make transportation safer, greener and easier to use. During the Connected Vehicle Technology Challenge competition, RITA will accept ideas for products and applications that use dedicated short-range communications, which is a fast, secure wireless technology created specifically for connected vehicles and the evolving infrastructure. The challenge is a great opportunity for SEMA members to showcase their use of innovative new products and cutting-edge technologies.

SN: Several of the automakers are now selling battery electric vehicles (BEVs). How will electric cars and advanced vehicle technologies affect the performance and enthusiast marketplace?

JW: President Obama said in his State of the Union speech that technology innovation will be the nation’s “Sputnik moment,” and that the economy’s priorities will be focused on industries such as clean energy and advanced technology. His plan is to have one million advanced-technology electric vehicles on the road by 2015. This is a tough challenge because only 20,000 electric vehicles are expected to be sold this year. It took Toyota 10 years to sell one million Prius hybrids, and hybrid sales peaked at 353,000 in 2007.

		Today’s vehicles are not just a collection of 5,000 loosely integrated parts. They are an interdependent “system of systems,” connecting body, chassis, interior and powertrain systems through more than 150 controllers and 10 million lines of code and embedded software.

Forcing electric vehicles on the market will not make them sell. President Obama is also working to realign the U.S. government’s vehicle-technology priorities. The White House’s proposed budget for 2012 would end federal government programs that fund hydrogen fuel cell research and efforts to develop clean diesel engines and retrofit older diesels. The budget proposes diverting funds from a dozen energy company tax breaks to help pay for putting the one million electric vehicles on the road by 2015 and help grow the market for electric cars. The budget proposal would transform a $7,500 tax credit for buyers of plug-in electric cars into a rebate at the dealership so that purchasers would not have to wait to claim the credit on their tax returns.

Advanced vehicle technologies go beyond battery-driven electric motors. The kinetic energy recovery hybrid system featured in the Porsche 918 RSR stores and releases energy without batteries. The kinetic hybrid system uses a flywheel to capture energy during braking from front-wheel motor hubs. Regenerative braking charges the flywheel, and the driver presses a button to access the energy, generating up to 75 kilowatts and adding more than 200 hp to the 918’s 560 hp. Power electronics is the new horsepower and represents an emerging technology in the performance aftermarket and new opportunities for the next generation of hot rodders and enthusiasts.

Automotive OEMs are also working with lightweight materials and advanced technologies to reduce the mass of each new generation of vehicles, optimize system integration and refine aerodynamics. Experts estimate that every additional 100 lbs. of weight a vehicle has to carry reduces fuel efficiency by 1%–2%. The new eco-version of the Chevy Cruze has lower fasciae and an aerodynamic shutter that closes to increase fuel efficiency.

SN: How is the industry addressing increasing vehicle complexity and cross-industry product development?

JW:

Products, processes and profits are inextricably linked. Lean customization, like lean production, is a paradox. On one hand, every activity, task and flow of work is rigidly scripted. Yet at the same time, lean operations are very flexible and responsive to customer demand. Designing for customization is the intersection of design, technology and the customer experience. Designing for customization and lean-customization principles cast the biggest shadow on profitable personalization. Commoditization, standardization and commonization actually drive customization.

Lean-customization principles can make the difference between built-in profits and reverse-engineered costs. The OEMs are being driven to reduce vehicle complexity while simultaneously increasing the flexibility to build more models and variants off of fewer platforms. Aftermarket companies and dealers can also help take the complexity out of assembly plants by collaborating with OEMs to develop product plans and vehicle architectures with cost-effective, simplified bills of material that can be profitably customized with factory and aftermarket-branded parts and accessories at dealers, customization centers and independent installers.

		A virtual test method was demonstrated at the SEMA Show last year. In the demonstration, a virtual model of a modified Ford F-150 supplied by Superlift Suspension Systems was created in CarSim and was connected to the ESC controller and brake system of the actual vehicle.

Enlightened automakers, consumer-electronics manufacturers, aftermarket companies, dealers and installers recognize that they need to work together to ensure that they can personalize vehicles and add future capabilities profitably. Open innovation and collaboration are essential for growth. Ford’s signature technologies—SYNC and EcoBoost—are great examples of Ford’s collaboration and personalization strategy for driving connected and driving green. Automakers and aftermarket companies that do not know how to apply collaborative value-chain practices and technologies will be beaten by those who do.

Collaboration is not a hobby. It’s not easy to collaborate. It’s an unnatural act. Mazda, for example, will launch a hybrid using Toyota technology in 2013. Successful OEMs will rely more on the aftermarket to reach new markets and segments with increased personalization and lower costs. The old approach of proprietary architectures and closed systems hasn’t died yet, and the new approach to open innovation and collaboration is
just beginning.

SEMA’s innovative partnership with the Clemson University International Center for Automotive Research (CU-ICAR) is an excellent example of open innovation and generative thinking in action. SEMA and CU-ICAR have teamed up to offer SEMA members access to world-class resources, including a 580hp engine dynamometer test cell, a dual-column full-vehicle coordinate measuring machine, a seven-post road simulator in an environmental chamber, an electromagnetic compatibility chamber and a 500hp four-wheel chassis dynamometer in an anechoic chamber.

SN: What is the state of modern musclecar technology—high-performance vehicles, such as the new Camaro, Mustang and Charger—and how will it affect SEMA-member companies?

JW: While many SEMA companies feared that advanced technologies signaled the demise of the specialty-equipment market and believed tighter federal emissions and fuel-efficiency standards would eliminate performance vehicles from America’s roadways, something quite different is happening. Green muscle is alive and well and took center stage at many of this year’s auto shows. Leading automakers are focusing on matching horsepower with the fastest computing power.

Horsepower still moves product. Nearly every major automaker now offers a performance car for street use that is as powerful as many of the race cars on the track. The Cadillac CTS-VR is equipped with a supercharged V8 that pumps out 556 hp. The new supercharged V8 Camaro ZL1 offers 550 hp and 550 lb.-ft. of torque. Chevy will introduce a new limited-edition Camaro every six months. The ’11 Mustang with an aluminum V6 makes 305 hp and gets 31 miles per gallon. The ’12 Dodge Charger SRT8 delivers an exceptionally mean version of its flagship sedan to the tune of 465 hp from an even larger Hemi V8. The engine grows from 6.1L to 6.4L with 465 lb.-ft. of torque.

Advanced engine and transmission technologies, such as cam phasing, variable valve timing, port deactivation, direct injection, turbo boosting, dry dual clutches and wide-ratio six-speed-plus gearing, combined with reduced mass, decreased parasitic losses and integrated engine and transmission control software have improved the internal-combustion engine in these vehicles to efficiencies that would have been unbelievable just five years ago.

SN: General Motors released information recently about an OnStar mirror that will be retailed for non-GM vehicles. How will those types of innovations impact SEMA companies?

JW: Telematics and connected-vehicle technologies may not seem that pervasive in the automotive aftermarket yet, but that is changing quickly, as evidenced by the new vehicles on display at this year’s auto shows. Ford’s voice-activated SYNC platform continues to evolve with new features and capabilities and has been installed in more than 3 million vehicles. More than 80% of Ford buyers take the SYNC option, and Hyundai is launching its own system called Blue Link.

The recently introduced aftermarket version of OnStar is embedded in a replacement rearview mirror and sells for $299 plus a $100 installation. Expect more automakers, aftermarket suppliers, app developers and installers to form collaborative partnerships to leverage infotainment innovations and capitalize on this growing market. Ford CEO Alan Mulally summed up vehicle connectivity very well when he said: “It’s cool to connect. But it’s past cool. It’s a reason to buy!” I would add that if you think it’s too connected, you are too old. GenGreeners, the next generation of car buyers and enthusiasts, are under 16 years old today and will be the first generation to grow up with the choice of an electric, a hybrid or an internal-combustion engine as one of their buying options.

		Ralph Gilles, senior vice president of product design and president and CEO of the Dodge Car Brand, Chrysler Group LLC, shown here with the newly introduced Dodge Charger SRT8, summed up the future of performance and customization very well. “Everyone is a car person,” he said. “Some just don’t know it.”

JW: Millions of people have powerful smart phones that are loaded with a variety of capabilities, such as Pandora’s Internet radio app, that consumers can use in their vehicles. BMW’s MINI and aftermarket companies are taking advantage of Apple’s iPhone capabilities and offering an automotive-grade iPod interface that supports Apple’s iPod Out through the MINI connected system. The iPod screen appears in the vehicle’s display screen. Drivers are familiar with the screen, so it is less distracting than adding
another interface.

Distracted driving is certainly a concern for both OEMs and aftermarket companies that are providing connected-vehicle products, apps and solutions. An estimated 20% of injury crashes were reported to have involved driver distraction. Glances away from the road for more than two seconds for any purpose double the risk of a crash or near crash. Many drivers—particularly GenY’ers, which is the largest generation ever—understand the risk and will find ways to stay connected and be on the grid while driving. Forcing them to go off the grid and not be connected with their friends and networks while driving is not a feasible solution.

The app is just as important as the content. I asked a panel of six experts at a recent Society of Automotive Engineers (SAE) discussion on automotive and consumer electronics what feature, function, system or app would be most significant in the next five years and if it would come from inside or outside the auto industry. Five of the six said it would come from outside the auto industry.

JW: ESC monitors vehicle motion. When loss of control is imminent, ESC strategically applies the brakes to help stabilize the vehicle. Similar requirements for the rest of the global community are contained in the United Nations Economic Commission for Europe 13H regulations.

Compliance with FMVSS is normally the responsibility of vehicle manufacturers; however, SEMA has taken a proactive approach and developed a methodology and program to evaluate the ESC performance of aftermarket-modified vehicles. To actually test every vehicle configuration is cost prohibitive for OEMs and the aftermarket, so SEMA sought outside help from leading industry experts and companies in the area of vehicle dynamics simulation and testing to develop a “best practices” solution to offer member companies. It’s important to note that any modification to the engine, steering, brakes, suspension, wheels or tires may have an impact on
ESC performance.

A virtual test method was demonstrated at the SEMA Show last year, drawing on the controls-development experience of Advanced Controls Engineering Consultants LLC, the CarSim vehicle dynamics simulation produced by Mechanical Simulation Corporation and the hardware-in-the-loop (HIL) technologies of dSPACE GmbH. A modified Ford F-150 supplied by Superlift Suspension Systems was used as the test vehicle. In the demonstration, a virtual model of the vehicle was created in CarSim and was connected to the ESC controller and brake system of the actual vehicle.

The CarSim software provides not only a dynamic model of the pickup, but also a virtual proving ground on which to conduct the tests. It also includes steering and throttle inputs that are required to execute the sine with dwell (SWD) test maneuver. CarSim connects to the ESC controller on the vehicle through the dSPACE hardware.

		Neil Young demonstrated the entrepreneurial spirit of SEMA members and performance enthusiasts everywhere with his keynote remarks and the introduction of his ’59 Lincvolt at the Green Performance session during last year’s SEMA Show. Courtesy Steve Cross, Courtesy of Shakey Pictures

An ESC-HIL demonstration with expanded vehicle simulation capabilities will be set-up in the SEMA Vehicle Technology Center (VTC) at this year’s SEMA Show, where attendees can see the latest advanced vehicle technologies impacting the specialty-equipment and performance aftermarket industry today and in the immediate future.

SN:The aftermarket is being bombarded with green technologies and advanced electronics. Other industries are dedicated to technologies that are peripheral to automobiles but don’t address the vehicles themselves. SEMA members do. How is SEMA increasing its relevance as technological innovation expands?

JW: One very exciting element of our vehicle technology strategy is to create the SEMA Vehicle Technology Center at the SEMA Show. The VTC will showcase SEMA’s vehicle technology programs and partners and the benefits to members. The VTC and its Tech Zones are being designed to reinforce our efforts to appeal to emerging-technology enthusiasts and bring greater focus, urgency and performance aftermarket relevance to our advanced-technology offerings. We also want to put vehicle technology on the front lines, similar to what GM and Ford have done recently with the creation of new chief technology officer positions.

The purpose of the VTC is to inform and educate SEMA members. We also want to increase member participation in and understanding of the programs, partnerships, services and systems as well as product and vehicle development tools, methodologies and resources that are available at affordable costs to SEMA-member companies.

The seminars will focus on the future of performance and customization, branding performance, marketing to enthusiasts, designing for customization, vehicle dynamics of aftermarket-modified vehicles, green performance and connected-vehicle technologies. The physical platform and exhibit space in the VTC will showcase SEMA-developed solutions with technology simulations, demonstrations and workshops to introduce members to the benefits of SEMA vehicle technology programs and partners.

SEMA is continually working to develop vehicle technology solutions and build relationships that foster collaboration between the automakers, the original-equipment suppliers, dealers, research organizations, industry associations and member companies. SEMA’s Vehicle Technology Center will provide members with in-depth information and hands-on understanding from leading industry experts about advanced vehicle technologies and emerging systems to help them understand the impact on their business today, as well as prepare for and leverage tomorrow’s technologies and business opportunities.

SN: What should SEMA members understand in a general sense about the role of technology in the future of the automobile?

JW: Advanced vehicle technologies are driving the future of performance and customization. Both the automobile and the industry are being reinvented. Systems are moving from mechanical to electrical. Vehicles are moving from standalone to connected, and markets are moving from mass production to niche segments and personalization.

Innovation is the engine of growth. Growth in the new auto normal doesn’t lie in disrupting large, over-served markets but in disrupting small under-served markets and emerging segments focused on product differentiation, performance and customization.

Eco-friendly vehicles will remain a niche segment for the next decade despite all the hype and headlines. Performance vehicles will also continue as a niche segment. Both will coexist as advanced vehicle technologies are developed and deployed. Hybrids and electric vehicles will make up less than 10% of the vehicle market by 2020, and while many consumers consider themselves performance enthusiasts, that market segment will be about 10% as well.

My good friend, Ralph Gilles, senior vice president of product design and president and CEO of the Dodge Car Brand, Chrysler Group LLC, and a longtime SEMA advocate, recently launched his “Never Neutral” campaign and summed up the future of performance and customization very well. “Everyone is a car person,” he said. “Some just don’t know it.”

SEMA News: What are the latest advances in electronics, including entertainment, navigation and interactive car-to-car and car-to-infrastructure systems?

John Waraniak: Vehicle electrification, electronics integration and connected-vehicle technologies are leading the way toward the development of cars that don’t crash, devices that don’t distract and powertrains that don’t pollute. Automotive technology has extended far beyond the vehicle itself. Onboard vehicle technologies combined with vehicle-to-vehicle and vehicle-to-roadside technologies are creating many new and exciting product and service opportunities for specialty-equipment and performance aftermarket manufacturers, installers, retailers and distributors. The challenges, opportunities and solutions for SEMA members lie in how effectively these features, devices and accessories can be integrated into today’s vehicles.

Technology is integral to both the relevance and the future of SEMA and the performance aftermarket. To ignore its impact is a fundamental mistake. More than half of the new vehicles offered in five years will support applications through car-radio platforms. By 2017, more than 13 million vehicles will be sold globally with connected-vehicle platforms. Aftermarket suppliers currently provide more than 35 radios supporting apps via smartphone integration and new operating systems, such as the Android that was featured on the Clemson Deep Orange vehicle displayed at the 2010 SEMA Show.

SEMA recently met with Peter Appel, administrator of the U.S. Department of Transportation’s Research and Innovative Technology Administration (RITA) to discuss vehicle-to-vehicle (V2V) technology and other advanced automotive electronics opportunities for SEMA members. SEMA is working with RITA leadership to promote the aftermarket industry’s contributions to deploying V2V and onboard technologies.

Connected vehicles have the potential to avoid crashes and make the transportation grid more efficient. Green performance and connected-vehicle technologies are quickly merging to create new business and product-development opportunities in integrating automotive and consumer electronics apps and solutions. Appel will participate again as a speaker in the Driving Connected session in the Vehicle Technology Center at the 2011 SEMA Show. He also briefed us on a new competition program launched by U.S. Transportation Secretary Ray LaHood on accelerating the development of connected vehicles and technologies.

The program announced by RITA is a nationwide competition seeking ideas for using wireless connectivity between vehicles to make transportation safer, greener and easier to use. During the Connected Vehicle Technology Challenge competition, RITA will accept ideas for products and applications that use dedicated short-range communications, which is a fast, secure wireless technology created specifically for connected vehicles and the evolving infrastructure. The challenge is a great opportunity for SEMA members to showcase their use of innovative new products and cutting-edge technologies.

SN: Several of the automakers are now selling battery electric vehicles (BEVs). How will electric cars and advanced vehicle technologies affect the performance and enthusiast marketplace?

JW: President Obama said in his State of the Union speech that technology innovation will be the nation’s “Sputnik moment,” and that the economy’s priorities will be focused on industries such as clean energy and advanced technology. His plan is to have one million advanced-technology electric vehicles on the road by 2015. This is a tough challenge because only 20,000 electric vehicles are expected to be sold this year. It took Toyota 10 years to sell one million Prius hybrids, and hybrid sales peaked at 353,000 in 2007.

		Today’s vehicles are not just a collection of 5,000 loosely integrated parts. They are an interdependent “system of systems,” connecting body, chassis, interior and powertrain systems through more than 150 controllers and 10 million lines of code and embedded software.

Forcing electric vehicles on the market will not make them sell. President Obama is also working to realign the U.S. government’s vehicle-technology priorities. The White House’s proposed budget for 2012 would end federal government programs that fund hydrogen fuel cell research and efforts to develop clean diesel engines and retrofit older diesels. The budget proposes diverting funds from a dozen energy company tax breaks to help pay for putting the one million electric vehicles on the road by 2015 and help grow the market for electric cars. The budget proposal would transform a $7,500 tax credit for buyers of plug-in electric cars into a rebate at the dealership so that purchasers would not have to wait to claim the credit on their tax returns.

Advanced vehicle technologies go beyond battery-driven electric motors. The kinetic energy recovery hybrid system featured in the Porsche 918 RSR stores and releases energy without batteries. The kinetic hybrid system uses a flywheel to capture energy during braking from front-wheel motor hubs. Regenerative braking charges the flywheel, and the driver presses a button to access the energy, generating up to 75 kilowatts and adding more than 200 hp to the 918’s 560 hp. Power electronics is the new horsepower and represents an emerging technology in the performance aftermarket and new opportunities for the next generation of hot rodders and enthusiasts.

Automotive OEMs are also working with lightweight materials and advanced technologies to reduce the mass of each new generation of vehicles, optimize system integration and refine aerodynamics. Experts estimate that every additional 100 lbs. of weight a vehicle has to carry reduces fuel efficiency by 1%–2%. The new eco-version of the Chevy Cruze has lower fasciae and an aerodynamic shutter that closes to increase fuel efficiency.

SN: How is the industry addressing increasing vehicle complexity and cross-industry product development?

JW:

Products, processes and profits are inextricably linked. Lean customization, like lean production, is a paradox. On one hand, every activity, task and flow of work is rigidly scripted. Yet at the same time, lean operations are very flexible and responsive to customer demand. Designing for customization is the intersection of design, technology and the customer experience. Designing for customization and lean-customization principles cast the biggest shadow on profitable personalization. Commoditization, standardization and commonization actually drive customization.

Lean-customization principles can make the difference between built-in profits and reverse-engineered costs. The OEMs are being driven to reduce vehicle complexity while simultaneously increasing the flexibility to build more models and variants off of fewer platforms. Aftermarket companies and dealers can also help take the complexity out of assembly plants by collaborating with OEMs to develop product plans and vehicle architectures with cost-effective, simplified bills of material that can be profitably customized with factory and aftermarket-branded parts and accessories at dealers, customization centers and independent installers.

		A virtual test method was demonstrated at the SEMA Show last year. In the demonstration, a virtual model of a modified Ford F-150 supplied by Superlift Suspension Systems was created in CarSim and was connected to the ESC controller and brake system of the actual vehicle.

Enlightened automakers, consumer-electronics manufacturers, aftermarket companies, dealers and installers recognize that they need to work together to ensure that they can personalize vehicles and add future capabilities profitably. Open innovation and collaboration are essential for growth. Ford’s signature technologies—SYNC and EcoBoost—are great examples of Ford’s collaboration and personalization strategy for driving connected and driving green. Automakers and aftermarket companies that do not know how to apply collaborative value-chain practices and technologies will be beaten by those who do.

Collaboration is not a hobby. It’s not easy to collaborate. It’s an unnatural act. Mazda, for example, will launch a hybrid using Toyota technology in 2013. Successful OEMs will rely more on the aftermarket to reach new markets and segments with increased personalization and lower costs. The old approach of proprietary architectures and closed systems hasn’t died yet, and the new approach to open innovation and collaboration is
just beginning.

SEMA’s innovative partnership with the Clemson University International Center for Automotive Research (CU-ICAR) is an excellent example of open innovation and generative thinking in action. SEMA and CU-ICAR have teamed up to offer SEMA members access to world-class resources, including a 580hp engine dynamometer test cell, a dual-column full-vehicle coordinate measuring machine, a seven-post road simulator in an environmental chamber, an electromagnetic compatibility chamber and a 500hp four-wheel chassis dynamometer in an anechoic chamber.

SN: What is the state of modern musclecar technology—high-performance vehicles, such as the new Camaro, Mustang and Charger—and how will it affect SEMA-member companies?

JW: While many SEMA companies feared that advanced technologies signaled the demise of the specialty-equipment market and believed tighter federal emissions and fuel-efficiency standards would eliminate performance vehicles from America’s roadways, something quite different is happening. Green muscle is alive and well and took center stage at many of this year’s auto shows. Leading automakers are focusing on matching horsepower with the fastest computing power.

Horsepower still moves product. Nearly every major automaker now offers a performance car for street use that is as powerful as many of the race cars on the track. The Cadillac CTS-VR is equipped with a supercharged V8 that pumps out 556 hp. The new supercharged V8 Camaro ZL1 offers 550 hp and 550 lb.-ft. of torque. Chevy will introduce a new limited-edition Camaro every six months. The ’11 Mustang with an aluminum V6 makes 305 hp and gets 31 miles per gallon. The ’12 Dodge Charger SRT8 delivers an exceptionally mean version of its flagship sedan to the tune of 465 hp from an even larger Hemi V8. The engine grows from 6.1L to 6.4L with 465 lb.-ft. of torque.

Advanced engine and transmission technologies, such as cam phasing, variable valve timing, port deactivation, direct injection, turbo boosting, dry dual clutches and wide-ratio six-speed-plus gearing, combined with reduced mass, decreased parasitic losses and integrated engine and transmission control software have improved the internal-combustion engine in these vehicles to efficiencies that would have been unbelievable just five years ago.

SN: General Motors released information recently about an OnStar mirror that will be retailed for non-GM vehicles. How will those types of innovations impact SEMA companies?

JW: Telematics and connected-vehicle technologies may not seem that pervasive in the automotive aftermarket yet, but that is changing quickly, as evidenced by the new vehicles on display at this year’s auto shows. Ford’s voice-activated SYNC platform continues to evolve with new features and capabilities and has been installed in more than 3 million vehicles. More than 80% of Ford buyers take the SYNC option, and Hyundai is launching its own system called Blue Link.

The recently introduced aftermarket version of OnStar is embedded in a replacement rearview mirror and sells for $299 plus a $100 installation. Expect more automakers, aftermarket suppliers, app developers and installers to form collaborative partnerships to leverage infotainment innovations and capitalize on this growing market. Ford CEO Alan Mulally summed up vehicle connectivity very well when he said: “It’s cool to connect. But it’s past cool. It’s a reason to buy!” I would add that if you think it’s too connected, you are too old. GenGreeners, the next generation of car buyers and enthusiasts, are under 16 years old today and will be the first generation to grow up with the choice of an electric, a hybrid or an internal-combustion engine as one of their buying options.

		Ralph Gilles, senior vice president of product design and president and CEO of the Dodge Car Brand, Chrysler Group LLC, shown here with the newly introduced Dodge Charger SRT8, summed up the future of performance and customization very well. “Everyone is a car person,” he said. “Some just don’t know it.”

JW: Millions of people have powerful smart phones that are loaded with a variety of capabilities, such as Pandora’s Internet radio app, that consumers can use in their vehicles. BMW’s MINI and aftermarket companies are taking advantage of Apple’s iPhone capabilities and offering an automotive-grade iPod interface that supports Apple’s iPod Out through the MINI connected system. The iPod screen appears in the vehicle’s display screen. Drivers are familiar with the screen, so it is less distracting than adding
another interface.

Distracted driving is certainly a concern for both OEMs and aftermarket companies that are providing connected-vehicle products, apps and solutions. An estimated 20% of injury crashes were reported to have involved driver distraction. Glances away from the road for more than two seconds for any purpose double the risk of a crash or near crash. Many drivers—particularly GenY’ers, which is the largest generation ever—understand the risk and will find ways to stay connected and be on the grid while driving. Forcing them to go off the grid and not be connected with their friends and networks while driving is not a feasible solution.

The app is just as important as the content. I asked a panel of six experts at a recent Society of Automotive Engineers (SAE) discussion on automotive and consumer electronics what feature, function, system or app would be most significant in the next five years and if it would come from inside or outside the auto industry. Five of the six said it would come from outside the auto industry.

JW: ESC monitors vehicle motion. When loss of control is imminent, ESC strategically applies the brakes to help stabilize the vehicle. Similar requirements for the rest of the global community are contained in the United Nations Economic Commission for Europe 13H regulations.

Compliance with FMVSS is normally the responsibility of vehicle manufacturers; however, SEMA has taken a proactive approach and developed a methodology and program to evaluate the ESC performance of aftermarket-modified vehicles. To actually test every vehicle configuration is cost prohibitive for OEMs and the aftermarket, so SEMA sought outside help from leading industry experts and companies in the area of vehicle dynamics simulation and testing to develop a “best practices” solution to offer member companies. It’s important to note that any modification to the engine, steering, brakes, suspension, wheels or tires may have an impact on
ESC performance.

A virtual test method was demonstrated at the SEMA Show last year, drawing on the controls-development experience of Advanced Controls Engineering Consultants LLC, the CarSim vehicle dynamics simulation produced by Mechanical Simulation Corporation and the hardware-in-the-loop (HIL) technologies of dSPACE GmbH. A modified Ford F-150 supplied by Superlift Suspension Systems was used as the test vehicle. In the demonstration, a virtual model of the vehicle was created in CarSim and was connected to the ESC controller and brake system of the actual vehicle.

The CarSim software provides not only a dynamic model of the pickup, but also a virtual proving ground on which to conduct the tests. It also includes steering and throttle inputs that are required to execute the sine with dwell (SWD) test maneuver. CarSim connects to the ESC controller on the vehicle through the dSPACE hardware.

		Neil Young demonstrated the entrepreneurial spirit of SEMA members and performance enthusiasts everywhere with his keynote remarks and the introduction of his ’59 Lincvolt at the Green Performance session during last year’s SEMA Show. Courtesy Steve Cross, Courtesy of Shakey Pictures

An ESC-HIL demonstration with expanded vehicle simulation capabilities will be set-up in the SEMA Vehicle Technology Center (VTC) at this year’s SEMA Show, where attendees can see the latest advanced vehicle technologies impacting the specialty-equipment and performance aftermarket industry today and in the immediate future.

SN:The aftermarket is being bombarded with green technologies and advanced electronics. Other industries are dedicated to technologies that are peripheral to automobiles but don’t address the vehicles themselves. SEMA members do. How is SEMA increasing its relevance as technological innovation expands?

JW: One very exciting element of our vehicle technology strategy is to create the SEMA Vehicle Technology Center at the SEMA Show. The VTC will showcase SEMA’s vehicle technology programs and partners and the benefits to members. The VTC and its Tech Zones are being designed to reinforce our efforts to appeal to emerging-technology enthusiasts and bring greater focus, urgency and performance aftermarket relevance to our advanced-technology offerings. We also want to put vehicle technology on the front lines, similar to what GM and Ford have done recently with the creation of new chief technology officer positions.

The purpose of the VTC is to inform and educate SEMA members. We also want to increase member participation in and understanding of the programs, partnerships, services and systems as well as product and vehicle development tools, methodologies and resources that are available at affordable costs to SEMA-member companies.

The seminars will focus on the future of performance and customization, branding performance, marketing to enthusiasts, designing for customization, vehicle dynamics of aftermarket-modified vehicles, green performance and connected-vehicle technologies. The physical platform and exhibit space in the VTC will showcase SEMA-developed solutions with technology simulations, demonstrations and workshops to introduce members to the benefits of SEMA vehicle technology programs and partners.

SEMA is continually working to develop vehicle technology solutions and build relationships that foster collaboration between the automakers, the original-equipment suppliers, dealers, research organizations, industry associations and member companies. SEMA’s Vehicle Technology Center will provide members with in-depth information and hands-on understanding from leading industry experts about advanced vehicle technologies and emerging systems to help them understand the impact on their business today, as well as prepare for and leverage tomorrow’s technologies and business opportunities.

SN: What should SEMA members understand in a general sense about the role of technology in the future of the automobile?

JW: Advanced vehicle technologies are driving the future of performance and customization. Both the automobile and the industry are being reinvented. Systems are moving from mechanical to electrical. Vehicles are moving from standalone to connected, and markets are moving from mass production to niche segments and personalization.

Innovation is the engine of growth. Growth in the new auto normal doesn’t lie in disrupting large, over-served markets but in disrupting small under-served markets and emerging segments focused on product differentiation, performance and customization.

Eco-friendly vehicles will remain a niche segment for the next decade despite all the hype and headlines. Performance vehicles will also continue as a niche segment. Both will coexist as advanced vehicle technologies are developed and deployed. Hybrids and electric vehicles will make up less than 10% of the vehicle market by 2020, and while many consumers consider themselves performance enthusiasts, that market segment will be about 10% as well.

My good friend, Ralph Gilles, senior vice president of product design and president and CEO of the Dodge Car Brand, Chrysler Group LLC, and a longtime SEMA advocate, recently launched his “Never Neutral” campaign and summed up the future of performance and customization very well. “Everyone is a car person,” he said. “Some just don’t know it.”