A New Research Report Drills Into Industry Economic and Market Trends

Recently made available for download to all SEMA members, the first of these reports tracks industry and economic growth from the first quarter through the second quarter of 2011. In addition, it zeros in on current topics that help provide more accurate snapshots of current and projected consumer habits. The comprehensive research is drawn from a variety of government and leading expert sources.

Obviously, such information can be crucial to aftermarket businesses as they chart their courses as far into the future as the next five years. While SEMA has long provided data along these lines, this report takes an entirely new approach in its packaging.

“Over the last couple of years, we’ve gotten feedback from members indicating that they didn’t have time to take deep dives into everything we were providing to get the most value out of it,” said Tom Myroniak, SEMA vice president of marketing and member services. “SEMA members were looking for something that was more of a top-line summary of everything that we’re doing so that they could find it all in one place. We set out to deliver additional value by repackaging some of the content we already had and presenting it in a new format that’s easier to digest
and understand.”

According to Myroniak, the department plans several similar reports at regular intervals throughout the coming year. How members receive and use them will ultimately determine whether the reports become quarterly or semi-annual publications.

Numbers Crunch

	The second quarter update also pays significant attention to the accessories consumers most request from dealerships, breaking them out by OEM and aftermarket categories.

Readers will find useful information about industry growth against the backdrop of recent gross domestic product, retail sales, consumer credit and employment trends, among other factors. The report then turns to industry-specific topics, beginning with five-year sales forecasts for light vehicles, trucks, SUVs and vans. Next is a look at accessory sales, which have received increasing dealer emphasis. Again, consumer buying habits are extensively crunched and analyzed to provide readers with accessory data by automaker brand as well as the top generic accessories requested by consumers at dealerships.

A strong component of the SEMA Market Update is its in-depth review of 2010 vehicle brand retention and nameplate dynamics. Readers will find a wealth of detailed brand-by-brand analysis pertaining to what consumers are currently driving, what they previously owned, how likely they are to stick with a brand and vehicle type and, if not, what their next vehicle is likely to be.

Also covered are consumer responses to questions such as: “Which sources influenced your purchase decision?” and “What vehicle attributes were you looking for?” The report drills down to brand demographics, including age versus income, generational mix and other psychographic attributes (demographics relating to consumer personality). The update also breaks out OEM versus aftermarket accessory trends.

“As dealers push accessories, the more they drive those accessories, the more they have to get them from the aftermarket, because OEMs don’t cover all the possible accessories that customers are looking for,” explained Gavin Knapp, SEMA senior market research manager. “SEMA-member companies can get an idea of the type of person who is purchasing in each of these different segments and the attributes that they see in each segment as well as what segments people are coming from to get here and where they expect to go after their current vehicle. If I’m hitting people in one segment, where are they likely to move to? And should I be following them into these other segments as well?”

Knapp noted that SEMA’s research partners, AutoPacific and the Insignia Group, served as major contributors to these portions of the update.

Overall Industry Indicators

	RETAIL SALES
	The SEMA Market Update tracks economic and industry trends affecting the $28 billion specialty-equipment industry. The current downloadable edition contains data through the second quarter of 2011.

The report also confirms significant consumer market shifts in car preferences toward small cars and crossovers during the past five years and predicts that those shifts will continue for several years to come. The document bases its conclusions on indicators such as gas prices, new-vehicle sales figures,
consumer demand indexing and financial benchmarking.

Among the report’s most interesting highlights is the correlation between automotive parts sales and the nation’s overall retail and food sales. Although parts sales lagged somewhat in 2008 and 2009 and have faltered somewhat more in 2011, the industry’s sales curves uncannily mimic those of the retail and food category. For example, just as U.S. retail sales plummeted from around $375 billion to well under $350 billion from January 2008 to January 2009, automotive parts sales fell from roughly $6.5 billion to about $6 billion during the same period, although somewhat less abruptly.

Similarly, as of January 2011, retail sales had rebounded to nearly $400 billion, again with auto parts following a slower and more sputtering climb. Based on the last few years, then, overall retail sales have proven a reliable indicator of specialty-equipment sales health.

While this may seem intuitive to many, demonstrating the correlation statistically is important: Specialty-equipment businesses can now look with some level of confidence to retail and food sales as predictors of how industry sales may grow or decline.

GAS PRICES			NEW VEHICLE SALES
As might be expected, rising U.S. prices at the pump directly correlate with the shift in consumer car preferences.			Based on reporting by Ward’s Auto Group, the new-vehicle sales mix has changed remarkably over the past five years as buyers seek fuel efficiency.

RETAIL SALES			INDUSTRIAL PRODUCTION
One of the most noteworthy industry indicators has been the close correlation of auto parts sales with retail and food sales from 2000 through 2011. pected, rising U.S. prices at the pump directly correlate with the shift in consumer car preferences.			Manufacturing in the specialty-equipment segment has also closely mirrored overall industrial production in the United States.

Accessing Your Report

The best part of the Q2 SEMA Market Update is that it’s available free to SEMA members. To download a copy, go to www.SEMA.org, select the “Research” tab and choose the “2011 SEMA Market Update–Q2.” The price for non-members is $199.99.

Moon’s iconic eyeballs—along with the Moon-trademark searing yellow paint—figured prominently on all of the race cars he built, including the famous Mooneyes Dragster. Moon built the rail in 1961 to serve as a rolling test bed for the Moon Equipment Company’s various speed products. Hot Rod magazine’s Eric Rickman went to Moon’s shop in Santa Fe Springs, California, in May of 1961 to photograph the car for what would be the magazine’s September 1961 cover story. Posing with the car in this outtake and on the magazine’s cover is Moon’s “top mechanic,” Roy Gammill.

In its original configuration, the car was built on a Dragmaster chassis and was powered by a 300-in. small-block Chevy fed by Hilborn fuel injection and a Potvin supercharger mounted in front of the engine. (Moon had acquired Chuck Potvin’s speed parts business the year before.) According to Rickman’s story, “The first time out the car cranked 147 mph in 10.29 seconds.” It would go even quicker and faster a year later with Gary Cagle at the wheel and a top-mounted blower on the engine.

Moon was among the original founders of SEMA and was inducted into the SEMA Hall of Fame in 1988, a year after his passing. Mooneyes and many of Moon’s speed parts live on, thanks to the trans-Pacific efforts of Shige Suganuma, who oversees Mooneyes enterprises in Southern California and Japan.

Three Days Brimming With Passion, Education and Service

For the SEMA membership at large, this year’s Leadership Days launched with the highly attended Business Technology Symposium on July 27. The popular charity SEMA Pinewood Drag Races—Presented by eBay Motors, then made its annual return on July 29, demonstrating the industry’s desire to take a lead in giving back to communities. Finally, the celebration of leadership and volunteerism closed with the yearly SEMA Installation Banquet & Gala Fundraiser reception and dinner later that evening—always an industry highpoint. Various council, executive and Board meetings were also held concurrently throughout the three-day program.

The following is a SEMA News recap of Leadership Days’ high points.

SEMA Installation Banquet & Gala Fundraiser Honors Industry Leaders

Hundreds of leaders and professionals from the automotive specialty-equipment industry gathered to honor noteworthy icons and volunteers during the 2011 SEMA Installation Banquet & Gala Fundraiser at the Renaissance Hotel in Long Beach, California. Traditionally, the culmination of SEMA Leadership Days, the annual event once again served as the industry’s premier celebration, with SEMA’s newly elected Board of Directors sworn in and four industry icons officially inducted into the trade association’s prestigious Hall of Fame.

“The Installation Banquet & Gala Fund-raiser has always been a special time to pay tribute to the individuals who are working to support and grow the industry and the association,” said Chris Kersting, SEMA president and CEO. “I always look forward to the event. It really is a homecoming where industry friends and colleagues gather, swap stories and show their appreciation to the SEMA Board of Directors and Hall of Fame members.”

	SEMA Board Chairman Scooter Brothers (left) and President and CEO Chris Kersting (right) also thanked outgoing Board members, such as Source Interlink Media’s Doug Evans, for their service during the annual industry night gala.
	The Gala Banquet also honored automotive legends Gray Baskerville, Art Chrisman, Chris Economaki and John Towle with induction into SEMA’s prestigious Hall of Fame.

Emcee Dave McClelland hosted the ceremonies that also welcomed the newly elected SEMA Board of Directors, which included Tim Martin of K&N Engineering, Steve Wolcott of ProMedia LLC, Jim Chick of Bestop Inc., J.R. Moore of Performance Warehouse and Greg Adler of Transamerican Auto Parts.

In addition, Nate Shelton of B&M Automotive Group became the new SEMA Chairman-Elect and outgoing Board members Laurel Dasher of Superchips, Zan Martin of Martin & Co. Advertising, Tony Napoli of American Speed Centers, Doug Evans of Source Interlink Media and Ernie Silvers of Egge Machine Co. Inc. were honored and thanked for their substantial contributions to
the industry.

Also, as in prior years, SEMA Hall of Fame inductions formed a major part of the 2011 dinner festivities, with Gray Baskerville, Art Chrisman, Chris Economaki and John Towle welcomed into the roll call of industry elite.

2011 SEMA Business Technology Symposium Delivers Insight

As part of Leadership Days, SEMA helped automotive businesses understand the latest technology trends and opportunities at the annual Business Technology Symposium, July 27, at Long Beach, California’s, Renaissance Hotel. Throughout the daylong gathering, Business Technology Symposium participants learned proven strategies and best practices from experts in the fields of online marketing, multimedia sales and eCommerce to become more productive online.

Developed by SEMA’s Street Performance Council (SPC), the event has become a prime business development forum offering several unique opportunities to gain competitive advantages through the implementation of effective technology-based strategies.

“Given today’s competitive marketplace, companies are relying more and more on emerging technologies for brand building, lead generation and, in some cases, as a primary source of commerce,” said Tyler Tanaka, vice president of business development at PostRelease, which, along with the SPC, was a key symposium organizer. “Technology is continuing to revolutionize the way business is conducted in the automotive aftermarket, and our members’ businesses are ever changing as a result. We wanted to give them the necessary tools to be prepared, understand and take advantage of the potential opportunities that exist while doing business in today’s digital world.”

Many Business Technology Symposium attendees agreed with the need for the sort of ongoing technological education the symposium offers each year.

“I first attended the Business Technical Symposium two years ago when social media was a new territory that the industry began exploring as a marketing tool,” said Cheralyn Smith of Advanced Clutch Technology Inc. (ACT). “I was able to bring some valuable practices to the office that we still use every day at ACT. This year, I had the opportunity to be on the Manufacturer and Distributor Online Marketing Essentials panel. That really gave me a chance to share our experiences, hear what is working for other companies and get an inside perspective on how social media continues to grow and transform marketing in the industry.”

“During challenging economic times, the automotive aftermarket requires an extra gear to compete, sustain and grow, and the Business Technology Symposium very much complied with the business savvy necessary to rise in the aftermarket business environment,” added Dick Dixon, director of the International Motorsports Alliance at California State University San Bernardino, who also attended the event.