SEMA News—December 2020

SDC Product News

By Gigi Ho

The products featured below are from SEMA Data Co-op (SDC) member companies that have attained Gold- or Platinum-level data, which means that their product data is robust and complete—likely to drive customer purchase decisions. SDC members meeting data scorecard requirements are invited to submit product releases for consideration to enews@semadatacoop.org.

The SDC is “data central” for the specialty-equipment segment, containing millions of products and vehicle fitments from performance and accessories brands. Created by SEMA, the SDC is the definitive, industry-owned and -operated centralized data warehouse, complete with comprehensive online tools, and a team of dedicated data and technology experts to assist manufacturers and resellers with product data needs. Learn more about the SDC at www.semadatacoop.org.

JMS Chip

JMS PedalMax

PedalMax was designed to improve the throttle response and driving characteristics of modern vehicles equipped with electronic throttle-control systems. Throttle response and acceleration are improved and turbo applications see a big lag reduction, all leading to more power and torque. Taking only minutes to install, the unit plugs inline between the vehicle’s pedal-position sensor and the vehicle harness, utilizing OEM connectors with a control knob to make performance adjustable on the fly. PedalMax units are fully waterproof, backed by a lifetime guarantee, and made in the U.S.A. Information: www.jmschip.com.

Rigid Industries

Adapt LED Light Bar

The Adapt LED Light Bar has eight selectable beam patterns and accent lighting that can be programmed to display any color. The Adapt features an integrated optics design with spot, flood and driving zones. Horizontal beam patterns range from 90-degree slow- or moderate-speed broad beam to a highly focused 15-degree high-speed spot beam in a single fixture. It also includes Rigid’s new Active View Technology, which allows the beam pattern to automatically adjust based on the vehicle’s speed when set to adaptive mode. There is traditional side-mounting or underside low-profile stealth. Available in 10-, 20-, 30-, 40- and 50-in. lengths. The kit includes one light, a GPS module, a dash controller, an underdash module, a complete wiring harness and switch, mounting hardware and an installation guide. Information: www.rigidindustries.com.

Truck Covers USA

American Roll Cover

The American Roll Cover for the new Jeep Gladiator was launched by Truck Covers USA at the 2019 SEMA Show. In keeping with the revolutionary style of the Truck Covers USA brand, this hard, retractable tonneau cover boasts a 25% smaller canister and lid, optimizing the Jeep’s truck-bed space and allowing for maximum cargo capacity. Specially designed brackets create a perfect fit specific to the Jeep Gladiator. Truck Covers USA offers the roll cover in both a matte and the original textured-finish powdercoating. The versatile unit allows for the seamless addition of the American Rack System and Yakima Component Kit to increase the ability to carry greater loads while still looking good. Information: www.truckcoversusa.com.

SEMA News—December 2020

Supplier Spotlight

Edelbrock Group and Quadratec

Two Case Studies in COVID-19-Era Best Practices That Can Boost Stability and Sales

By Mike Imlay

Unprecedented times have called for unprecedented measures to keep production lines and warehouse facilities going, yet companies that are getting it right have found not only stability but major sales surges as enthusiasts demand parts for their stay-at-home automotive projects.

Founded in 1938 and headquartered in Torrance, California, Edelbrock is a well-known industry name. Recently the legacy brand entered into a merger with the Comp Performance Group, although the two companies continue to operate as separate entities. Chris Douglas, Edelbrock Group chief commercial officer, described the company’s current product mix as evenly split between motorsports, the street and hot-rod scene, and the industrial segment. The company also sells through all channels, from mass merchandisers to direct-to-consumer e-commerce. Like other businesses, the manufacturer saw signs of uncertainty this past March, followed by hopeful indicators as the industry and consumers adapted to the obstacles imposed by the COVID-19 pandemic.

“March was good for the first half, but then there was a distinct softening in the back end of the month as the gravity of the situation and shutdowns settled upon the country,” Douglas explained. However, he added, “From a market perspective, sales and overall interest has been extremely robust since early April. Beyond the COVID-19 effect, the normal market drivers—namely weather patterns—have been extremely favorable this year, which is a nice change from recent years.”

Thanks to those factors, along with key actions the company took during the pandemic’s earliest weeks, Douglas said that the entire Comp/Edelbrock Group is now experiencing across-the-board growth in all its brands and categories. He cited superchargers, EFI, carburetors, transmissions and valvetrains as notable “high flyers,” adding that the “sales trends were present pre-COVID-19, but the last 120 days have greatly amplified them.”

Across the country, in West Chester, Pennsylvania, Quadratec is celebrating its 30th year of selling a wide range of Jeep products through print catalogs and a robust e-commerce platform. As advertised on its website, the company currently offers more than 100,000 parts and accessories representing more than 100 leading aftermarket brands, along with its own branded line of products. Going into 2021, the company will also add wholesale operations to its mix. Quadratec Chief Marketing Officer Ralph S. Mondeaux said that the company quickly found its footing and has seen a healthy increase in revenues over the last several months despite the business disruptions of March.

“I think it was the first or second week of March when we sent all our employees home, and so we shifted pretty quickly in terms of getting all our employees computers, going into a world of Zoom meetings and everything else,” he said. “In hindsight, it was a much smoother transition than I could ever have envisioned, and from an employee perspective, they were extremely gracious. Nobody complained. We knew we had to do it to keep the employee base safe, so everybody was really good about it.”

Not surprisingly, do-it-yourself Jeeping applications are currently the biggest hits with Quadratec customers.

“Really, the replacement parts and accessories are the two big categories that took off during this time,” Mondeaux reported. “If you think about it, it’s all project-based. Rather than maybe putting on a whole new front bumper, they’d much rather put some fender flares on, or they might try an engine tune-up and so forth.”

Fully embracing a wide range of digital channels for marketing and e-commerce is another winning strategy. Knowing its customers had many children now schooling at home, Quadratec launched a highly successful #HandsOnHomeSchool social-media campaign to teach kids basic Jeep and automotive skills.

Keeping Employees Safe and Informed

Both Mondeaux and Douglas stressed that the early steps their respective companies took to promote employee safety were essential to stability and success.

“We met COVID-19 head-on with practical, data-based decisions that prioritized keeping our employees safe and gainfully employed while continuing to serve our customers at the best level possible given the first two priorities,” Douglas said. “When you are in a situation that has so many unknown variables, we find that it’s best to not be reactionary or too emotional. We increased the frequency of our internal communication, and we were extremely transparent in our decision-making process each step of the way.

“Internally, we have operated mostly normally with the exception of the additional precautions and intent focus on keeping our workforce healthy and safe. We have utilized a work-from-home model in select areas of the company, but our employees generally prefer to be in the office and functioning as a team.”

To keep the team healthy, Edelbrock altered shift hours to lessen work-area density, initiated aggressive safety and cleaning protocols, and adopted daily screenings and temperature checks to identify potential COVID-19 exposures as quickly as possible. The company also developed a well-defined process for handling positive COVID-19 cases.

According to Douglas, the pandemic “has really highlighted the importance of organizational processes, being nimble, and flexibility in leadership style.”

Flexibility was a key word for Quadratec as well, given the unpredictable course of the virus and government responses. In March, the company initially believed that its remote work arrangements for corporate employees would be temporary but later had to extend them as the COVID-19 continued its spread through Pennsylvania.

“To me, one of the biggest motivators is how well all the employees adapted in literally a week, going from a corporate campus that’s tons of employees working on-site together to nobody,” Mondeaux noted. “But everybody was very receptive to working at home and making this work, so lesson learned there. Of course, we also have a warehouse here in West Chester, and so that stayed open and operational during this time.

“Everybody was equipped with the proper masks. We did temperature checks the moment they came in the door. We had foot washes at the door and hand sanitizer pretty much in every cube, so we took a lot of measures to make sure our warehouse employees were extremely safe.”

Just as importantly, Quadratec also instituted an employee communications strategy to keep staff and workers updated on company responses to the pandemic as well as COVID-19 policy decisions being made at local, state and federal levels.

“It was really an information campaign making sure our employees were well informed on the risks that were out there and how to best take care of themselves,” Mondeaux explained.

Structure, Leadership and Agility

At Edelbrock, Douglas said that adherence to business fundamentals and an experienced and dexterous staff provided a solid foundation for dealing with the pandemic.

“On the heels of closing the Edelbrock and Comp Performance Group transaction in late January, it has been great to have a much deeper ‘bench’ when it comes to market data, management talent and experience, and resources outside of the automotive aftermarket,” he emphasized. “Beyond that, I would point to having a culture of being nimble yet methodical as extremely beneficial when it comes to dealing with dynamic situations. It’s easy to be a leader during the good times, but strong leadership really shows during times of adversity—and we are fortunate to have great leaders throughout the organization who are passionate about this industry.”

A grounded but agile corporate culture also contributed to Quadratec’s quick adjustment to rapidly changing events.

“From the moment it started to go down, I think we moved quicker than maybe other companies in the area [to get] people equipment and get them home as quickly as possible,” Mondeaux said. “Again, it is in the best interests of our employees. We’re a 30-year-old family-run business, and so our employees are our family. We want to make sure they’re taken care of.”

Demonstrating care for employees was the first order of business for Edelbrock. Daily COVID-19 screenings and other well-recognized health protocols attended to employee safety, while intensified communications addressed their need for transparency and information.

The Right Messaging

With employee safety and communications covered, both companies assessed and adjusted their external communications, especially to business partners and consumers. Realizing that public sentiment favored companies acting responsibly toward their employees and community, both companies made their responsiveness to the pandemic part of their messaging.

“As a company in the automotive industry, we let our customers know we were still open for business, [as well as] the measures we were taking to make sure that the people in the warehouse and the people in the call center were all taking the proper precautions to stay safe and so forth,” Mondeaux said.

Meanwhile, in the absence of the 2020 SEMA Show and other 2021 industry events, Douglas said that Edelbrock Group plans to up its messaging across a variety of channels in the months ahead. Again, while the messaging itself will change, its crafting will be consistent with a methodical mindset.

“Our plan is to be more aggressive with overall marketing and market communications,” he said. “I think you can look at the loss of the SEMA Show for this year as an obstacle or an opportunity, and we are choosing to look for the opportunity. We will aggressively lean into the fundamentals of a good marketing strategy: brand marketing, digital and transactional advertising, PR and content creation. Just like with your employees, we believe periods of uncertainty require increased communication with your customers.”

Embracing Digital Channels

For the industry as a whole, Douglas believes that the COVID-19 situation has underscored the importance of well-developed digital channels for suppliers and sellers alike.

“E-commerce has been an incredibly positive story for most in our industry in 2020, including Edelbrock and Comp Performance,” he noted. “There has been a distinct surge since early April that has benefited not only our direct-to-consumer websites but also our sales channel partners that are well positioned with great e-commerce infrastructure. Several of the large chain stores have also experienced robust point-of-sale [numbers] coming from both e-commerce and brick-and-mortar stores.”

But selling through e-channels is only part of the equation. Truly leveraging digital channels also ties back to great marketing campaigns, and Quadratec provides an excellent example.

Keeping its fingers on the pulse of its consumer audience, the company rolled out a series of DIY how-to videos and written articles covering simple Jeep maintenance and modification projects. Then, realizing that so many of its customers were dealing with kids out of school, the DIY videos evolved organically into a highly successful #HandsOnHomeSchool social-media campaign. In fact, the campaign was inspired by a Quadratec employee who was involving his kids in basic Jeep projects to help them alleviate out-of-school boredom.

“It sparked the idea that now we’ve got this DIY campaign going on [and] everybody’s home and probably going a little stir-crazy, so the #HandsOnHomeSchool campaign was really twofold,” Mondeaux said. “One was to get moms, dads and their kids working on projects together in the garage, and then secondly, the goal was to teach kids and young adults the basics of car maintenance.”

The campaign played out on Facebook and Instagram, with some email and Quadratec website support. The concept was simple: Involve your kids in a basic Jeep project, snap a photo, and post it using the #HandsOnHomeSchool hashtag. Quadratec reposted photos and created small gift cards, T-shirts and other promotional items to send to families who “attended” the home-school program.

Mondeaux said the campaign was an instant hit: “It was just phenomenal. The parents got behind it, of course. A lot of the kids saw it, and they wanted to be a part of it. We’ve had several local schools that were no longer in business here get behind it, and the teachers were behind it. It was just a really good program to encourage families.”

Following the success of its DIY videos and home-school social-media campaigns, Quadratec has now launched a Torque channel at its website, filled with Jeep-enthusiast-oriented videos and written content. The company’s leadership believes that Jeep aftermarket consumers remain hungry for streaming content tailored specifically to their passion between their Netflix and Hulu binges.

Forward Thinking

As the industry rounds the corner into 2021, both Edelbrock and Quadratec remain well positioned for upward growth, but there’s no secret or magical formula to instant success for Douglas.

“Personally, I don’t think there are any game-changing tactics that exist to guide you through this type of period,” he said. “Rather, I think it has forced businesses to rely on good business management fundamentals that should have been in motion prior to this period. We have continued to lean into modern business technology transformation—work from home, cloud infrastructure and such; extensive scenario planning; and a relentless drive for
additional efficiency.”

As a matter of financial course, he believes that companies should always be tightly managing their cost structures (including product and selling as well as general and administrative expenses) and planning for downward cycles.

“Admittedly, COVID-19 forced us to stress-test many of the [above-mentioned] projects in real time, but overall we are pleased with where we are at today,” he said. “As scary as the early days of COVID-19 were, as a business leader, you have to thrive on the challenge of dealing with adversity.”

For Quadratec, Mondeaux said inventory and keeping up with demand amid stretched supply chains is now the most pressing challenge, but he believes that if the COVID-19 pandemic has proven anything, it’s the essential nature of digital technologies and e-commerce platforms in today’s marketplace.

“It’s hard to plan for the unknown, but parts retail is an industry that is able to withstand the storm,” he said. “We were something that people could gravitate to when they were locked down, so from an e-commerce perspective, the biggest [lesson] is to completely embrace digital marketing and e-retailing. Consumers—even the ones who were used to going into a local shop—were forced to go online. I think a lot of them are going to stay online. If I worked for a small automotive parts company, I’d encourage them to get product online and put their marketing dollars more on the digital side.”

In the end, both Mondeaux and Douglas expressed their admiration for the aftermarket’s handling of an ongoing health and economic emergency.

“The overall resiliency and adaptability of our marketplace was a pleasant surprise,” Douglas said. “Almost overnight, we and the rest of the industry went from planning double-digit decrease scenarios to riding a surge of sales unlike this industry has ever experienced.”

But that, he added, harkens back to the industry’s roots.

“Our industry was founded upon figuring out the opportunity when most didn’t see the potential,” he said. “Listen to your customers, lean on proven business fundamentals, and always challenge and stress-test every aspect of your business.”

Compared with other industries, the automotive aftermarket has proven especially resilient during the COVID-19 outbreak, with many companies not only maintaining sales but also thriving. Part of that, of course, is the essential nature of automotive businesses, not to mention consumer thirst for projects to tackle during prolonged lockdowns. But those factors alone don’t guarantee growth in these unprecedented times. How companies respond to a crisis matters most, and there is much to learn from companies that are getting it right. As they see their sales climb, Edelbrock Group and Quadratec offer two case studies in current best practices.

SEMA News—December 2020

PEOPLE

By Douglas McColloch

Meet The 2020–2021 SEMA Board Of Directors

The Specialty Equipment Market Association is governed by a Board of Directors who volunteer their time to provide leadership and guidance to the organization. Board members are nominated and elected by the association’s membership at large. Directors serve a three-year term, while the chairman serves for two years immediately after completing a two-year term as chairman-elect. The current Board was inaugurated at the SEMA Board Meeting held August 25, 2020.

This year’s Board underwent two personnel changes mid-year. In May, Dr. Jamie Meyer, GM Performance Parts Program Manager, stepped down from the SEMA Board after being named President of Performance Racing Industry; his seat on the Board was taken by Kim Pendergast, CEO of Magnuson Superchargers. The following month, Greg Adler, CEO of Greg Adler Motorsports, completed his two terms and was replaced on the Board by Ted Wentz III, CEO of Quadratec.

“The SEMA Board of Directors represents the entire spectrum of our specialty-equipment industry,” said SEMA President and CEO Chris Kersting. “They reflect our SEMA-member businesses at large as they set association priorities, oversee our many initiatives and programs, address vital regulatory, technological and marketplace issues affecting our businesses, and promote the overall health and success of our industry. Especially during the COVID-19 era, they have lived up to the obligation to make smart, often difficult, decisions. On behalf of SEMA, I wish to thank them for their volunteerism and dedication to our association.”

Tim Martin SEMA Chairman CEO Aftermarket Advisors LLC	James Lawrence SEMA Chairman-Elect CEO Power Automedia	Wade Kawasaki SEMA Immediate Past Chairman & Secretary President and CEO Legendary Companies
Kyle Fickler SEMA Treasurer Dir. of Sales and New Business Development Driven Racing Oil	Chris Douglas Chief Commercial Officer Edelbrock Group	Kim Pendergast CEO Magnuson Superchargers
Ted Wentz III CEO Quadratec Inc.	Donnie Eatherly President P&E Distributors Inc.	Kathryn Reinhardt Senior Marketing Manager 4WP/Pro Comp
Dan Kahn President and CEO Kahn Media Inc.	Steve Whipple Vice President of Sales Edelbrock LLC	Brian Lounsberry Senior Advisor One 6 Motorsports
Melanie White President Hellwig Products	Bunyan L. (Les) Rudd, CPMR President/CSO Bob Cook Sales

SEMA News—December 2020

PEOPLE

By Douglas McColloch

Meet The 2020–2021 SEMA Board Of Directors

The Specialty Equipment Market Association is governed by a Board of Directors who volunteer their time to provide leadership and guidance to the organization. Board members are nominated and elected by the association’s membership at large. Directors serve a three-year term, while the chairman serves for two years immediately after completing a two-year term as chairman-elect. The current Board was inaugurated at the SEMA Board Meeting held August 25, 2020.

This year’s Board underwent two personnel changes mid-year. In May, Dr. Jamie Meyer, GM Performance Parts Program Manager, stepped down from the SEMA Board after being named President of Performance Racing Industry; his seat on the Board was taken by Kim Pendergast, CEO of Magnuson Superchargers. The following month, Greg Adler, CEO of Greg Adler Motorsports, completed his two terms and was replaced on the Board by Ted Wentz III, CEO of Quadratec.

“The SEMA Board of Directors represents the entire spectrum of our specialty-equipment industry,” said SEMA President and CEO Chris Kersting. “They reflect our SEMA-member businesses at large as they set association priorities, oversee our many initiatives and programs, address vital regulatory, technological and marketplace issues affecting our businesses, and promote the overall health and success of our industry. Especially during the COVID-19 era, they have lived up to the obligation to make smart, often difficult, decisions. On behalf of SEMA, I wish to thank them for their volunteerism and dedication to our association.”

Tim Martin SEMA Chairman CEO Aftermarket Advisors LLC	James Lawrence SEMA Chairman-Elect CEO Power Automedia	Wade Kawasaki SEMA Immediate Past Chairman & Secretary President and CEO Legendary Companies
Kyle Fickler SEMA Treasurer Dir. of Sales and New Business Development Driven Racing Oil	Chris Douglas Chief Commercial Officer Edelbrock Group	Kim Pendergast CEO Magnuson Superchargers
Ted Wentz III CEO Quadratec Inc.	Donnie Eatherly President P&E Distributors Inc.	Kathryn Reinhardt Senior Marketing Manager 4WP/Pro Comp
Dan Kahn President and CEO Kahn Media Inc.	Steve Whipple Vice President of Sales Edelbrock LLC	Brian Lounsberry Senior Advisor One 6 Motorsports
Melanie White President Hellwig Products	Bunyan L. (Les) Rudd, CPMR President/CSO Bob Cook Sales

SEMA News—December 2020

New Products

Compiled by SEMA News Editors

New Products From Around The Industry

SEMA News regularly publishes new product information from manufacturers as a service to the industry. Product information included in SEMA News will be published on a first-come, first-served basis, edited for length, and chosen based on relevance and image quality. Included below is a compendium of recent product announcements as submitted by member companies.

Mishimoto

Mishimoto has launched its transmission cooler hoses for the ’01–’10 6.6L Duramax platform. The hoses are developed to hold up to GM owners’ high horsepower and towing.

The hose features a PTFE inner liner designed to be oil- and heat-resistant for durability. The nylon outer braid is manufactured to prevent expansion under high pressure and protect against abrasion.

The kit includes -10AN to M22x1.5 fittings for use with many aftermarket radiators.

Information: www.mishimoto.com or 877-466-4744.

AEM

AEM EV has released its VCU300 Vehicle Control Unit. The unit is used in Ford Racing’s CobraJet1400 EV drag concept and in the Huff Motorsports EV dragster.

It is built on OEM hardware and features OEM-quality strategies designed to provide reliability and safety for both the programmer and the end user.

The control unit is engineered to manage four inverter/motor systems, communicate with up to three independent CAN bus networks, and be used on direct-drive and indirect-drive EV setups.

Information: www.aemev.com or 310-484-2322.

Design Engineering Inc.

Design Engineering Inc. has introduced its stainless-steel thermal and acoustical floor and tunnel shield. The floor is designed to be a high-temperature solution for controlling heat and sound in hot rods, street rods, classics, trucks and just about any vehicle.

The flexibility allows the shield to be formed and tightly shaped around firewalls, transmission tunnels, floorboards and anywhere for total protection from the potential harmful effects of heat.

The shields start with a stainless-steel reflective surface backed with a high-temperature-resistant glass fiber manufactured to block heat. Micro-perforations are engineered to control noise. The heat barriers are offered in a 22x19-in. sheet that can be trimmed with tin snips.

Information: www.designengineering.com or 800-264-9472.

Impact Racing

Impact Racing introduces its Super Charger OS20 racing helmet. The helmet features a top air version in a lower profile that is designed to increase overhead clearance.

It is engineered to offer a panoramic field of vision and features a polycarbonate shield.

The helmet includes removable cheek pads and is manufactured to feature fire-retardant, soft-knit Nomex upholstery.

Optionally available cheek pads are available in a variety of thicknesses and configurations to provide a custom fit.

Information: www.impactraceproducts.com or 317-852-3067.

Holley

Holley announces the release of its top-feed Low Ram Manifold Kit. The plenum entry configuration is designed to allow the plenum tops to be fitted to a low-profile base intake manifold.

The short-runner, low-profile base intake manifold is intended for forced-induction applications and was conceived to package with an air-to-water plenum-mounted intercooler with a shorter overall height than possible with other existing intake manifolds.

Information: www.holley.com or 866-464-6553.

Energy Suspension

Energy Suspension announces the release of its performance polyurethane bushing for the Honda CBR. The dampener is designed to provide the solution for smooth shifting and rider confidence.

It is engineered to provide smooth shifting and reduces wear on drive components, outlasting the OEM part equivalent for the life of the machine. The part fits the following Honda CBR models: 600F4–1000R–900R and RVT51/RVT1000.

Information: www.energysuspension.com or 949-361-3935.

Mishimoto

Mishimoto announces the introduction of its performance aluminum radiator for the ’17+ Honda Civic Type R.

The radiator is designed to increase core volume by 48% and fin surface area by 102%.

It features full aluminum construction with TIG-welded end tanks and strutted tubes engineered for durability.

The radiator includes a magnetic drain plug manufactured to capture any metallic debris/fragments in the cooling system.

Information: www.mishimoto.com or 877-466-4744.

Design Engineering Inc.

Design Engineering introduces its Heat Sheath Gold Sleeve. It is available in five sizes and features a lock weave pattern.

The sheath is manufactured to reflect direct heat up to 800ºF. It is designed to protect components and keep them cool in the most demanding applications. The sheath also features a high-temperature hook-and-loop fastening system for secure installation.

It is also available in custom dimensions.

Information: www.designengineering.com or 800-264-9472.

Oracle Lights

Oracle Lighting has launched its new Fiber-Optic Dash Kits. The integrated edge is designed to hold the fiber-optic cable tightly without the use of any adhesive.

The single-color kit is available in six options (white, blue, red, green, amber and ABL).

Specialized fiber-optic cable is also required for install ($4.95), which can be cut with scissors and be reused.

Information: www.oraclelights.com or 800-435-5944.

Champion Brands

Champions Brands announces the release of its Poly-7 Green Grease. The grease is designed to be a green, ultra-heavy-duty, high-temperature grease. It is made using refined petroleum stocks, copolymers and advanced lithium complex additives processed to provide lubrication.

The grease is engineered to stay put under extreme shock loads and offers a very low friction coefficient. It is manufactured to increase lubrication and delivers excellent oxidation, adhesion and pumpability characteristics.

It is an all-weather grease constructed to meet the requirements of NLGI GC-LB for automotive wheel bearing and chassis lubrication.

Information: www.championbrands.com or 800-821-5693.

Red Line Oil

Red Line Synthetic Oil announces the launch of its 15W50 Powersports Oil. The oil is formulated for high-performance engines in a variety of applications, including ATVs, motorcycles, UTVs and additional powersports vehicles.

The motorcycle and powersports lubricants are designed to resist the chopping and shearing action of powersports transmissions while ensuring that the viscosity meets the desired specification. The oil is manufactured to provide wear protection under adverse conditions and extreme temperatures.

It is recommended for metric motorcycles (KTM, Husqvarna, Ducati, Yamaha, BMW, etc.) or any powersports vehicle calling for a 15W50 engine oil, and it is suitable for JASO MA2 applications.

Information: www.redlineoil.com or 707-745-6100.

Oracle Lights

Oracle Lighting introduces its pre-assembled Dynamic ColorShift RGB+A “Black Series” headlights for all ’15–’17 Ford Mustangs. The lineup features amber LEDs designed for a dynamic turn-signal effect.

The replacement headlights feature Dynamic Halos, Dynamic Tai-Bar DRL and Dynamic Demon Eyes and include everything needed for installation. Mustang fitments include Base, EcoBoost, EcoBoost Premium, GT, GT 50 Years Limited Edition, GT Premium, Shelby GT350, Shelby GT350R, V6 and V8.

The lights are constructed to be controlled through an app that features more than 200 preprogrammed moving patterns as well as static color control and white DRL mode for normal street driving.

Information: www.oraclelights.com or 800-435-5944.

LGE-CTS

LGE-CTS announces the introduction of its Baja Forged kits for the ’18–’20 Ford Expedition 2WD/4WD. Featured in the line for the Expedition are a front bumper kit, a rear bumper kit, a bumper light-bar kit, fender flares and a roof rack.

The kits are engineered to give a Prerunner look and to be durable. They are also designed to follow the contour lines of the Expedition.

Information: www.bajaforged.com or 909-599-2203.

Vintage Air

The Gen IV SureFit air-conditioning system for ’73–’79 Ford F-100 pickups and ’78–’79 Broncos is available as a complete kit as well as an evaporator kit. The system employs a fully electronic microprocessor control system that eliminates cables or vacuum connections.

The separate parallel-flow copper heating coils and aluminum plate-and-fin cooling coils are designed to provide outstanding performance and infinite “just right” temperature air blends, blower fan speed adjustments, and high-volume dehumidified defrost.

The kit also includes a three-lever, fully electronic LED backlit control panel that replaces the factory control panel. The factory A/C kit uses the original in-dash louvers, and OEM-style in-dash louvers are included with non-factory A/C systems.

Information: www.vintageair.com or 800-862-6658.

Hellwig Products

Hellwig Products has released its helper springs for the ’20 Toyota Tundra, including 2WD and 4WD models. The helper springs are designed to feature 2,000-lb. load-leveling capacity and to maintain level ride height and better overall driver control when the vehicle is loaded.

The springs are engineered to improve vehicle control and safety by maintaining even weight distribution over the front and rear axles.

Information: www.hellwigproducts.com or 800-435-5944.

Holley

Holley has released its 100-gph fuel pump for naturally aspirated and forced-induction EFI vehicles. It utilizes a -10 AN female inlet and a -6 AN female outlet for installation on new applications and/or replacement of existing fuel pumps.

The pump is designed to support up to 900 EFI or 1,050 carbureted hp and be compatible with gasoline, E85 or diesel. A male -6 to -8 AN fitting with integral high-pressure check valve is included.

Note: The fuel pump is rated for use with ethanol-blended fuels (E85/E90) and all types of gasoline, but pump life will be diminished if used with 100% ethanol fuels.

Information: www.holley.com or 866-464-6553.

Mahle Motorsport

Mahle Motorsport introduces Porsche 911 2.7L and 2.9L Piston Kits designed to pair with Nickies Performance air-cooled cylinders. One is a standard-bore 90mm that retains the stock 2.7L displacement, and the second is a 93mm big-bore piston cylinder kit that equals 2.9L of displacement.

Both piston and cylinder kits are engineered to incorporate deeper valve relief to accommodate performance camshafts, while the big-bore 2.9L piston also has larger valve reliefs to accommodate bigger valves. Each combination is constructed for durability for street or for SCCA- and PCA-legal race applications.

The pistons also feature hard-anodized top ring grooves manufactured for durability to protect against micro welding. The kit is complete with a steel 1.2mm top ring, 1.5mm second and 3.0mm oil ring set, precision CNC-machined bores, and heavy-duty tool steel wrist pins.

Information: www.mahlemotorsports.com or 888-255-1942.

Hooker BlackHeart

Hooker BlackHeart introduces its header-back exhaust system for the 4.6L ’05–’09 Mustang GT. The system is designed for use with BlackHeart long-tube headers. It is built with 3-in. 304SS tubing, has an X-pipe and high-flow straight-through mufflers engineered to produce an aggressive tone.

The system is manufactured to be lighter than OE by 18% or 11 lbs. Note: This product is not street-legal and may only be used on race vehicles that must be used exclusively for racing or other forms of competition.

Race vehicles must not be registered and must never be used on the street. It is illegal to install this product on a registered vehicle and use it on the street.

Information: www.holley.com or 866-464-6553.

Edge Products

Edge Products introduces its CTS3 Backup Camera. The camera is designed for drivers who want to hook up to trailers with ease.

The camera mode on the CTS3 products automatically engages when the vehicle goes into reverse (only on automatic applications when gear PID is an option) or if the user selects a camera icon from the top menu anytime.

The kit includes a license-plate mount (pictured), an RCA-to-USB video signal adapter, and night-vision LEDs for optimal lighting.

Information: www.edgeproducts.com or 888-360-3343.

SEMA News—December 2020

BUSINESS

Navigating the New Normal

SEMA Council and Network Leaders Share How COVID-19 Has Changed the Landscape of Their Respective Marketplaces

By Chad Simon

The entire world was thrown a curveball called COVID-19 in 2020. In order to survive, businesses have had to adapt by using various techniques, including implementing social-distancing measures or going completely virtual. SEMA’s councils and networks are no exception. We spoke with leaders of each organization to find out what initiatives they are working on, what’s currently trending in their markets, and the challenges they face in navigating today’s new normal heading into 2021.

Automotive Restoration Market Organization (ARMO)

Chair: Ben Tucker, Camaro Central/Firebird Central/Muscle Car Industries/Muscle Car Central

As I came in as the new ARMO chair in June of this year, our council’s agenda changed quickly due to COVID-19. In-person events such as ARMO’s Hot Product Showcase, Builders Panel, general meeting and reception were all cancelled, making way for virtual-experience discussions for each. With the official notice of the 2020 SEMA Show being cancelled, our council switched gears from our current task forces to begin the process of building virtual events. SEMA hosted several virtual meetings and events with success recently using Zoom and other platforms.

The restoration industry as a whole seems to be doing great. Manufacturers and retailers with an e-commerce outlet are steady if not up from this time last year, while others in the industry that mainly relied on walk-in traffic, swap meets or car shows have seen a decline. The pandemic set the stage for e-commerce to handle car-show clientele as well as mail-order customers. One thing is for sure: The restoration industry is alive and strong.

Over the next year, I see the restoration marketplace continuing to be strong and even show growth. With spring stay-at-home mandates, consumers came out of the woodwork. If a classic car was hiding under some tarps in the backyard, there was a good chance that it got pushed into the garage for restoration. Several retail companies saw healthy growth in April and May when several thousand new customers simply found time to start a project. Those customers will continue to help fuel the restoration segment of our industry over the next year. Consumers who usually waited for car shows to pick up their parts are going to become online customers with the dwindling car-show schedules.

The restoration side of the industry seems to be doing well as a whole. Many companies have implemented strategies to not only survive but also grow in the new normal. From remote employee systems to new e-commerce websites, the restoration industry is shaping up to handle business post-COVID-19.

Additional challenges for our market include material shortages and an increase in demand. Industry-member companies will have to forecast for longer lead times.

Honestly, one of my personal reasons for joining the ARMO select committee was to help the youth programs grow. Without the next generation getting introduced into the hobby/industry, we might miss out on the next Vic Edelbrock, Chip Foose or Marla Moore. Youth initiative programs in our industry are key to promoting future enthusiasts and employees. We’ll wait for the SEMA Board to announce any new youth programs and then see how ARMO might integrate those programs into the restoration segment.

Emerging Trends & Technology Network (ETTN)

Chair: Ian Lehn, BOOSTane

COVID-19 has impacted two of our largest initiatives, which were focused on sharing. The Vehicle Sharing Program—designed to be an exchange of sorts for businesses and their fleets for testing and development—was put on hold during the pandemic to avoid unnecessary exposure. The Student Competition Program is for student engineers competing in Formula SAE and member companies. The goal was to create a pipeline for those innovators into the automotive aftermarket. However, we had to pivot our approach with schools and competitions up in the air, but we’re still optimistic with our progress.

I think we will see some business practices carry through over the next year. For instance, virtual meetings will take the place of expensive in-person meetings; offices will downsize; and more people will work from home, etc.

Industry sales seemed to stay on target throughout the pandemic, and I even anticipate an uptick as businesses continue to reopen. That will probably be followed by a little bit of a longer lull than usual, as folks will be pretty well stocked on products and parts.

ETTN’s goal is to continue to deliver value to our members, even from afar. One way we have been successful at that is through our Live Chat. Instead of individual speakers presenting on unrelated topics, we’ve capitalized on our more captivated audience to offer a Live Chat Series, which is focused on explaining the steps toward developing a new product and taking it
to market.

The biggest concern that we are experiencing and foresee continuing to be an issue is the availability of raw materials. With shutdowns and delays, the accordion effect of supply for certain raw materials has continued to be an issue. Larger raw-material purchases cause longer delays.

Hot Rod Industry Alliance (HRIA)

Chair: Jeff Major, Bedwood and Parts LLC

Although some companies were adversely impacted by COVID-19, many reported significant growth. Waiving any negative impacts of 2020 being a presidential election year, I expect the growth trend to continue over the next year.

Due to the restraints imposed by COVID-19, HRIA held its long-range planning meeting virtually and recently held its first virtual open meeting. Both were successful. We are finalizing a searchable HRIA member-company buyer’s guide for use by the hot-rodding public. We are also preparing a book on the history of HRIA and are working on having a presence at an event on the East Coast in early 2021.

The trend in our segment of the industry continues to be the proliferation of trucks. They are the fastest-growing segment in the aftermarket.

Motorsports Parts Manufacturers Council (MPMC)

Chair: Rob Fisher, E3 Spark Plugs

COVID-19 caused us to move our long-range planning meeting to a remote (Zoom) format. Without the 2020 SEMA Show, we have obviously had to put some reception plans on hold. Finally, we are creating a Plan B for the Media Trade Conference (MTC), should we need it, so we are being very proactive.

As for the industry as a whole, it literally stopped for several weeks when COVID-19 stalled much of racing in this country, but we started to see some real momentum as states began to reopen. Many of our council members are reporting better-than-average sales over the last several months. During that time, we focused on getting our council members up-to-date information regarding local rules and track reopenings. The SEMA Show and PRI Trade Show were a tremendous help in accomplishing that.

Over the next year, I believe we will see a surge in the demand for motorsports—particularly at the local or grassroots level. The pandemic forced many major-league sports to curtail or cancel their events, and that created a pent-up demand from consumers for fun/distracting activities. That pent-up demand can be satisfied by motorsports. It’s up to us to market ourselves to potential new fans.

With the MTC on the horizon, the council is building a series of webinars that will be directed at both exhibitors and the media attendees alike. In 2019, we began bringing “new media influencers” to the MTC with much success. We are building on that success by creating webinars that will help maximize everyone’s experience with the MTC.

I think one of the bigger trends in our market is the accelerated adoption of digital technology, not only to host virtual meetings but also its integration into daily business activities. Properly utilized, I think new digital platforms and software will revolutionize the way our industry does business and goes to market.

One of the underlying challenges that our market could potentially experience relates to the sales increases many of our council members are currently experiencing and how to keep momentum rolling. The concern would be what to do if demand wanes. Being proactive in addressing the “what-ifs” will better prepare our members for the future. Through education and communication, the MPMC is striving to do just that.

Professional Restylers Organization (PRO)

Chair: Dino Perfetti, Automotive Concepts

COVID-19 created challenges within the restyling industry, much as it has in many industries. Currently, new- and used-car sales demand is strong; however, inventory levels on new cars and trucks are at an all-time low due to manufacturer shutdowns in March, April and May. Parts shortages exist in all areas of the industry. We will slowly see inventories increase over the next several months as parts shortages begin to diminish.

As a council, we have been working on best practices when selling to dealerships during this challenging time. Consumer safety is the focus in all industries.

PRO held a town hall virtual event that discussed procedural changes for interacting with consumers. It is apparent that more and more vehicle purchases will be done online, with many consumers taking delivery of their purchases either at home or at the office. This creates challenges in consumer awareness of aftermarket products that are available for their new vehicles.

At SEMA360, PRO hosted a seminar discussing the challenges and offering strategic plans for increasing sales for restylers during these changing times. Restyling shops were joined by selected dealer groups in discussing improved ways they could bring aftermarket product awareness to consumers during the current
buying process.

A trend that we are seeing in vehicle restyling in recent months is the desire for more in-vehicle entertainment. With travel restrictions to other countries in place, more families are hitting the road for a much-needed getaway. This is apparent by the huge uptick in the RV industry. Products such as rear-seat entertainment systems that can interact with all passengers have been hot sellers in the past couple of months. On the off-road side of the business, overlanding product demand has increased. The idea of traveling off the grid for a few days at a time while enjoying the great outdoors has enticed many consumers to get outside the four walls in which they have been restricted.

SEMA Businesswomen’s Network (SBN)

Chair: Lana Chrisman, Lions Automobilia Foundation

COVID-19 eliminated our in-person gatherings and is challenging us on how to engage with our membership and be impactful. As a network, our most successful event is Gear-Up Girl, so we are working on creating a virtual version. We are exploring a similar option for our SBN reception at the SEMA Show, turning our physical world into a virtual one to continue to support women in the industry. Our goals are to continue to explore opportunities to reach our segment and provide resources for career advancement.

The industry segment in which I work has been closed during COVID-19. California closed all museums, so the Lions Automobilia Foundation and its museum have been closed since March. We are taking this time to add more robust contents to our exhibits, including a new gallery expansion.

I’m optimistic that our industry will respond in an upward motion once COVID-19 restrictions are lifted. In the interim, I believe our industry to be resilient because of the passion that it is fueled by and the community that makes it strong.

I’ve spoken with a broad range of colleagues in different segments of the industry, and I’ve heard a variety of responses. Some are having the best months in their companies’ histories, while others are circling the drain. The companies that meet the needs of larger demographics appear to be enjoying unexpected success during this pandemic when there’s more time and money for people to spend on
their hobbies.

The SBN is working on virtual platforms to engage our membership. We’ve added Live Chats, speaking with female influencers who share their experiences in the industry. We are continuing to promote women in the industry through our She Is SEMA campaign, and we are in the early stages of developing an online event for members to share their rides or host behind-the-scenes shop tours.

The latest trend we are seeing is greater online engagement and providing creative online content and resources to support our membership and industry. The pandemic exposed areas of business that could be improved and become more efficient. As awful as the effects of COVID-19 have been and the tragic loss of so many lives, we take what we have learned and apply it to be stronger and better.

My greatest concern is that we reach members who really need our support. We talk about turning to virtual platforms, but most of the companies in our industry are small businesses that may not have the technical resources or are not familiar with online platforms and don’t participate.

Truck & Off-Road Alliance (TORA)

Chair: Erika Marquez, Warn Industries Inc.

Over the next year, I envision many companies becoming savvy at social media and electronic platforms to promote their products. Retailers will expand from brick-and-mortar to digital and implement safer ways to deliver accessories with curbside pickups and home delivery.

Manufacturers are still trying to catch up with production delays due to business shutdowns as a result of the pandemic, but we have noticed that the demand for truck parts and accessories is on the rise since enthusiasts have more time to work in their garages and more interest in spending time with their families in a safer outdoor environment. Consumer sentiment is positive, especially in the truck and off-
road segment.

According to the most recent issue of “SEMA Future Trends,” the light-truck segment—which includes pickups, vans, SUVs and CUVs—is forecast to account for 69% of all new-vehicle sales by 2025. From 2019–2025, new-truck sales are estimated to rise 10% overall. That is great news for our segment! Also due to the pandemic, we expect more pickup commuters to get into outdoor activities, including off-roading, overlanding and RVing.

The light-truck and off-road industry segments are thriving, according to the “2019 SEMA Industry Perspectives” report, which stated that 73% of businesses expected sales to increase in 2020. OEMs are capitalizing on this trend by launching new pickups and SUVs that open a wide range of opportunities for aftermarket manufacturers to develop accessories and performance parts. New and notable vehicle launches include last year’s 2020 model-year Gladiator and Ranger pickups. This year, Ford will launch the new ’21 model-year Bronco, along with the all-new 14th-generation F-150. Jeep will debut the all-new ’21 Grand Wagoneer, and Ram will release the ’21 Rebel TRX. Looking ahead, there is an opportunity to innovate products for future electric pickups, including models from Tesla, Rivian, Bollinger and General Motors.

Additional challenges within our market include keeping up with current demand, which is definitely a good problem to have! Growth in the overlanding segment is exploding with new enthusiasts. This is an opportunity for pickup accessory manufacturers to diversify into the segment and support the high demand from consumers.

Another challenge we are experiencing now is the tight labor market. “In fact, our TORA Chair-Elect Troy Wirtz has noted that labor may be our biggest challenge. So we will be looking at creative ways to attract talent and increase benefits to our member businesses.”

Overall, this year has been a challenging one for the council due to the shelter-in-place guidelines imposed by the local and federal authorities. Four of our networking regional events for this fiscal year had to be rescheduled to a later date, and the live SEMA Show was cancelled for 2020.

One of the best ways for us to interact with our members and to create a sense of community is through networking events. Thankfully, technology has been a great support to our effort to continue our interactions with at-large membership. We have been able to host general membership meetings, upcoming virtual seminars, award ceremonies and even networking events.

We are currently working on delivering value through education. The original plan was to host seminars during the SEMA Show, but then we are moved forward with virtual events. One of the seminars, entitled “Off-Road 2.0: Performance Technology and Lifestyle Trends, Powered by TORA,” was formed with a panel of experts in the off-road and powersports segments. Another event we hosted was an off-road builders panel, featuring manufacturers and builders who will offer insights into trends and identify market opportunities.

The council is also continuously highlighting TORA volunteers through a Member Spotlight in SEMA eNews. We do this because we have so much support from volunteers who are not select-committee members, and this is a way to recognize their efforts. All of our volunteers help contribute to the success of our programs and our council.

Wheel & Tire Council (WTC)

Chair: Tyson Boyer, Dill Air Controls Products LLC

COVID-19’s impact on the WTC is somewhat difficult to measure. In the short term, it has eliminated in-person meetings, including the annual Council Summit. However, online video platforms, including Zoom and Skype, are now common ground and a way to keep us all personally connected.

We are seeing mixed results on the industry side. Independent tire dealers are recovering well and, in a few cases, stronger than originally forecasted pre-COVID-19. Car dealers were able to navigate the early COVID-19 timeframe by pushing strong deals into the market. Although they are also on the road to recovery, they still have a way to go, given the unknown duration of this pandemic coupled with their fall new-model additions arriving versus overstock of current models.

For regional- and national-level tire retailers, the headlines are the telling stories. As a subsegment, they are coming back in a spotty formation. These measurements or “spotty-spots,” if you will, are more visible when dissected on geographic scales, marking the dependency on the economic situation of the local market. COVID-19, hurricanes, flooding, forest fires, etc. all play into this.

Some of the greatest divide is apparent with tire manufacturers. Tier 1s are struggling due to their premium market position. As that occurs, Tier 2s are moving in quickly to take up larger market shares. Whether this holds out this way or tilts back will not be very clear until we are well into Q2 2021 at minimum, or
even Q3.

If we look at the whole marketplace within the tire/wheel segment, the most important question business leaders should ask themselves is, “How quickly can I adapt my business to the challenges ahead?”

We are entering new and unprecedented challenges. Miles driven is an important feeding funnel. This year’s decrease may be felt for some time. Again, this goes back to your ability to differentiate your business, minimize the level of internal risk while creatively increasing your direct-to-consumer strategy. Do not shortcut or downplay your digital spend, and be sure to dial into your audience to maximize your usage.

If unsure, have a look at some markets that are exploding with business. Some have changed their approach while others are fortunate to be selling products in the channels that prosper during a pandemic. For example, RVs/trailers, trailer hitches and mountain bikes are all experiencing strong growth. Finding a perfect product recipe is not something any one of us could really have anticipated if we were all asked in January 2020.

Lastly, the product segment that is near and dear to many of us is wheels. Passenger and light-truck wheel sales are setting new records. That is true for any retailer and wheel manufacturer. I think we all have some reasons we can point to; however, with this large of a growth during a global pandemic, there are mysterious insights for which many are thankful.

WTC is continuing to find ways to communicate with members and the greater audience. At the 2019 SEMA Show, we launched The Stage’s inaugural event. The success of the videos that debuted every two to three weeks starting in the spring have shown the importance of growing digital platforms. By the time you read this, the second annual The Stage will have debuted at SEMA360. If you were unable to see the big names we lined up, visit www.sema.org/wtc.

Member spotlights and more live video streams are in the works to support the growth and focus on education, aligning with WTC’s vision.

Young Executives Network (YEN)

Chair: Kirstin Stone, Derive Systems

The Young Executives Network (YEN) has consistently held on-site networking events throughout the country. Unfortunately, COVID-19 brought that to a near-immediate halt. Throughout the pandemic, we’ve put more focus on the Live Chat program, and we’ve been more successful than ever before, thanks to the efforts of Jeremy Headlee, who’s been running that program. We’re also starting a virtual happy hour series, and we’re looking forward to interacting more with our membership in the weeks and months to come.

I think one of the big takeaways for us is really how many opportunities we have for virtual interaction, even after the world really opens back up. There are some programs (like the virtual happy hours) that I’m looking forward to continuing.

Thankfully, much of the industry has continued to prosper despite the weird economic circumstances we’re all living in, and I’m looking forward to continued growth as we move out of this dip.

We are currently working on more virtual events and going bigger than ever on our in-person networking opportunities as soon as we’re able.

Because we’re a network, we don’t see specific segment trends, but watching networking and human communication evolve has been fascinating. While the opportunities to interact are actually more abundant than ever, it’s also shown the value of meeting people in person. While the virtual events do work, there’s nothing like seeing an industry friend in person, catching up, and making live new connections.

SEMA News—December 2020

BUSINESS

Navigating the New Normal

SEMA Council and Network Leaders Share How COVID-19 Has Changed the Landscape of Their Respective Marketplaces

By Chad Simon

The entire world was thrown a curveball called COVID-19 in 2020. In order to survive, businesses have had to adapt by using various techniques, including implementing social-distancing measures or going completely virtual. SEMA’s councils and networks are no exception. We spoke with leaders of each organization to find out what initiatives they are working on, what’s currently trending in their markets, and the challenges they face in navigating today’s new normal heading into 2021.

Automotive Restoration Market Organization (ARMO)

Chair: Ben Tucker, Camaro Central/Firebird Central/Muscle Car Industries/Muscle Car Central

As I came in as the new ARMO chair in June of this year, our council’s agenda changed quickly due to COVID-19. In-person events such as ARMO’s Hot Product Showcase, Builders Panel, general meeting and reception were all cancelled, making way for virtual-experience discussions for each. With the official notice of the 2020 SEMA Show being cancelled, our council switched gears from our current task forces to begin the process of building virtual events. SEMA hosted several virtual meetings and events with success recently using Zoom and other platforms.

The restoration industry as a whole seems to be doing great. Manufacturers and retailers with an e-commerce outlet are steady if not up from this time last year, while others in the industry that mainly relied on walk-in traffic, swap meets or car shows have seen a decline. The pandemic set the stage for e-commerce to handle car-show clientele as well as mail-order customers. One thing is for sure: The restoration industry is alive and strong.

Over the next year, I see the restoration marketplace continuing to be strong and even show growth. With spring stay-at-home mandates, consumers came out of the woodwork. If a classic car was hiding under some tarps in the backyard, there was a good chance that it got pushed into the garage for restoration. Several retail companies saw healthy growth in April and May when several thousand new customers simply found time to start a project. Those customers will continue to help fuel the restoration segment of our industry over the next year. Consumers who usually waited for car shows to pick up their parts are going to become online customers with the dwindling car-show schedules.

The restoration side of the industry seems to be doing well as a whole. Many companies have implemented strategies to not only survive but also grow in the new normal. From remote employee systems to new e-commerce websites, the restoration industry is shaping up to handle business post-COVID-19.

Additional challenges for our market include material shortages and an increase in demand. Industry-member companies will have to forecast for longer lead times.

Honestly, one of my personal reasons for joining the ARMO select committee was to help the youth programs grow. Without the next generation getting introduced into the hobby/industry, we might miss out on the next Vic Edelbrock, Chip Foose or Marla Moore. Youth initiative programs in our industry are key to promoting future enthusiasts and employees. We’ll wait for the SEMA Board to announce any new youth programs and then see how ARMO might integrate those programs into the restoration segment.

Emerging Trends & Technology Network (ETTN)

Chair: Ian Lehn, BOOSTane

COVID-19 has impacted two of our largest initiatives, which were focused on sharing. The Vehicle Sharing Program—designed to be an exchange of sorts for businesses and their fleets for testing and development—was put on hold during the pandemic to avoid unnecessary exposure. The Student Competition Program is for student engineers competing in Formula SAE and member companies. The goal was to create a pipeline for those innovators into the automotive aftermarket. However, we had to pivot our approach with schools and competitions up in the air, but we’re still optimistic with our progress.

I think we will see some business practices carry through over the next year. For instance, virtual meetings will take the place of expensive in-person meetings; offices will downsize; and more people will work from home, etc.

Industry sales seemed to stay on target throughout the pandemic, and I even anticipate an uptick as businesses continue to reopen. That will probably be followed by a little bit of a longer lull than usual, as folks will be pretty well stocked on products and parts.

ETTN’s goal is to continue to deliver value to our members, even from afar. One way we have been successful at that is through our Live Chat. Instead of individual speakers presenting on unrelated topics, we’ve capitalized on our more captivated audience to offer a Live Chat Series, which is focused on explaining the steps toward developing a new product and taking it
to market.

The biggest concern that we are experiencing and foresee continuing to be an issue is the availability of raw materials. With shutdowns and delays, the accordion effect of supply for certain raw materials has continued to be an issue. Larger raw-material purchases cause longer delays.

Hot Rod Industry Alliance (HRIA)

Chair: Jeff Major, Bedwood and Parts LLC

Although some companies were adversely impacted by COVID-19, many reported significant growth. Waiving any negative impacts of 2020 being a presidential election year, I expect the growth trend to continue over the next year.

Due to the restraints imposed by COVID-19, HRIA held its long-range planning meeting virtually and recently held its first virtual open meeting. Both were successful. We are finalizing a searchable HRIA member-company buyer’s guide for use by the hot-rodding public. We are also preparing a book on the history of HRIA and are working on having a presence at an event on the East Coast in early 2021.

The trend in our segment of the industry continues to be the proliferation of trucks. They are the fastest-growing segment in the aftermarket.

Motorsports Parts Manufacturers Council (MPMC)

Chair: Rob Fisher, E3 Spark Plugs

COVID-19 caused us to move our long-range planning meeting to a remote (Zoom) format. Without the 2020 SEMA Show, we have obviously had to put some reception plans on hold. Finally, we are creating a Plan B for the Media Trade Conference (MTC), should we need it, so we are being very proactive.

As for the industry as a whole, it literally stopped for several weeks when COVID-19 stalled much of racing in this country, but we started to see some real momentum as states began to reopen. Many of our council members are reporting better-than-average sales over the last several months. During that time, we focused on getting our council members up-to-date information regarding local rules and track reopenings. The SEMA Show and PRI Trade Show were a tremendous help in accomplishing that.

Over the next year, I believe we will see a surge in the demand for motorsports—particularly at the local or grassroots level. The pandemic forced many major-league sports to curtail or cancel their events, and that created a pent-up demand from consumers for fun/distracting activities. That pent-up demand can be satisfied by motorsports. It’s up to us to market ourselves to potential new fans.

With the MTC on the horizon, the council is building a series of webinars that will be directed at both exhibitors and the media attendees alike. In 2019, we began bringing “new media influencers” to the MTC with much success. We are building on that success by creating webinars that will help maximize everyone’s experience with the MTC.

I think one of the bigger trends in our market is the accelerated adoption of digital technology, not only to host virtual meetings but also its integration into daily business activities. Properly utilized, I think new digital platforms and software will revolutionize the way our industry does business and goes to market.

One of the underlying challenges that our market could potentially experience relates to the sales increases many of our council members are currently experiencing and how to keep momentum rolling. The concern would be what to do if demand wanes. Being proactive in addressing the “what-ifs” will better prepare our members for the future. Through education and communication, the MPMC is striving to do just that.

Professional Restylers Organization (PRO)

Chair: Dino Perfetti, Automotive Concepts

COVID-19 created challenges within the restyling industry, much as it has in many industries. Currently, new- and used-car sales demand is strong; however, inventory levels on new cars and trucks are at an all-time low due to manufacturer shutdowns in March, April and May. Parts shortages exist in all areas of the industry. We will slowly see inventories increase over the next several months as parts shortages begin to diminish.

As a council, we have been working on best practices when selling to dealerships during this challenging time. Consumer safety is the focus in all industries.

PRO held a town hall virtual event that discussed procedural changes for interacting with consumers. It is apparent that more and more vehicle purchases will be done online, with many consumers taking delivery of their purchases either at home or at the office. This creates challenges in consumer awareness of aftermarket products that are available for their new vehicles.

At SEMA360, PRO hosted a seminar discussing the challenges and offering strategic plans for increasing sales for restylers during these changing times. Restyling shops were joined by selected dealer groups in discussing improved ways they could bring aftermarket product awareness to consumers during the current
buying process.

A trend that we are seeing in vehicle restyling in recent months is the desire for more in-vehicle entertainment. With travel restrictions to other countries in place, more families are hitting the road for a much-needed getaway. This is apparent by the huge uptick in the RV industry. Products such as rear-seat entertainment systems that can interact with all passengers have been hot sellers in the past couple of months. On the off-road side of the business, overlanding product demand has increased. The idea of traveling off the grid for a few days at a time while enjoying the great outdoors has enticed many consumers to get outside the four walls in which they have been restricted.

SEMA Businesswomen’s Network (SBN)

Chair: Lana Chrisman, Lions Automobilia Foundation

COVID-19 eliminated our in-person gatherings and is challenging us on how to engage with our membership and be impactful. As a network, our most successful event is Gear-Up Girl, so we are working on creating a virtual version. We are exploring a similar option for our SBN reception at the SEMA Show, turning our physical world into a virtual one to continue to support women in the industry. Our goals are to continue to explore opportunities to reach our segment and provide resources for career advancement.

The industry segment in which I work has been closed during COVID-19. California closed all museums, so the Lions Automobilia Foundation and its museum have been closed since March. We are taking this time to add more robust contents to our exhibits, including a new gallery expansion.

I’m optimistic that our industry will respond in an upward motion once COVID-19 restrictions are lifted. In the interim, I believe our industry to be resilient because of the passion that it is fueled by and the community that makes it strong.

I’ve spoken with a broad range of colleagues in different segments of the industry, and I’ve heard a variety of responses. Some are having the best months in their companies’ histories, while others are circling the drain. The companies that meet the needs of larger demographics appear to be enjoying unexpected success during this pandemic when there’s more time and money for people to spend on
their hobbies.

The SBN is working on virtual platforms to engage our membership. We’ve added Live Chats, speaking with female influencers who share their experiences in the industry. We are continuing to promote women in the industry through our She Is SEMA campaign, and we are in the early stages of developing an online event for members to share their rides or host behind-the-scenes shop tours.

The latest trend we are seeing is greater online engagement and providing creative online content and resources to support our membership and industry. The pandemic exposed areas of business that could be improved and become more efficient. As awful as the effects of COVID-19 have been and the tragic loss of so many lives, we take what we have learned and apply it to be stronger and better.

My greatest concern is that we reach members who really need our support. We talk about turning to virtual platforms, but most of the companies in our industry are small businesses that may not have the technical resources or are not familiar with online platforms and don’t participate.

Truck & Off-Road Alliance (TORA)

Chair: Erika Marquez, Warn Industries Inc.

Over the next year, I envision many companies becoming savvy at social media and electronic platforms to promote their products. Retailers will expand from brick-and-mortar to digital and implement safer ways to deliver accessories with curbside pickups and home delivery.

Manufacturers are still trying to catch up with production delays due to business shutdowns as a result of the pandemic, but we have noticed that the demand for truck parts and accessories is on the rise since enthusiasts have more time to work in their garages and more interest in spending time with their families in a safer outdoor environment. Consumer sentiment is positive, especially in the truck and off-
road segment.

According to the most recent issue of “SEMA Future Trends,” the light-truck segment—which includes pickups, vans, SUVs and CUVs—is forecast to account for 69% of all new-vehicle sales by 2025. From 2019–2025, new-truck sales are estimated to rise 10% overall. That is great news for our segment! Also due to the pandemic, we expect more pickup commuters to get into outdoor activities, including off-roading, overlanding and RVing.

The light-truck and off-road industry segments are thriving, according to the “2019 SEMA Industry Perspectives” report, which stated that 73% of businesses expected sales to increase in 2020. OEMs are capitalizing on this trend by launching new pickups and SUVs that open a wide range of opportunities for aftermarket manufacturers to develop accessories and performance parts. New and notable vehicle launches include last year’s 2020 model-year Gladiator and Ranger pickups. This year, Ford will launch the new ’21 model-year Bronco, along with the all-new 14th-generation F-150. Jeep will debut the all-new ’21 Grand Wagoneer, and Ram will release the ’21 Rebel TRX. Looking ahead, there is an opportunity to innovate products for future electric pickups, including models from Tesla, Rivian, Bollinger and General Motors.

Additional challenges within our market include keeping up with current demand, which is definitely a good problem to have! Growth in the overlanding segment is exploding with new enthusiasts. This is an opportunity for pickup accessory manufacturers to diversify into the segment and support the high demand from consumers.

Another challenge we are experiencing now is the tight labor market. “In fact, our TORA Chair-Elect Troy Wirtz has noted that labor may be our biggest challenge. So we will be looking at creative ways to attract talent and increase benefits to our member businesses.”

Overall, this year has been a challenging one for the council due to the shelter-in-place guidelines imposed by the local and federal authorities. Four of our networking regional events for this fiscal year had to be rescheduled to a later date, and the live SEMA Show was cancelled for 2020.

One of the best ways for us to interact with our members and to create a sense of community is through networking events. Thankfully, technology has been a great support to our effort to continue our interactions with at-large membership. We have been able to host general membership meetings, upcoming virtual seminars, award ceremonies and even networking events.

We are currently working on delivering value through education. The original plan was to host seminars during the SEMA Show, but then we are moved forward with virtual events. One of the seminars, entitled “Off-Road 2.0: Performance Technology and Lifestyle Trends, Powered by TORA,” was formed with a panel of experts in the off-road and powersports segments. Another event we hosted was an off-road builders panel, featuring manufacturers and builders who will offer insights into trends and identify market opportunities.

The council is also continuously highlighting TORA volunteers through a Member Spotlight in SEMA eNews. We do this because we have so much support from volunteers who are not select-committee members, and this is a way to recognize their efforts. All of our volunteers help contribute to the success of our programs and our council.

Wheel & Tire Council (WTC)

Chair: Tyson Boyer, Dill Air Controls Products LLC

COVID-19’s impact on the WTC is somewhat difficult to measure. In the short term, it has eliminated in-person meetings, including the annual Council Summit. However, online video platforms, including Zoom and Skype, are now common ground and a way to keep us all personally connected.

We are seeing mixed results on the industry side. Independent tire dealers are recovering well and, in a few cases, stronger than originally forecasted pre-COVID-19. Car dealers were able to navigate the early COVID-19 timeframe by pushing strong deals into the market. Although they are also on the road to recovery, they still have a way to go, given the unknown duration of this pandemic coupled with their fall new-model additions arriving versus overstock of current models.

For regional- and national-level tire retailers, the headlines are the telling stories. As a subsegment, they are coming back in a spotty formation. These measurements or “spotty-spots,” if you will, are more visible when dissected on geographic scales, marking the dependency on the economic situation of the local market. COVID-19, hurricanes, flooding, forest fires, etc. all play into this.

Some of the greatest divide is apparent with tire manufacturers. Tier 1s are struggling due to their premium market position. As that occurs, Tier 2s are moving in quickly to take up larger market shares. Whether this holds out this way or tilts back will not be very clear until we are well into Q2 2021 at minimum, or
even Q3.

If we look at the whole marketplace within the tire/wheel segment, the most important question business leaders should ask themselves is, “How quickly can I adapt my business to the challenges ahead?”

We are entering new and unprecedented challenges. Miles driven is an important feeding funnel. This year’s decrease may be felt for some time. Again, this goes back to your ability to differentiate your business, minimize the level of internal risk while creatively increasing your direct-to-consumer strategy. Do not shortcut or downplay your digital spend, and be sure to dial into your audience to maximize your usage.

If unsure, have a look at some markets that are exploding with business. Some have changed their approach while others are fortunate to be selling products in the channels that prosper during a pandemic. For example, RVs/trailers, trailer hitches and mountain bikes are all experiencing strong growth. Finding a perfect product recipe is not something any one of us could really have anticipated if we were all asked in January 2020.

Lastly, the product segment that is near and dear to many of us is wheels. Passenger and light-truck wheel sales are setting new records. That is true for any retailer and wheel manufacturer. I think we all have some reasons we can point to; however, with this large of a growth during a global pandemic, there are mysterious insights for which many are thankful.

WTC is continuing to find ways to communicate with members and the greater audience. At the 2019 SEMA Show, we launched The Stage’s inaugural event. The success of the videos that debuted every two to three weeks starting in the spring have shown the importance of growing digital platforms. By the time you read this, the second annual The Stage will have debuted at SEMA360. If you were unable to see the big names we lined up, visit www.sema.org/wtc.

Member spotlights and more live video streams are in the works to support the growth and focus on education, aligning with WTC’s vision.

Young Executives Network (YEN)

Chair: Kirstin Stone, Derive Systems

The Young Executives Network (YEN) has consistently held on-site networking events throughout the country. Unfortunately, COVID-19 brought that to a near-immediate halt. Throughout the pandemic, we’ve put more focus on the Live Chat program, and we’ve been more successful than ever before, thanks to the efforts of Jeremy Headlee, who’s been running that program. We’re also starting a virtual happy hour series, and we’re looking forward to interacting more with our membership in the weeks and months to come.

I think one of the big takeaways for us is really how many opportunities we have for virtual interaction, even after the world really opens back up. There are some programs (like the virtual happy hours) that I’m looking forward to continuing.

Thankfully, much of the industry has continued to prosper despite the weird economic circumstances we’re all living in, and I’m looking forward to continued growth as we move out of this dip.

We are currently working on more virtual events and going bigger than ever on our in-person networking opportunities as soon as we’re able.

Because we’re a network, we don’t see specific segment trends, but watching networking and human communication evolve has been fascinating. While the opportunities to interact are actually more abundant than ever, it’s also shown the value of meeting people in person. While the virtual events do work, there’s nothing like seeing an industry friend in person, catching up, and making live new connections.

SEMA News—December 2020

REQUIRED READING

By Juan Torres

SEMA News—December 2020

LEGISLATIVE AND TECHNICAL AFFAIRS

By Stuart Gosswein

2020: The Year in Review

Bonneville Salt Flats: The Utah Department of Natural Resources and U.S. Bureau of Land Management (BLM) signed an agreement to create the “Restore Bonneville” program and dramatically increase the amount of salt currently being pumped onto the historic landmark. Bonneville’s salt crust diminished over many decades after the BLM issued leases allowing salt to be transferred for potash mining. Salt thickness measurements are now in inches rather than feet. While mining adjacent to Bonneville historically contributed to the diminishment of the salt crust, it is also part of the restoration solution. Once potash is extracted from salt brine through a solar evaporation process, the remaining salt is a waste byproduct owned by the mine lease holder. The mine owner has been pumping salt since 1997, but infrastructure renovation and upgrades will increase the volume. As a result, the racing venue should gradually expand from its current 8-mi. length, with a goal of reaching the original 13-mi. length. SEMA, along with other organizations and companies comprising the Save the Salt Coalition, is working with state and federal officials to implement the 10-year program. The state of Utah and the BLM have allocated $2 million to start the program, and additional funds are being pursued for 2021.

The laws and regulations that govern how SEMA members do business have a continuous impact on the way automotive specialty-equipment products are made, distributed and marketed. The charge of the SEMA government affairs office is to stay on top of all relevant state and federal legislation and regulations and advocate for industry positions to ensure the best possible outcome for SEMA’s membership. The following are a few examples of critical legislative/regulatory issues addressed by the SEMA government affairs team over the past year.

FEDERAL UPDATE

COVID-19: Addressing COVID-19 as a nation and industry was the top challenge of 2020. The legislative agenda for most states and the federal government was significantly impacted as lawmakers turned their attention to pandemic relief measures. SEMA focused on providing members with valuable resources, including webinars and the creation of the www.sema.org/coronavirus webpage. The focus of attention included:

• Closures and Reopenings: SEMA compiled a database on how each state defines which businesses are “essential” and then worked with other organizations to define essential auto industry work activities within the U.S. Department of Homeland Security guidelines and those adopted by the states. The database then tracked state-by-state reopenings.
• Small-Business Loans: The U.S. Small Business Administration (SBA) administered the Paycheck Protection Program to provide small businesses with 1%-interest-rate loans for operation costs. The loans were potentially forgivable if at least 60% of the loan was used for payroll. Pending legislation supported by SEMA would require the SBA to create a simple one-page application form to automatically forgive qualifying loans up to $150,000. The SBA had a second program for granting an emergency coronavirus disaster loan of up to $2 million at 3.75% interest to be used for payroll, fixed debts, accounts payable and other bills, including a $10,000 forgivable grant.
• COVID-19 Liability Protection: SEMA continues to urge the U.S. Congress to pass targeted COVID-19 protection from the threat of frivolous liability lawsuits. The protection would be granted to businesses operating under applicable public health guidelines for the duration of the pandemic. Many states have enacted such legislation, but efforts to enact a national standard have stalled.
• Tax Credits: The Internal Revenue Service provided a variety of relief measures, from deferring tax filing deadlines to providing employer tax credits.
• Paid Sick and Family Leave: Lawmakers expanded federal laws covering paid sick and family leave policies to address health and stay-at-home challenges.
• OSHA and CDC Guidance: The Occupational Safety and Health Administration developed employer guidance for creating a safe workplace, and the Centers for Disease Control and Prevention issued comprehensive guidance on understanding the virus and mitigating exposure.

RPM Act: The Recognizing the Protection of Motorsports (RPM) Act is being considered by the U.S. Congress. The bill (H.R. 5434; S. 2602) clarifies that the Clean Air Act allows motor vehicles to be converted into dedicated race cars and that it is legal to produce, sell and install race parts for those vehicles. Passage of the RPM Act will protect sales beyond emissions-related parts, including racing tires, wheels, brakes, suspension equipment and rollcages, since customers won’t be installing those products if a car or motorcycle cannot be converted into a dedicated race vehicle. The bill has been subject to
previous Congressional hearings, and SEMA is working with lawmakers to approve the legislation in the current Congress. To contact your lawmakers, visit www.sema.org/rpm.

Collector Car Appreciation Day: The 11th annual Collector Car Appreciation Day (CCAD) took place on Friday, July 10, 2020. Both the U.S. Senate and the House of Representatives introduced resolutions (H.R. 998/S.R. 650) to focus attention on the vital role automotive restoration and collection plays in American society. Thousands of Americans gathered at car cruises, parades and virtual events to celebrate the nation’s automotive heritage. The day is also international in scope, as many Canadian provinces passed resolutions and hosted events. The next CCAD is set for July 9, 2021.

Tariffs: SEMA is working with several coalitions of industry associations to oppose the imposition of tariffs on a variety of worldwide products and materials. While SEMA supports the Trump administration’s efforts to create fair and reciprocal trade and to protect intellectual property rights, the association remains concerned that tariffs are not accomplishing that shared objective. SEMA has called for tariff relief during COVID-19. The first request was for a temporary suspension of tariff collections so that companies could preserve cash and pay other bills. The second request was for an extended deferral of collections. To date, both requests have been denied. The following is a summary of specific tariffs.

Steel/Aluminum: The U.S. government has imposed global tariffs on steel (25%) and aluminum (10%). Most of the tariffs began on June 1, 2018, with Argentina, Australia, Brazil and South Korea being exempted based on trade agreements. Mexico and Canada were exempted on May 20, 2019. The tariffs generally apply to processed raw materials (steel/aluminum plate, sheets, bars, etc.) but not finished products (e.g., wheels, exhaust systems, etc.). However, the U.S. government has imposed the tariffs on several product categories, including bumper stampings, for which it has documented a dramatic increase in the volume of imports that could be construed as circumventing the tariffs. U.S.-based companies are eligible for one-year tariff exclusions if they can demonstrate that the foreign-produced material is not made in the U.S. in reasonably available quantity or satisfactory quality. More than 200,000 company exclusion requests have been received to date.

Chinese Products: In July 2018, the United States began imposing tariffs on most imports from China. Tariffs on auto parts began in September 2018 at 10% and were raised to 25% in May 2019. In January 2020, the United States and China signed a phase-one trade deal whereby China will buy more U.S. goods and implement intellectual property enforcement measures and provisions to end the practice of pressuring foreign companies to transfer their technology to Chinese companies. The tariffs were thought to be bargaining chips that would be removed once a trade agreement had been negotiated. However, they remain as leverage to confirm China’s phase-one compliance and pursue a phase-two agreement to address the trade imbalance issues, cybertheft and Chinese subsidization of key industries. There is no timetable for reaching a phase-two agreement. Companies were able to seek tariff exclusions based on hardship and a lack of alternative product sourcing, but a majority of requests were denied, and all exclusions are scheduled to end on January 1, 2021.

Imported Autos/Auto Parts: In May 2018, President Trump directed the U.S. Department of Commerce to investigate whether to impose tariffs on imported automobiles and auto parts if it is found that they pose a threat to America’s national security (manufacturing base). The Department of Commerce report has not been released but is believed to note concerns about increases in the volume of automobile and auto part imports over the past three decades, along with barriers to sales of U.S. exports in foreign markets. A focus of concern is innovations in engine and powertrain technology, electrification, lighter-weight materials, advanced connectivity and autonomous driving. In response to threatened tariffs, SEMA and seven other major trade associations representing the broad scope of the auto industry formed the Driving American Jobs Coalition. The coalition opposes the tariffs as being counterproductive and threatening American companies, workers and consumers.

Replica Vehicle Law: A SEMA-supported law enacted in 2015 will allow small auto manufacturers to sell completed replica cars. Those vehicles resemble cars manufactured at least 25 years ago. Companies will be able to produce up to 325 turnkey replica vehicles (per company) in the United States and 5,000 worldwide under a simplified regulatory system. Until now, the federal government’s regulatory system did not differentiate between a company producing millions of vehicles and a business producing a few custom cars. In 2019, SEMA sued the National Highway Traffic Safety Administration (NHTSA) for failing to implement the program in 2016 as required under the law. The lawsuit helped spur the NHTSA to issue a proposed rule in January, and the industry is now awaiting issuance of a final rule that will allow car sales to commence. In 2019, the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) issued guidelines and regulations covering the engine packages to be installed in these replica vehicles.

Digital Millennium Copyright Act: SEMA filed a petition with the Copyright Office to renew an existing exemption allowing vehicle owners and service and repair shops to diagnose, repair or modify a vehicle without violating copyright protections. Congress passed the Digital Millennium Copyright Act in 1998 to ensure that copyright law extended to digital products and services. Congress also included a process for securing three-year exemptions that can be renewed indefinitely when a need to access copyrighted material can be demonstrated, such as accessing vehicle software to repair a vehicle or install aftermarket products.

Federal Enforcement Practices: SEMA submitted comments to the White House Office of Management and Budget (OMB) on ways to improve regulatory enforcement practices employed by the federal government. The comments included examples of excessive practices being employed by the U.S. EPA, such as unscheduled inspections, failure to inform company employees of the right to deny entry and consult with an attorney, overly broad investigations, and the threat of exorbitant fines as a negotiating strategy. SEMA recommended that the OMB issue guidelines requiring that government enforcement procedures take small business size into consideration.

“Made in USA” Regulation: The Federal Trade Commission (FTC) is proposing to issue a regulation to consolidate its longstanding policy to enforce unqualified “Made in USA” claims. For decades, the agency has used its general legal authority to enforce against unfair or deceptive trade practices regarding unqualified “Made in USA” claims. The FTC has issued broad guidance on the topic, most recently in 1997, but has not issued a formal regulation until now. The FTC is not pursuing any changes of substance to its policy, which requires a seller making an unqualified “Made in USA” claim to have a reasonable basis for asserting that “all or virtually all” of the product is made in the United States. Companies may still make qualified “Made in USA” claims for products that include U.S. content or processing but do not meet the criteria for making an unqualified claim. Qualified claim examples include “Made in USA of U.S. and Imported Parts,” “75% U.S. Content,” and “Assembled in USA.”

Tire Dumping Petitions: The United Steelworkers union has filed petitions alleging that certain light-truck and passenger-vehicle tires from Southeast Asia are being dumped or are benefitting from unfair government subsidies. The petitions cite dumping margins as high as 195% for Korea, 147% for Taiwan, 217% for Thailand and 33% for Vietnam. The U.S. International Trade Commission must confirm that there is harm or threatened harm to U.S. industry before duties can be imposed.

NAFTA/USMCA: The United States-Mexico-Canada Agreement (USMCA) to replace the North American Free Trade Agreement (NAFTA) was ratified and implemented by the three countries. Major provisions include a requirement that vehicles have at least 75% North American content, compared with 62.5% currently. At least 40%–45% of the vehicle content must be made by workers earning at least $16 an hour, which will lead to higher wages in Mexico.

Maintenance Backlog on Federal Lands: The SEMA-supported Great American Outdoors Act (GAOA) was signed into law in August. The GAOA will dedicate $9.5 billion over the next five years to address the maintenance backlog on federal lands by creating a national parks and public land legacy restoration fund, enabling the National Park Service, the U.S. Forest Service and several other federal agencies to rebuild and improve trails, roads, docks, campgrounds and more. The bill will also appropriate $900 million annually to the Land and Water Conservation Fund for projects that help to protect natural areas, water resources, cultural heritage sites, and to provide recreation opportunities. The GAOA will benefit many SEMA members in the off-road market, in addition to companies selling wheels/tires, suspension, power and other equipment to help tow RVs and boats to the nation’s parks and recreation areas.

West Virginia—Military Vehicles: West Virginia Governor Jim Justice signed into law a SEMA-supported bill to allow antique military vehicles to display an alternate registration insignia, as opposed to a traditional license plate. Antique vehicle plates are available for vehicles that are more than 25 years old and owned solely as collectors’ items.

STATE UPDATE

Collector Car Appreciation Day: The states of Louisiana, South Dakota, West Virginia and Wisconsin, along with the Canadian provinces of Alberta, British Columbia, Newfoundland and Labrador, New Brunswick, and Nova Scotia, passed SEMA-requested resolutions locally recognizing Collector Car Appreciation Day.

COVID-19 Liability Protection: Georgia, Louisiana, Kansas, Mississippi, Nevada, North Carolina, Ohio, Oklahoma, Tennessee, Utah and Wyoming each enacted SEMA-supported laws to provide businesses that follow public health guidance protection from unreasonable lawsuits related to the COVID-19 pandemic.

California—Electric Vehicles: California Governor Gavin Newsom issued a controversial Executive Order in September instructing the California Air Resources Board to draft regulations requiring that all new cars and passenger trucks sold in the state be zero-emissions by 2035. Once drafted, CARB’s proposed regulations will be subject to a lengthy regulatory process, including legal, economic and environmental analyses, public comment, and hearings. According to the California Energy Commission, zero-emission vehicles (ZEVs) currently make up approximately 2% of the more than 28 million vehicles in use in the Golden State. It is estimated that at least 8% of new-vehicle sales in California will be ZEVs and plug-in hybrids by 2025. SEMA opposes the governor’s order, which is expected to face numerous legal challenges. California’s ZEV program falls within the state’s greenhouse gas rule, which is being challenged in court by the Trump administration. The federal government is seeking to withdraw EPA recognition of the California rule under the Clean Air Act because it effectively establishes fuel economy standards that are the sole jurisdiction of the federal government. The challenge could eventually be decided by the Supreme Court.

Maryland—Historic Vehicles: The Maryland House of Delegates withdrew SEMA-opposed legislation that would have imposed an emissions inspection requirement on historic vehicles less than 40 years old. All historic vehicles are currently exempt. In Maryland, a historic vehicle is defined as being 20 years old or older and not substantially altered from the manufacturer’s original design.

Virginia—Motorsports: SEMA-supported legislation in Virginia to create a motor vehicle racing heritage trail in order to promote tourism and economic development became law after the deadline for Governor Ralph Northam’s signature or veto passed. The law convenes a group of stakeholders, including owners of historic NASCAR and other racing tracks, to design and implement the trail.

New Jersey—Vehicle Warranties: New Jersey Governor Phil Murphy signed into law SEMA-supported legislation to require new-car dealers to provide purchasers written notice that it is illegal for manufacturers or dealers to void a warranty or deny coverage because aftermarket or recycled parts were installed or because someone other than the dealer performed service.

Ohio—License Plates: SEMA-supported legislation from 2019 allowing the display of only a single, rear-mounted license plate went into effect on July 1, 2020. The state previously required both a front and a rear plate. This new law is expected to save the state between $1.2 and $1.4 million
per year.

Oklahoma—License Plates: The Oklahoma House of Representatives failed to pass SEMA-opposed legislation that would have required front and rear license plates on all vehicles. Vehicles are currently required to display only a single, rear-mounted license plate.

Washington—Vehicle Registration: SEMA-opposed legislation that would have significantly restricted eligibility of collector vehicles and horseless carriages failed to pass when the legislature adjourned for the year. Under existing law, a collector vehicle must be at least 30 years old, while a horseless carriage must be at least 40 years old. If passed, collector vehicles would have been required to be at least 40 years old, while horseless carriages would have been defined as being manufactured prior to 1916. The bill would also have restricted the issuance of year-of-manufacture plates and considerably increased registration fees.

Wisconsin—Collector and Hobbyist Vehicles: SEMA-opposed legislation in Wisconsin to restrict eligibility and raise fees for collector and hobbyist vehicle registrations failed to pass the Assembly. Currently, these vehicles must be more than 20 years old and are required to pay twice the registration fee as the type of vehicle being registered. If passed, the bill would have further limited each designation to vehicles 30 years old and older, expanded seasonal use restrictions, and increased the registration fees to three times the normal rate. In Wisconsin, a collector vehicle is defined as being at least 20 years old, preserved because of historical significance, and having had no body alterations. Vehicles eligible for hobbyist plates include street modifieds, replica vehicles, reconstructed vehicles and homemade vehicles.

SEMA News—December 2020

LEGISLATIVE AND TECHNICAL AFFAIRS

By Stuart Gosswein

2020: The Year in Review

Bonneville Salt Flats: The Utah Department of Natural Resources and U.S. Bureau of Land Management (BLM) signed an agreement to create the “Restore Bonneville” program and dramatically increase the amount of salt currently being pumped onto the historic landmark. Bonneville’s salt crust diminished over many decades after the BLM issued leases allowing salt to be transferred for potash mining. Salt thickness measurements are now in inches rather than feet. While mining adjacent to Bonneville historically contributed to the diminishment of the salt crust, it is also part of the restoration solution. Once potash is extracted from salt brine through a solar evaporation process, the remaining salt is a waste byproduct owned by the mine lease holder. The mine owner has been pumping salt since 1997, but infrastructure renovation and upgrades will increase the volume. As a result, the racing venue should gradually expand from its current 8-mi. length, with a goal of reaching the original 13-mi. length. SEMA, along with other organizations and companies comprising the Save the Salt Coalition, is working with state and federal officials to implement the 10-year program. The state of Utah and the BLM have allocated $2 million to start the program, and additional funds are being pursued for 2021.

The laws and regulations that govern how SEMA members do business have a continuous impact on the way automotive specialty-equipment products are made, distributed and marketed. The charge of the SEMA government affairs office is to stay on top of all relevant state and federal legislation and regulations and advocate for industry positions to ensure the best possible outcome for SEMA’s membership. The following are a few examples of critical legislative/regulatory issues addressed by the SEMA government affairs team over the past year.

FEDERAL UPDATE

COVID-19: Addressing COVID-19 as a nation and industry was the top challenge of 2020. The legislative agenda for most states and the federal government was significantly impacted as lawmakers turned their attention to pandemic relief measures. SEMA focused on providing members with valuable resources, including webinars and the creation of the www.sema.org/coronavirus webpage. The focus of attention included:

• Closures and Reopenings: SEMA compiled a database on how each state defines which businesses are “essential” and then worked with other organizations to define essential auto industry work activities within the U.S. Department of Homeland Security guidelines and those adopted by the states. The database then tracked state-by-state reopenings.
• Small-Business Loans: The U.S. Small Business Administration (SBA) administered the Paycheck Protection Program to provide small businesses with 1%-interest-rate loans for operation costs. The loans were potentially forgivable if at least 60% of the loan was used for payroll. Pending legislation supported by SEMA would require the SBA to create a simple one-page application form to automatically forgive qualifying loans up to $150,000. The SBA had a second program for granting an emergency coronavirus disaster loan of up to $2 million at 3.75% interest to be used for payroll, fixed debts, accounts payable and other bills, including a $10,000 forgivable grant.
• COVID-19 Liability Protection: SEMA continues to urge the U.S. Congress to pass targeted COVID-19 protection from the threat of frivolous liability lawsuits. The protection would be granted to businesses operating under applicable public health guidelines for the duration of the pandemic. Many states have enacted such legislation, but efforts to enact a national standard have stalled.
• Tax Credits: The Internal Revenue Service provided a variety of relief measures, from deferring tax filing deadlines to providing employer tax credits.
• Paid Sick and Family Leave: Lawmakers expanded federal laws covering paid sick and family leave policies to address health and stay-at-home challenges.
• OSHA and CDC Guidance: The Occupational Safety and Health Administration developed employer guidance for creating a safe workplace, and the Centers for Disease Control and Prevention issued comprehensive guidance on understanding the virus and mitigating exposure.

RPM Act: The Recognizing the Protection of Motorsports (RPM) Act is being considered by the U.S. Congress. The bill (H.R. 5434; S. 2602) clarifies that the Clean Air Act allows motor vehicles to be converted into dedicated race cars and that it is legal to produce, sell and install race parts for those vehicles. Passage of the RPM Act will protect sales beyond emissions-related parts, including racing tires, wheels, brakes, suspension equipment and rollcages, since customers won’t be installing those products if a car or motorcycle cannot be converted into a dedicated race vehicle. The bill has been subject to
previous Congressional hearings, and SEMA is working with lawmakers to approve the legislation in the current Congress. To contact your lawmakers, visit www.sema.org/rpm.

Collector Car Appreciation Day: The 11th annual Collector Car Appreciation Day (CCAD) took place on Friday, July 10, 2020. Both the U.S. Senate and the House of Representatives introduced resolutions (H.R. 998/S.R. 650) to focus attention on the vital role automotive restoration and collection plays in American society. Thousands of Americans gathered at car cruises, parades and virtual events to celebrate the nation’s automotive heritage. The day is also international in scope, as many Canadian provinces passed resolutions and hosted events. The next CCAD is set for July 9, 2021.

Tariffs: SEMA is working with several coalitions of industry associations to oppose the imposition of tariffs on a variety of worldwide products and materials. While SEMA supports the Trump administration’s efforts to create fair and reciprocal trade and to protect intellectual property rights, the association remains concerned that tariffs are not accomplishing that shared objective. SEMA has called for tariff relief during COVID-19. The first request was for a temporary suspension of tariff collections so that companies could preserve cash and pay other bills. The second request was for an extended deferral of collections. To date, both requests have been denied. The following is a summary of specific tariffs.

Steel/Aluminum: The U.S. government has imposed global tariffs on steel (25%) and aluminum (10%). Most of the tariffs began on June 1, 2018, with Argentina, Australia, Brazil and South Korea being exempted based on trade agreements. Mexico and Canada were exempted on May 20, 2019. The tariffs generally apply to processed raw materials (steel/aluminum plate, sheets, bars, etc.) but not finished products (e.g., wheels, exhaust systems, etc.). However, the U.S. government has imposed the tariffs on several product categories, including bumper stampings, for which it has documented a dramatic increase in the volume of imports that could be construed as circumventing the tariffs. U.S.-based companies are eligible for one-year tariff exclusions if they can demonstrate that the foreign-produced material is not made in the U.S. in reasonably available quantity or satisfactory quality. More than 200,000 company exclusion requests have been received to date.

Chinese Products: In July 2018, the United States began imposing tariffs on most imports from China. Tariffs on auto parts began in September 2018 at 10% and were raised to 25% in May 2019. In January 2020, the United States and China signed a phase-one trade deal whereby China will buy more U.S. goods and implement intellectual property enforcement measures and provisions to end the practice of pressuring foreign companies to transfer their technology to Chinese companies. The tariffs were thought to be bargaining chips that would be removed once a trade agreement had been negotiated. However, they remain as leverage to confirm China’s phase-one compliance and pursue a phase-two agreement to address the trade imbalance issues, cybertheft and Chinese subsidization of key industries. There is no timetable for reaching a phase-two agreement. Companies were able to seek tariff exclusions based on hardship and a lack of alternative product sourcing, but a majority of requests were denied, and all exclusions are scheduled to end on January 1, 2021.

Imported Autos/Auto Parts: In May 2018, President Trump directed the U.S. Department of Commerce to investigate whether to impose tariffs on imported automobiles and auto parts if it is found that they pose a threat to America’s national security (manufacturing base). The Department of Commerce report has not been released but is believed to note concerns about increases in the volume of automobile and auto part imports over the past three decades, along with barriers to sales of U.S. exports in foreign markets. A focus of concern is innovations in engine and powertrain technology, electrification, lighter-weight materials, advanced connectivity and autonomous driving. In response to threatened tariffs, SEMA and seven other major trade associations representing the broad scope of the auto industry formed the Driving American Jobs Coalition. The coalition opposes the tariffs as being counterproductive and threatening American companies, workers and consumers.

Replica Vehicle Law: A SEMA-supported law enacted in 2015 will allow small auto manufacturers to sell completed replica cars. Those vehicles resemble cars manufactured at least 25 years ago. Companies will be able to produce up to 325 turnkey replica vehicles (per company) in the United States and 5,000 worldwide under a simplified regulatory system. Until now, the federal government’s regulatory system did not differentiate between a company producing millions of vehicles and a business producing a few custom cars. In 2019, SEMA sued the National Highway Traffic Safety Administration (NHTSA) for failing to implement the program in 2016 as required under the law. The lawsuit helped spur the NHTSA to issue a proposed rule in January, and the industry is now awaiting issuance of a final rule that will allow car sales to commence. In 2019, the U.S. Environmental Protection Agency (EPA) and the California Air Resources Board (CARB) issued guidelines and regulations covering the engine packages to be installed in these replica vehicles.

Digital Millennium Copyright Act: SEMA filed a petition with the Copyright Office to renew an existing exemption allowing vehicle owners and service and repair shops to diagnose, repair or modify a vehicle without violating copyright protections. Congress passed the Digital Millennium Copyright Act in 1998 to ensure that copyright law extended to digital products and services. Congress also included a process for securing three-year exemptions that can be renewed indefinitely when a need to access copyrighted material can be demonstrated, such as accessing vehicle software to repair a vehicle or install aftermarket products.

Federal Enforcement Practices: SEMA submitted comments to the White House Office of Management and Budget (OMB) on ways to improve regulatory enforcement practices employed by the federal government. The comments included examples of excessive practices being employed by the U.S. EPA, such as unscheduled inspections, failure to inform company employees of the right to deny entry and consult with an attorney, overly broad investigations, and the threat of exorbitant fines as a negotiating strategy. SEMA recommended that the OMB issue guidelines requiring that government enforcement procedures take small business size into consideration.

“Made in USA” Regulation: The Federal Trade Commission (FTC) is proposing to issue a regulation to consolidate its longstanding policy to enforce unqualified “Made in USA” claims. For decades, the agency has used its general legal authority to enforce against unfair or deceptive trade practices regarding unqualified “Made in USA” claims. The FTC has issued broad guidance on the topic, most recently in 1997, but has not issued a formal regulation until now. The FTC is not pursuing any changes of substance to its policy, which requires a seller making an unqualified “Made in USA” claim to have a reasonable basis for asserting that “all or virtually all” of the product is made in the United States. Companies may still make qualified “Made in USA” claims for products that include U.S. content or processing but do not meet the criteria for making an unqualified claim. Qualified claim examples include “Made in USA of U.S. and Imported Parts,” “75% U.S. Content,” and “Assembled in USA.”

Tire Dumping Petitions: The United Steelworkers union has filed petitions alleging that certain light-truck and passenger-vehicle tires from Southeast Asia are being dumped or are benefitting from unfair government subsidies. The petitions cite dumping margins as high as 195% for Korea, 147% for Taiwan, 217% for Thailand and 33% for Vietnam. The U.S. International Trade Commission must confirm that there is harm or threatened harm to U.S. industry before duties can be imposed.

NAFTA/USMCA: The United States-Mexico-Canada Agreement (USMCA) to replace the North American Free Trade Agreement (NAFTA) was ratified and implemented by the three countries. Major provisions include a requirement that vehicles have at least 75% North American content, compared with 62.5% currently. At least 40%–45% of the vehicle content must be made by workers earning at least $16 an hour, which will lead to higher wages in Mexico.

Maintenance Backlog on Federal Lands: The SEMA-supported Great American Outdoors Act (GAOA) was signed into law in August. The GAOA will dedicate $9.5 billion over the next five years to address the maintenance backlog on federal lands by creating a national parks and public land legacy restoration fund, enabling the National Park Service, the U.S. Forest Service and several other federal agencies to rebuild and improve trails, roads, docks, campgrounds and more. The bill will also appropriate $900 million annually to the Land and Water Conservation Fund for projects that help to protect natural areas, water resources, cultural heritage sites, and to provide recreation opportunities. The GAOA will benefit many SEMA members in the off-road market, in addition to companies selling wheels/tires, suspension, power and other equipment to help tow RVs and boats to the nation’s parks and recreation areas.

West Virginia—Military Vehicles: West Virginia Governor Jim Justice signed into law a SEMA-supported bill to allow antique military vehicles to display an alternate registration insignia, as opposed to a traditional license plate. Antique vehicle plates are available for vehicles that are more than 25 years old and owned solely as collectors’ items.

STATE UPDATE

Collector Car Appreciation Day: The states of Louisiana, South Dakota, West Virginia and Wisconsin, along with the Canadian provinces of Alberta, British Columbia, Newfoundland and Labrador, New Brunswick, and Nova Scotia, passed SEMA-requested resolutions locally recognizing Collector Car Appreciation Day.

COVID-19 Liability Protection: Georgia, Louisiana, Kansas, Mississippi, Nevada, North Carolina, Ohio, Oklahoma, Tennessee, Utah and Wyoming each enacted SEMA-supported laws to provide businesses that follow public health guidance protection from unreasonable lawsuits related to the COVID-19 pandemic.

California—Electric Vehicles: California Governor Gavin Newsom issued a controversial Executive Order in September instructing the California Air Resources Board to draft regulations requiring that all new cars and passenger trucks sold in the state be zero-emissions by 2035. Once drafted, CARB’s proposed regulations will be subject to a lengthy regulatory process, including legal, economic and environmental analyses, public comment, and hearings. According to the California Energy Commission, zero-emission vehicles (ZEVs) currently make up approximately 2% of the more than 28 million vehicles in use in the Golden State. It is estimated that at least 8% of new-vehicle sales in California will be ZEVs and plug-in hybrids by 2025. SEMA opposes the governor’s order, which is expected to face numerous legal challenges. California’s ZEV program falls within the state’s greenhouse gas rule, which is being challenged in court by the Trump administration. The federal government is seeking to withdraw EPA recognition of the California rule under the Clean Air Act because it effectively establishes fuel economy standards that are the sole jurisdiction of the federal government. The challenge could eventually be decided by the Supreme Court.

Maryland—Historic Vehicles: The Maryland House of Delegates withdrew SEMA-opposed legislation that would have imposed an emissions inspection requirement on historic vehicles less than 40 years old. All historic vehicles are currently exempt. In Maryland, a historic vehicle is defined as being 20 years old or older and not substantially altered from the manufacturer’s original design.

Virginia—Motorsports: SEMA-supported legislation in Virginia to create a motor vehicle racing heritage trail in order to promote tourism and economic development became law after the deadline for Governor Ralph Northam’s signature or veto passed. The law convenes a group of stakeholders, including owners of historic NASCAR and other racing tracks, to design and implement the trail.

New Jersey—Vehicle Warranties: New Jersey Governor Phil Murphy signed into law SEMA-supported legislation to require new-car dealers to provide purchasers written notice that it is illegal for manufacturers or dealers to void a warranty or deny coverage because aftermarket or recycled parts were installed or because someone other than the dealer performed service.

Ohio—License Plates: SEMA-supported legislation from 2019 allowing the display of only a single, rear-mounted license plate went into effect on July 1, 2020. The state previously required both a front and a rear plate. This new law is expected to save the state between $1.2 and $1.4 million
per year.

Oklahoma—License Plates: The Oklahoma House of Representatives failed to pass SEMA-opposed legislation that would have required front and rear license plates on all vehicles. Vehicles are currently required to display only a single, rear-mounted license plate.

Washington—Vehicle Registration: SEMA-opposed legislation that would have significantly restricted eligibility of collector vehicles and horseless carriages failed to pass when the legislature adjourned for the year. Under existing law, a collector vehicle must be at least 30 years old, while a horseless carriage must be at least 40 years old. If passed, collector vehicles would have been required to be at least 40 years old, while horseless carriages would have been defined as being manufactured prior to 1916. The bill would also have restricted the issuance of year-of-manufacture plates and considerably increased registration fees.

Wisconsin—Collector and Hobbyist Vehicles: SEMA-opposed legislation in Wisconsin to restrict eligibility and raise fees for collector and hobbyist vehicle registrations failed to pass the Assembly. Currently, these vehicles must be more than 20 years old and are required to pay twice the registration fee as the type of vehicle being registered. If passed, the bill would have further limited each designation to vehicles 30 years old and older, expanded seasonal use restrictions, and increased the registration fees to three times the normal rate. In Wisconsin, a collector vehicle is defined as being at least 20 years old, preserved because of historical significance, and having had no body alterations. Vehicles eligible for hobbyist plates include street modifieds, replica vehicles, reconstructed vehicles and homemade vehicles.