SEMA News - June 2009
Industry News

Registration for the 2009 SEMA Show is open and available at www.SEMAShow.com.

Registration for the 2009 SEMA Show set for Tuesday through Friday, November 3–6, is open and available online. Register now. 

Show attendees will enjoy a dedicated New Products Showcase area, a sectionalized floorplan, personalized matchmaking programs and electronic scanning devices that deliver product details by e-mail.

The 2009 SEMA Show also features two entirely new sections: Powersports & Utility Vehicles and Paint, Body & Equipment. Located in the South Hall, the Powersports & Utility Vehicles section will feature manufacturers of power-driven equipment—from motorcycles and ATVs to pocket bikes and specialty golf carts. The new Paint, Body & Equipment area, located in North Hall adjoining the Tools & Equipment section, will feature paint booths, frame machines, spray guns, filtration and breathing apparatuses and more. Complete information on the 2009 SEMA Show is available at SEMAShow.com.

Your Chance to Shape the Industry—Vote for the SEMA Board of Directors

Ballots for the SEMA Board of Directors election were sent to the primary contacts at SEMA-member companies within the corresponding categories on Friday, May 29, 2009, and are due back by Monday, June 22, 2009. Photos and backgrounds of all of the candidates will be posted on www.sema.org under the “leadership” tab.

The SEMA Board is comprised of a group of volunteers with the knowledge and expertise to help guide the association’s direction by confronting the industry’s challenges and highlighting its opportunities for the betterment of the entire membership.

The candidates for 2009 are:

Chair-Elect Category
Paul “Scooter” Brothers, Comp Cams
Gene Ezzell, Ezzell Performance Consulting

Manufacturers’ Category
Doug Evans, Source Interlink Media (Incumbent)
Mike Spagnola, Street Scene Equipment (Incumbent)
David Stutts, Hot Rod Air Inc. (Incumbent)
Jeep Worthan, Auto Meter (Incumbent)
Joel Ayres, Leer
Wen Chang, Topline Wheels
Laurel Dasher, Superchips
Myles Kovacs, DUB Industries
Ernie Silvers, Egge Machine Co. Inc.
Steve Wolcott, Pro Media

Distributor/Retailer Category
Donnie Eatherly, P&E Distributors Inc. (Incumbent)
Tony Napoli, American Speed Center (Incumbent)
Mark Toebben, Direct Communications Inc. (Incumbent)
Van Woodell, Weathers Auto Supply (Incumbent)
Zan Martin, Martin & Company Advertising
Joseph Risch, Whitney Automotive Group

Manufacturers’ Rep Category
Bryan Foster, Foster Babcock
Jeff Bates, Bob Cook Sales
Bernie Meyer, KAM Marketing

Top 10 New Street Rod/Custom Car Products

SEMA used a new digital tracking method for the 2008 SEMA Show New Products Showcase, allowing buyers to scan product barcodes with a key fob and receive product details via printout or e-mail. There were nearly 100 products entered in the Best New Street Rod/Custom Car Product category. The following are the top 10. See all of the products entered in the New Products Showcase at www.semadigital.com.

		Air Ride Technologies ShockWave v3.5 www.ridetech.com, 812/481-4787
		Auto Meter American Muscle Gauge Series www.autometer.com, 866/248-6356
		Classic Performance Products Brembo Big Brake System for GM Muscle www.classicperform.com, 714/522-2000
		Mattson’s Radiator/The Fan Man Side Winder Fan www.mattsonsradiator.com, 800/814-4238
		Morrison Motorsport -71 Flat Billet SuperCharger Tophat www.morrisonmotorsport.com
		Energy Suspension LS1 to Small-Block Chevy Chassis Complete Engine Mount Set www.energysuspension.com, 949/361-3935
		Rodtana Design Rodtana GT www.rodtana.com, 877/4-RODTANA
		Air Ride Technologies AirCan ShockWave Cover www.ridetech.com, 812/481-4787
		Classic Performance Products ’60–’87 Chevrolet C10 Truck Modular 13-Inch SOS www.classicperform.com, 714/522-2000
		Aicona Wheels TiRM www.aiconawheels.com, 877/6-AICONA

FAST FACTS

Heidts Hot Rod & Muscle Car Parts named John Sonnefeldt its director of sales and marketing. Sonnefeldt has more than 15 years of experience in the automotive performance aftermarket, with extensive knowledge of drag racing, road racing, NASCAR, restoration and the car-building community. Heidts,  Wauconda, IL; 800/841-8188			2NGK Spark Plugs (USA) Inc., a subsidiary of NGK Spark Plug Co. Ltd., promoted Robert Pepper to vice president of manufacturing. Pepper has been with NGK since 2007, previously as director of manufacturing administration. He is responsible for all North American manufacturing and OEM/OES distribution, with locations in Irvine, California, and Sissonville, West Virginia. NGK Spark Plugs (USA) Inc., Wixom, MI; 248/926-6900.

		Detroit Speed & Engineering Inc.’s co-owner Kyle Tucker drove the Detroit Speed ’70 Camaro Test Car to a first-place finish during the Vendor Street Challenge Autocross at the Meguiar’s Orange County Get Together in Costa Mesa, California. Tucker posted a 29.1 during his final run, which was good enough to grab first place. Detroit Speed & Engineering, Mooresville, NC; 704/662-3272.
		Penray announced that Larry Collet has joined the automotive division’s sales team as a regional sales manager. Collet is responsible for sales with current customers and helping to build and establish relationships with future customers. Prior to Penray, Collet spent 23 years with the ITW Performance Polymers Division of the Permatex chemical company.
		A group of 13 Ohio Technical College students enrolled in the   college’s alternative fuel program recently developed an all-electric-powered vehicle dubbed the Electro-Van. The fully functional ’97 Ford E350 runs solely on electricity and can reach speeds of up to 35 mph with a two-hour drive-time capacity. The van uses 21 batteries for power—solar panels have been added for recharging the batteries—and an electric motor that delivers up to 95 hp. Ohio Technical College, Cleveland, OH; 800/322-7000.
		Continental Tire North America (CTNA) opened its new $11 million, 75,000-sq.-ft. North American headquarters in northern Lancaster County, South Carolina. CTNA’s CEO Matthias Schoenberg kicked off a special opening ceremony with a ribbon cutting and news conference. The facility currently employs 375 people with the opportunity to expand. CTNA, Charlotte, NC; 704/583-3900.
		Ted Steven’s ’40 Mercury Coupe was awarded the 2009 Goodguys West Coast Custom of the Year at the 27th All American Get-Together in Pleasanton. Steven’s Merc was recently restored and freshened by Roy Brizio Street Rods in South San Francisco. In addition, Marvin Bok’s ’39 Ford convertible captured the Goodguys 2009 Street Rod d’Elegance award at the 9th Del Mar Nationals in April. Prior to sweeping the d’Elegance title in Del Mar, it was selected by Chip Foose for the Chip Foose Design of Excellence Award at the Grand National Roadster Show. Goodguys Rod & Custom Association, Pleasanton, CA; 925/838-9876.
		Eaton Automotive, a division of Eaton Corp., announced that Jeff Saxton was moved to sales engineer for its automotive aftermarket performance products group. Saxton’s responsibilities include technician training and rep group management. He has been with Eaton since 1991. Eaton Corp., Eden Prairie, MN; 952/937-9800.
		ACI (Agri-Cover Inc.) hired Britta Dahl in its marketing department as graphic designer. Dahl will oversee the company’s creative materials for print and online advertisements and literature. ACI, Jamestown, ND; 866/414-5422.

SoffSeal Inc. promoted both Sandy Fox and Christopher Sondles to executive vice president. Fox and Sondles were mentored by the late Gary Anderson, SoffSeal’s founder and former president. Fox will oversee the company’s operations and finance, and Sondles will oversee product development, sales and marketing. SoffSeal Inc., Harrison, OH; 800/426-0902.

Azentek LLC announced that u-blox, a Swiss provider of GPS technology, will provide GPS receiver modules to the company. The modules provide navigation and location awareness in Azentek’s Atlas in-car personal computers and its SmartMirror device. Azentek, Grand Blanc, MI; 810/694-4500.

Toyo Tire U.S.A. Corp. launched an all-new website, www.toyotires.com. The company’s goal with the complete site redesign, which includes a new web address, was to create a user-friendly resources tool for consumers and dealers. Toyo Tire, Cypress, CA; 714/236-2080.

Mota hired two automotive veterans to key positions within the company. Charlie Vogelheim, previously vice president of automotive development at JD Power & Associates, was named chief trust and transparency officer, and Steven J. McAuley, former CEO of GE Capital Fleet Services in the United Kingdom and vice president at Penske Auto Group, was named chief automotive officer.

Jim Wrobleski & Co. Inc. hired Tara Landry to handle data entry and general office duties, including managing office tasks, filing customer data sheets and working with the company’s manufacturers’ rep software. Jim Wrobleski & Co. Inc., Michigan City, IN; 219/879-8145.

Infineon Raceway has established the Little Racers Club, which is dedicated to the raceway’s youngest fans. For a one-time membership fee of $15, fans ages 12 and under will receive an official membership card, a backpack with Infineon Raceway and Little Racer’s Club logos and other benefits, including free tickets to certain raceway events. Infineon Raceway, Sonoma, CA; 707/938-8448.

Ann Durham was promoted to president of Global Vehicles U.S.A. Inc., the distributor of vehicles produced by India’s Mahindra & Mahindra. Durham joined the company in January 2008 as vice president, finance and administration and was promoted late last year to senior vice president, general manager. Alpharetta, GA; 770/753-4441.

The CarDomain Network acquired StreetFire.net, an automotive file-sharing website. The combined company will continue to invest in product improvements to both CarDomain.com and StreetFire.net. Glenn Rogers, previously CEO of StreetFire, will run the combined company as CEO. CarDomain Network Inc., Seattle, WA; 206/926-2100. Streetfire.net, Los Angeles, CA; 310/882-2086.

Barry Grant Inc. appointed Bobby Writeman to the company’s technical department. Writeman’s industry experience includes 32 years as an oval track sports manager for Holley Carburetors. Barry Grant Inc., Dahlonega, GA; 706/864-8544.

The Tire Industry Association (TIA) has teamed with Bridgestone America’s business units, Bridgestone Americas Tire Operations and Bridgestone Retail Operations LLC, to create a seven-minute reference video for consumers. The video, available at www.tireindustry.org, covers tire sizing, tire-replacement guidelines, proper tire rotation and more. TIA, Bowie, MD; 301/430-7280.

SEMA News - June 2009
Industry News

Registration for the 2009 SEMA Show is open and available at www.SEMAShow.com.

Registration for the 2009 SEMA Show set for Tuesday through Friday, November 3–6, is open and available online. Register now. 

Show attendees will enjoy a dedicated New Products Showcase area, a sectionalized floorplan, personalized matchmaking programs and electronic scanning devices that deliver product details by e-mail.

The 2009 SEMA Show also features two entirely new sections: Powersports & Utility Vehicles and Paint, Body & Equipment. Located in the South Hall, the Powersports & Utility Vehicles section will feature manufacturers of power-driven equipment—from motorcycles and ATVs to pocket bikes and specialty golf carts. The new Paint, Body & Equipment area, located in North Hall adjoining the Tools & Equipment section, will feature paint booths, frame machines, spray guns, filtration and breathing apparatuses and more. Complete information on the 2009 SEMA Show is available at SEMAShow.com.

Your Chance to Shape the Industry—Vote for the SEMA Board of Directors

Ballots for the SEMA Board of Directors election were sent to the primary contacts at SEMA-member companies within the corresponding categories on Friday, May 29, 2009, and are due back by Monday, June 22, 2009. Photos and backgrounds of all of the candidates will be posted on www.sema.org under the “leadership” tab.

The SEMA Board is comprised of a group of volunteers with the knowledge and expertise to help guide the association’s direction by confronting the industry’s challenges and highlighting its opportunities for the betterment of the entire membership.

The candidates for 2009 are:

Chair-Elect Category
Paul “Scooter” Brothers, Comp Cams
Gene Ezzell, Ezzell Performance Consulting

Manufacturers’ Category
Doug Evans, Source Interlink Media (Incumbent)
Mike Spagnola, Street Scene Equipment (Incumbent)
David Stutts, Hot Rod Air Inc. (Incumbent)
Jeep Worthan, Auto Meter (Incumbent)
Joel Ayres, Leer
Wen Chang, Topline Wheels
Laurel Dasher, Superchips
Myles Kovacs, DUB Industries
Ernie Silvers, Egge Machine Co. Inc.
Steve Wolcott, Pro Media

Distributor/Retailer Category
Donnie Eatherly, P&E Distributors Inc. (Incumbent)
Tony Napoli, American Speed Center (Incumbent)
Mark Toebben, Direct Communications Inc. (Incumbent)
Van Woodell, Weathers Auto Supply (Incumbent)
Zan Martin, Martin & Company Advertising
Joseph Risch, Whitney Automotive Group

Manufacturers’ Rep Category
Bryan Foster, Foster Babcock
Jeff Bates, Bob Cook Sales
Bernie Meyer, KAM Marketing

Top 10 New Street Rod/Custom Car Products

SEMA used a new digital tracking method for the 2008 SEMA Show New Products Showcase, allowing buyers to scan product barcodes with a key fob and receive product details via printout or e-mail. There were nearly 100 products entered in the Best New Street Rod/Custom Car Product category. The following are the top 10. See all of the products entered in the New Products Showcase at www.semadigital.com.

		Air Ride Technologies ShockWave v3.5 www.ridetech.com, 812/481-4787
		Auto Meter American Muscle Gauge Series www.autometer.com, 866/248-6356
		Classic Performance Products Brembo Big Brake System for GM Muscle www.classicperform.com, 714/522-2000
		Mattson’s Radiator/The Fan Man Side Winder Fan www.mattsonsradiator.com, 800/814-4238
		Morrison Motorsport -71 Flat Billet SuperCharger Tophat www.morrisonmotorsport.com
		Energy Suspension LS1 to Small-Block Chevy Chassis Complete Engine Mount Set www.energysuspension.com, 949/361-3935
		Rodtana Design Rodtana GT www.rodtana.com, 877/4-RODTANA
		Air Ride Technologies AirCan ShockWave Cover www.ridetech.com, 812/481-4787
		Classic Performance Products ’60–’87 Chevrolet C10 Truck Modular 13-Inch SOS www.classicperform.com, 714/522-2000
		Aicona Wheels TiRM www.aiconawheels.com, 877/6-AICONA

FAST FACTS

Heidts Hot Rod & Muscle Car Parts named John Sonnefeldt its director of sales and marketing. Sonnefeldt has more than 15 years of experience in the automotive performance aftermarket, with extensive knowledge of drag racing, road racing, NASCAR, restoration and the car-building community. Heidts,  Wauconda, IL; 800/841-8188			2NGK Spark Plugs (USA) Inc., a subsidiary of NGK Spark Plug Co. Ltd., promoted Robert Pepper to vice president of manufacturing. Pepper has been with NGK since 2007, previously as director of manufacturing administration. He is responsible for all North American manufacturing and OEM/OES distribution, with locations in Irvine, California, and Sissonville, West Virginia. NGK Spark Plugs (USA) Inc., Wixom, MI; 248/926-6900.

		Detroit Speed & Engineering Inc.’s co-owner Kyle Tucker drove the Detroit Speed ’70 Camaro Test Car to a first-place finish during the Vendor Street Challenge Autocross at the Meguiar’s Orange County Get Together in Costa Mesa, California. Tucker posted a 29.1 during his final run, which was good enough to grab first place. Detroit Speed & Engineering, Mooresville, NC; 704/662-3272.
		Penray announced that Larry Collet has joined the automotive division’s sales team as a regional sales manager. Collet is responsible for sales with current customers and helping to build and establish relationships with future customers. Prior to Penray, Collet spent 23 years with the ITW Performance Polymers Division of the Permatex chemical company.
		A group of 13 Ohio Technical College students enrolled in the   college’s alternative fuel program recently developed an all-electric-powered vehicle dubbed the Electro-Van. The fully functional ’97 Ford E350 runs solely on electricity and can reach speeds of up to 35 mph with a two-hour drive-time capacity. The van uses 21 batteries for power—solar panels have been added for recharging the batteries—and an electric motor that delivers up to 95 hp. Ohio Technical College, Cleveland, OH; 800/322-7000.
		Continental Tire North America (CTNA) opened its new $11 million, 75,000-sq.-ft. North American headquarters in northern Lancaster County, South Carolina. CTNA’s CEO Matthias Schoenberg kicked off a special opening ceremony with a ribbon cutting and news conference. The facility currently employs 375 people with the opportunity to expand. CTNA, Charlotte, NC; 704/583-3900.
		Ted Steven’s ’40 Mercury Coupe was awarded the 2009 Goodguys West Coast Custom of the Year at the 27th All American Get-Together in Pleasanton. Steven’s Merc was recently restored and freshened by Roy Brizio Street Rods in South San Francisco. In addition, Marvin Bok’s ’39 Ford convertible captured the Goodguys 2009 Street Rod d’Elegance award at the 9th Del Mar Nationals in April. Prior to sweeping the d’Elegance title in Del Mar, it was selected by Chip Foose for the Chip Foose Design of Excellence Award at the Grand National Roadster Show. Goodguys Rod & Custom Association, Pleasanton, CA; 925/838-9876.
		Eaton Automotive, a division of Eaton Corp., announced that Jeff Saxton was moved to sales engineer for its automotive aftermarket performance products group. Saxton’s responsibilities include technician training and rep group management. He has been with Eaton since 1991. Eaton Corp., Eden Prairie, MN; 952/937-9800.
		ACI (Agri-Cover Inc.) hired Britta Dahl in its marketing department as graphic designer. Dahl will oversee the company’s creative materials for print and online advertisements and literature. ACI, Jamestown, ND; 866/414-5422.

SoffSeal Inc. promoted both Sandy Fox and Christopher Sondles to executive vice president. Fox and Sondles were mentored by the late Gary Anderson, SoffSeal’s founder and former president. Fox will oversee the company’s operations and finance, and Sondles will oversee product development, sales and marketing. SoffSeal Inc., Harrison, OH; 800/426-0902.

Azentek LLC announced that u-blox, a Swiss provider of GPS technology, will provide GPS receiver modules to the company. The modules provide navigation and location awareness in Azentek’s Atlas in-car personal computers and its SmartMirror device. Azentek, Grand Blanc, MI; 810/694-4500.

Toyo Tire U.S.A. Corp. launched an all-new website, www.toyotires.com. The company’s goal with the complete site redesign, which includes a new web address, was to create a user-friendly resources tool for consumers and dealers. Toyo Tire, Cypress, CA; 714/236-2080.

Mota hired two automotive veterans to key positions within the company. Charlie Vogelheim, previously vice president of automotive development at JD Power & Associates, was named chief trust and transparency officer, and Steven J. McAuley, former CEO of GE Capital Fleet Services in the United Kingdom and vice president at Penske Auto Group, was named chief automotive officer.

Jim Wrobleski & Co. Inc. hired Tara Landry to handle data entry and general office duties, including managing office tasks, filing customer data sheets and working with the company’s manufacturers’ rep software. Jim Wrobleski & Co. Inc., Michigan City, IN; 219/879-8145.

Infineon Raceway has established the Little Racers Club, which is dedicated to the raceway’s youngest fans. For a one-time membership fee of $15, fans ages 12 and under will receive an official membership card, a backpack with Infineon Raceway and Little Racer’s Club logos and other benefits, including free tickets to certain raceway events. Infineon Raceway, Sonoma, CA; 707/938-8448.

Ann Durham was promoted to president of Global Vehicles U.S.A. Inc., the distributor of vehicles produced by India’s Mahindra & Mahindra. Durham joined the company in January 2008 as vice president, finance and administration and was promoted late last year to senior vice president, general manager. Alpharetta, GA; 770/753-4441.

The CarDomain Network acquired StreetFire.net, an automotive file-sharing website. The combined company will continue to invest in product improvements to both CarDomain.com and StreetFire.net. Glenn Rogers, previously CEO of StreetFire, will run the combined company as CEO. CarDomain Network Inc., Seattle, WA; 206/926-2100. Streetfire.net, Los Angeles, CA; 310/882-2086.

Barry Grant Inc. appointed Bobby Writeman to the company’s technical department. Writeman’s industry experience includes 32 years as an oval track sports manager for Holley Carburetors. Barry Grant Inc., Dahlonega, GA; 706/864-8544.

The Tire Industry Association (TIA) has teamed with Bridgestone America’s business units, Bridgestone Americas Tire Operations and Bridgestone Retail Operations LLC, to create a seven-minute reference video for consumers. The video, available at www.tireindustry.org, covers tire sizing, tire-replacement guidelines, proper tire rotation and more. TIA, Bowie, MD; 301/430-7280.

SEMA News - June 2009
RESEARCH

By Jim Spoonhower

Industry Leaders Continue to Mine the Markets

There have been eight rough patches in the marketplace since the automotive specialty-equipment industry began back in the ’30s. Each one had its impact on the marketplace, but the entrepreneurs running industry companies managed to weather them and, in some cases, found opportunities. The most recent is probably the harshest of the group, but there is no reason to think that industry leaders will not be able to find their way through it. So what made this time different? The following were a number of contributing factors.

• New-vehicle sales dropped from 16.1 million units in 2007 to 13.2 million in 2008.
• Gasoline prices peaked at more than $4 a gallon in 2008.
• The Dow Jones average dropped 33.8% in 2008.
• The U.S. housing market bubble burst in 2008.

The compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

But the one thing that really makes the current tough economy different for our industry is the presence of mainstream consumers in the customer base. Historically, the vast majority of industry product consumers have been enthusiasts. But over the past five to 10 years, a lot of mainstream consumers have purchased industry products just because it was “cool” to modify the family SUV or pickup, and they had plenty of cash or credit to spend.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do. That’s why the industry is feeling the effects of the tough market this time around more than ever before. The good news is that enthusiasts are still buying industry products!

Market Size

In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion. That’s a decrease of 16.4% from 2007.

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth. The first was in 1991, when the industry was hit doubly hard—a soft economy combined with the first Gulf War. Consumers at home weren’t spending or were glued to CNN, and a significant portion of industry enthusiasts were otherwise occupied. The second came 10 years later in 2001, and now the third six years later, officially beginning in 2007. Of those, only 1991 and 2008 resulted in negative growth for the industry. The question we have to ask is, should we plan on an economic slowdown every five to 10 years?

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth.
In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion.

Market Segments

Traditionally, we group industry products into one of three market segments: specialty accessories and appearance products; racing and performance; and wheels, tires and suspension. These segments are made up of groups of products that serve similar functions and are generally added for the same purposes.

Specialty accessories and appearance products include interior trim and accessories, restyling and appearance products, specialty waxes and chemicals, graphics and decals, sunroofs and others. This segment has a broader range and larger number of products than the other two. Often, these products are the non-enthusiast’s initial contact with the specialty automotive industry. As a result, this segment was the hardest hit when the economy got tough.

Racing and performance products include internal engine parts, drivetrain, exhaust systems, fuel systems and ignition components designed to improve performance through increased durability, capability or dependability. This segment is where the industry had its beginnings.

The second wave of parts to carry the automotive specialty-equipment industry was wheels, tires and suspension products. As off-roading became more popular and as increasing numbers of consumers used custom wheels to dress up their vehicles, this segment increased in size. Wheels, tires and suspension components include specialty shocks, struts, lowering packages, lift kits, custom wheels, performance tires and performance brakes.

2008 Specialty-Equipment Market

Accessories and appearance products took a big hit in 2008 after dramatic growth over the previous 10 years. The segment lost more than 10% of its market share, while the other two segments actually grew. In large part, that is a testament to the continued buying habits of enthusiasts while mainstream consumers sat on the sidelines.

Market Niches

It has been said that the automotive specialty-equipment industry is composed of a large number of smaller niche markets, and that is very true. Each of these niches is centered around a vehicle type, how the vehicle is used or the type of components involved. In fact, industry concentration on individual market niches is probably one of the factors that has sustained and grown the industry so well over the years.

As mainstream consumers stopped spending on industry products, the light-truck products market dropped. In some cases, firms that had targeted the light-truck market diversified into trailers and trailer products. Some shifted to serving the fleet market exclusively, while others went after restoration work.

On the other hand, the compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do.

 

Accessories and appearance products took a big hit in 2008 while the other two segments actually grew.

As new-vehicle sales dropped and franchise dealers began disappearing, the restyling niche began to decline. In some cases, firms in this niche shifted to compact performance, while others specialized in portions of the restoration market. One interesting twist in restylers’ response to the market was the shift to doing preventative maintenance for car owners and mixing in some customization along the way.

Overall, 2008 was a tough year for many in the automotive specialty-equipment industry. But not all firms experienced declines in business. In fact, a survey conducted by SEMA in April 2009 found that 37% of responding companies had higher sales in 2008 than in 2007, thus proving that the competitive entrepreneurial spirit is alive and well in the industry. The year 2008 may have been a tough year, but industry leaders found the opportunities and took advantage of them.

Recession Definition

The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on November 28, 2008. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the ’90s lasted 120 months.

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.

SEMA News - June 2009
RESEARCH

By Jim Spoonhower

Industry Leaders Continue to Mine the Markets

There have been eight rough patches in the marketplace since the automotive specialty-equipment industry began back in the ’30s. Each one had its impact on the marketplace, but the entrepreneurs running industry companies managed to weather them and, in some cases, found opportunities. The most recent is probably the harshest of the group, but there is no reason to think that industry leaders will not be able to find their way through it. So what made this time different? The following were a number of contributing factors.

• New-vehicle sales dropped from 16.1 million units in 2007 to 13.2 million in 2008.
• Gasoline prices peaked at more than $4 a gallon in 2008.
• The Dow Jones average dropped 33.8% in 2008.
• The U.S. housing market bubble burst in 2008.

The compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

But the one thing that really makes the current tough economy different for our industry is the presence of mainstream consumers in the customer base. Historically, the vast majority of industry product consumers have been enthusiasts. But over the past five to 10 years, a lot of mainstream consumers have purchased industry products just because it was “cool” to modify the family SUV or pickup, and they had plenty of cash or credit to spend.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do. That’s why the industry is feeling the effects of the tough market this time around more than ever before. The good news is that enthusiasts are still buying industry products!

Market Size

In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion. That’s a decrease of 16.4% from 2007.

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth. The first was in 1991, when the industry was hit doubly hard—a soft economy combined with the first Gulf War. Consumers at home weren’t spending or were glued to CNN, and a significant portion of industry enthusiasts were otherwise occupied. The second came 10 years later in 2001, and now the third six years later, officially beginning in 2007. Of those, only 1991 and 2008 resulted in negative growth for the industry. The question we have to ask is, should we plan on an economic slowdown every five to 10 years?

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth.
In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion.

Market Segments

Traditionally, we group industry products into one of three market segments: specialty accessories and appearance products; racing and performance; and wheels, tires and suspension. These segments are made up of groups of products that serve similar functions and are generally added for the same purposes.

Specialty accessories and appearance products include interior trim and accessories, restyling and appearance products, specialty waxes and chemicals, graphics and decals, sunroofs and others. This segment has a broader range and larger number of products than the other two. Often, these products are the non-enthusiast’s initial contact with the specialty automotive industry. As a result, this segment was the hardest hit when the economy got tough.

Racing and performance products include internal engine parts, drivetrain, exhaust systems, fuel systems and ignition components designed to improve performance through increased durability, capability or dependability. This segment is where the industry had its beginnings.

The second wave of parts to carry the automotive specialty-equipment industry was wheels, tires and suspension products. As off-roading became more popular and as increasing numbers of consumers used custom wheels to dress up their vehicles, this segment increased in size. Wheels, tires and suspension components include specialty shocks, struts, lowering packages, lift kits, custom wheels, performance tires and performance brakes.

2008 Specialty-Equipment Market

Accessories and appearance products took a big hit in 2008 after dramatic growth over the previous 10 years. The segment lost more than 10% of its market share, while the other two segments actually grew. In large part, that is a testament to the continued buying habits of enthusiasts while mainstream consumers sat on the sidelines.

Market Niches

It has been said that the automotive specialty-equipment industry is composed of a large number of smaller niche markets, and that is very true. Each of these niches is centered around a vehicle type, how the vehicle is used or the type of components involved. In fact, industry concentration on individual market niches is probably one of the factors that has sustained and grown the industry so well over the years.

As mainstream consumers stopped spending on industry products, the light-truck products market dropped. In some cases, firms that had targeted the light-truck market diversified into trailers and trailer products. Some shifted to serving the fleet market exclusively, while others went after restoration work.

On the other hand, the compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do.

 

Accessories and appearance products took a big hit in 2008 while the other two segments actually grew.

As new-vehicle sales dropped and franchise dealers began disappearing, the restyling niche began to decline. In some cases, firms in this niche shifted to compact performance, while others specialized in portions of the restoration market. One interesting twist in restylers’ response to the market was the shift to doing preventative maintenance for car owners and mixing in some customization along the way.

Overall, 2008 was a tough year for many in the automotive specialty-equipment industry. But not all firms experienced declines in business. In fact, a survey conducted by SEMA in April 2009 found that 37% of responding companies had higher sales in 2008 than in 2007, thus proving that the competitive entrepreneurial spirit is alive and well in the industry. The year 2008 may have been a tough year, but industry leaders found the opportunities and took advantage of them.

Recession Definition

The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on November 28, 2008. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the ’90s lasted 120 months.

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.

SEMA News - June 2009
RESEARCH

By Jim Spoonhower

Industry Leaders Continue to Mine the Markets

There have been eight rough patches in the marketplace since the automotive specialty-equipment industry began back in the ’30s. Each one had its impact on the marketplace, but the entrepreneurs running industry companies managed to weather them and, in some cases, found opportunities. The most recent is probably the harshest of the group, but there is no reason to think that industry leaders will not be able to find their way through it. So what made this time different? The following were a number of contributing factors.

• New-vehicle sales dropped from 16.1 million units in 2007 to 13.2 million in 2008.
• Gasoline prices peaked at more than $4 a gallon in 2008.
• The Dow Jones average dropped 33.8% in 2008.
• The U.S. housing market bubble burst in 2008.

The compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

But the one thing that really makes the current tough economy different for our industry is the presence of mainstream consumers in the customer base. Historically, the vast majority of industry product consumers have been enthusiasts. But over the past five to 10 years, a lot of mainstream consumers have purchased industry products just because it was “cool” to modify the family SUV or pickup, and they had plenty of cash or credit to spend.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do. That’s why the industry is feeling the effects of the tough market this time around more than ever before. The good news is that enthusiasts are still buying industry products!

Market Size

In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion. That’s a decrease of 16.4% from 2007.

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth. The first was in 1991, when the industry was hit doubly hard—a soft economy combined with the first Gulf War. Consumers at home weren’t spending or were glued to CNN, and a significant portion of industry enthusiasts were otherwise occupied. The second came 10 years later in 2001, and now the third six years later, officially beginning in 2007. Of those, only 1991 and 2008 resulted in negative growth for the industry. The question we have to ask is, should we plan on an economic slowdown every five to 10 years?

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth.
In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion.

Market Segments

Traditionally, we group industry products into one of three market segments: specialty accessories and appearance products; racing and performance; and wheels, tires and suspension. These segments are made up of groups of products that serve similar functions and are generally added for the same purposes.

Specialty accessories and appearance products include interior trim and accessories, restyling and appearance products, specialty waxes and chemicals, graphics and decals, sunroofs and others. This segment has a broader range and larger number of products than the other two. Often, these products are the non-enthusiast’s initial contact with the specialty automotive industry. As a result, this segment was the hardest hit when the economy got tough.

Racing and performance products include internal engine parts, drivetrain, exhaust systems, fuel systems and ignition components designed to improve performance through increased durability, capability or dependability. This segment is where the industry had its beginnings.

The second wave of parts to carry the automotive specialty-equipment industry was wheels, tires and suspension products. As off-roading became more popular and as increasing numbers of consumers used custom wheels to dress up their vehicles, this segment increased in size. Wheels, tires and suspension components include specialty shocks, struts, lowering packages, lift kits, custom wheels, performance tires and performance brakes.

2008 Specialty-Equipment Market

Accessories and appearance products took a big hit in 2008 after dramatic growth over the previous 10 years. The segment lost more than 10% of its market share, while the other two segments actually grew. In large part, that is a testament to the continued buying habits of enthusiasts while mainstream consumers sat on the sidelines.

Market Niches

It has been said that the automotive specialty-equipment industry is composed of a large number of smaller niche markets, and that is very true. Each of these niches is centered around a vehicle type, how the vehicle is used or the type of components involved. In fact, industry concentration on individual market niches is probably one of the factors that has sustained and grown the industry so well over the years.

As mainstream consumers stopped spending on industry products, the light-truck products market dropped. In some cases, firms that had targeted the light-truck market diversified into trailers and trailer products. Some shifted to serving the fleet market exclusively, while others went after restoration work.

On the other hand, the compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do.

 

Accessories and appearance products took a big hit in 2008 while the other two segments actually grew.

As new-vehicle sales dropped and franchise dealers began disappearing, the restyling niche began to decline. In some cases, firms in this niche shifted to compact performance, while others specialized in portions of the restoration market. One interesting twist in restylers’ response to the market was the shift to doing preventative maintenance for car owners and mixing in some customization along the way.

Overall, 2008 was a tough year for many in the automotive specialty-equipment industry. But not all firms experienced declines in business. In fact, a survey conducted by SEMA in April 2009 found that 37% of responding companies had higher sales in 2008 than in 2007, thus proving that the competitive entrepreneurial spirit is alive and well in the industry. The year 2008 may have been a tough year, but industry leaders found the opportunities and took advantage of them.

Recession Definition

The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on November 28, 2008. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the ’90s lasted 120 months.

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.

SEMA News - June 2009
RESEARCH

By Jim Spoonhower

Industry Leaders Continue to Mine the Markets

There have been eight rough patches in the marketplace since the automotive specialty-equipment industry began back in the ’30s. Each one had its impact on the marketplace, but the entrepreneurs running industry companies managed to weather them and, in some cases, found opportunities. The most recent is probably the harshest of the group, but there is no reason to think that industry leaders will not be able to find their way through it. So what made this time different? The following were a number of contributing factors.

• New-vehicle sales dropped from 16.1 million units in 2007 to 13.2 million in 2008.
• Gasoline prices peaked at more than $4 a gallon in 2008.
• The Dow Jones average dropped 33.8% in 2008.
• The U.S. housing market bubble burst in 2008.

The compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

But the one thing that really makes the current tough economy different for our industry is the presence of mainstream consumers in the customer base. Historically, the vast majority of industry product consumers have been enthusiasts. But over the past five to 10 years, a lot of mainstream consumers have purchased industry products just because it was “cool” to modify the family SUV or pickup, and they had plenty of cash or credit to spend.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do. That’s why the industry is feeling the effects of the tough market this time around more than ever before. The good news is that enthusiasts are still buying industry products!

Market Size

In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion. That’s a decrease of 16.4% from 2007.

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth. The first was in 1991, when the industry was hit doubly hard—a soft economy combined with the first Gulf War. Consumers at home weren’t spending or were glued to CNN, and a significant portion of industry enthusiasts were otherwise occupied. The second came 10 years later in 2001, and now the third six years later, officially beginning in 2007. Of those, only 1991 and 2008 resulted in negative growth for the industry. The question we have to ask is, should we plan on an economic slowdown every five to 10 years?

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth.
In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion.

Market Segments

Traditionally, we group industry products into one of three market segments: specialty accessories and appearance products; racing and performance; and wheels, tires and suspension. These segments are made up of groups of products that serve similar functions and are generally added for the same purposes.

Specialty accessories and appearance products include interior trim and accessories, restyling and appearance products, specialty waxes and chemicals, graphics and decals, sunroofs and others. This segment has a broader range and larger number of products than the other two. Often, these products are the non-enthusiast’s initial contact with the specialty automotive industry. As a result, this segment was the hardest hit when the economy got tough.

Racing and performance products include internal engine parts, drivetrain, exhaust systems, fuel systems and ignition components designed to improve performance through increased durability, capability or dependability. This segment is where the industry had its beginnings.

The second wave of parts to carry the automotive specialty-equipment industry was wheels, tires and suspension products. As off-roading became more popular and as increasing numbers of consumers used custom wheels to dress up their vehicles, this segment increased in size. Wheels, tires and suspension components include specialty shocks, struts, lowering packages, lift kits, custom wheels, performance tires and performance brakes.

2008 Specialty-Equipment Market

Accessories and appearance products took a big hit in 2008 after dramatic growth over the previous 10 years. The segment lost more than 10% of its market share, while the other two segments actually grew. In large part, that is a testament to the continued buying habits of enthusiasts while mainstream consumers sat on the sidelines.

Market Niches

It has been said that the automotive specialty-equipment industry is composed of a large number of smaller niche markets, and that is very true. Each of these niches is centered around a vehicle type, how the vehicle is used or the type of components involved. In fact, industry concentration on individual market niches is probably one of the factors that has sustained and grown the industry so well over the years.

As mainstream consumers stopped spending on industry products, the light-truck products market dropped. In some cases, firms that had targeted the light-truck market diversified into trailers and trailer products. Some shifted to serving the fleet market exclusively, while others went after restoration work.

On the other hand, the compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do.

 

Accessories and appearance products took a big hit in 2008 while the other two segments actually grew.

As new-vehicle sales dropped and franchise dealers began disappearing, the restyling niche began to decline. In some cases, firms in this niche shifted to compact performance, while others specialized in portions of the restoration market. One interesting twist in restylers’ response to the market was the shift to doing preventative maintenance for car owners and mixing in some customization along the way.

Overall, 2008 was a tough year for many in the automotive specialty-equipment industry. But not all firms experienced declines in business. In fact, a survey conducted by SEMA in April 2009 found that 37% of responding companies had higher sales in 2008 than in 2007, thus proving that the competitive entrepreneurial spirit is alive and well in the industry. The year 2008 may have been a tough year, but industry leaders found the opportunities and took advantage of them.

Recession Definition

The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on November 28, 2008. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the ’90s lasted 120 months.

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.

SEMA News - June 2009
RESEARCH

By Jim Spoonhower

Industry Leaders Continue to Mine the Markets

There have been eight rough patches in the marketplace since the automotive specialty-equipment industry began back in the ’30s. Each one had its impact on the marketplace, but the entrepreneurs running industry companies managed to weather them and, in some cases, found opportunities. The most recent is probably the harshest of the group, but there is no reason to think that industry leaders will not be able to find their way through it. So what made this time different? The following were a number of contributing factors.

• New-vehicle sales dropped from 16.1 million units in 2007 to 13.2 million in 2008.
• Gasoline prices peaked at more than $4 a gallon in 2008.
• The Dow Jones average dropped 33.8% in 2008.
• The U.S. housing market bubble burst in 2008.

The compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

But the one thing that really makes the current tough economy different for our industry is the presence of mainstream consumers in the customer base. Historically, the vast majority of industry product consumers have been enthusiasts. But over the past five to 10 years, a lot of mainstream consumers have purchased industry products just because it was “cool” to modify the family SUV or pickup, and they had plenty of cash or credit to spend.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do. That’s why the industry is feeling the effects of the tough market this time around more than ever before. The good news is that enthusiasts are still buying industry products!

Market Size

In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion. That’s a decrease of 16.4% from 2007.

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth. The first was in 1991, when the industry was hit doubly hard—a soft economy combined with the first Gulf War. Consumers at home weren’t spending or were glued to CNN, and a significant portion of industry enthusiasts were otherwise occupied. The second came 10 years later in 2001, and now the third six years later, officially beginning in 2007. Of those, only 1991 and 2008 resulted in negative growth for the industry. The question we have to ask is, should we plan on an economic slowdown every five to 10 years?

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth.
In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion.

Market Segments

Traditionally, we group industry products into one of three market segments: specialty accessories and appearance products; racing and performance; and wheels, tires and suspension. These segments are made up of groups of products that serve similar functions and are generally added for the same purposes.

Specialty accessories and appearance products include interior trim and accessories, restyling and appearance products, specialty waxes and chemicals, graphics and decals, sunroofs and others. This segment has a broader range and larger number of products than the other two. Often, these products are the non-enthusiast’s initial contact with the specialty automotive industry. As a result, this segment was the hardest hit when the economy got tough.

Racing and performance products include internal engine parts, drivetrain, exhaust systems, fuel systems and ignition components designed to improve performance through increased durability, capability or dependability. This segment is where the industry had its beginnings.

The second wave of parts to carry the automotive specialty-equipment industry was wheels, tires and suspension products. As off-roading became more popular and as increasing numbers of consumers used custom wheels to dress up their vehicles, this segment increased in size. Wheels, tires and suspension components include specialty shocks, struts, lowering packages, lift kits, custom wheels, performance tires and performance brakes.

2008 Specialty-Equipment Market

Accessories and appearance products took a big hit in 2008 after dramatic growth over the previous 10 years. The segment lost more than 10% of its market share, while the other two segments actually grew. In large part, that is a testament to the continued buying habits of enthusiasts while mainstream consumers sat on the sidelines.

Market Niches

It has been said that the automotive specialty-equipment industry is composed of a large number of smaller niche markets, and that is very true. Each of these niches is centered around a vehicle type, how the vehicle is used or the type of components involved. In fact, industry concentration on individual market niches is probably one of the factors that has sustained and grown the industry so well over the years.

As mainstream consumers stopped spending on industry products, the light-truck products market dropped. In some cases, firms that had targeted the light-truck market diversified into trailers and trailer products. Some shifted to serving the fleet market exclusively, while others went after restoration work.

On the other hand, the compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do.

 

Accessories and appearance products took a big hit in 2008 while the other two segments actually grew.

As new-vehicle sales dropped and franchise dealers began disappearing, the restyling niche began to decline. In some cases, firms in this niche shifted to compact performance, while others specialized in portions of the restoration market. One interesting twist in restylers’ response to the market was the shift to doing preventative maintenance for car owners and mixing in some customization along the way.

Overall, 2008 was a tough year for many in the automotive specialty-equipment industry. But not all firms experienced declines in business. In fact, a survey conducted by SEMA in April 2009 found that 37% of responding companies had higher sales in 2008 than in 2007, thus proving that the competitive entrepreneurial spirit is alive and well in the industry. The year 2008 may have been a tough year, but industry leaders found the opportunities and took advantage of them.

Recession Definition

The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on November 28, 2008. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the ’90s lasted 120 months.

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.

SEMA News - June 2009
RESEARCH

By Jim Spoonhower

Industry Leaders Continue to Mine the Markets

There have been eight rough patches in the marketplace since the automotive specialty-equipment industry began back in the ’30s. Each one had its impact on the marketplace, but the entrepreneurs running industry companies managed to weather them and, in some cases, found opportunities. The most recent is probably the harshest of the group, but there is no reason to think that industry leaders will not be able to find their way through it. So what made this time different? The following were a number of contributing factors.

• New-vehicle sales dropped from 16.1 million units in 2007 to 13.2 million in 2008.
• Gasoline prices peaked at more than $4 a gallon in 2008.
• The Dow Jones average dropped 33.8% in 2008.
• The U.S. housing market bubble burst in 2008.

The compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

But the one thing that really makes the current tough economy different for our industry is the presence of mainstream consumers in the customer base. Historically, the vast majority of industry product consumers have been enthusiasts. But over the past five to 10 years, a lot of mainstream consumers have purchased industry products just because it was “cool” to modify the family SUV or pickup, and they had plenty of cash or credit to spend.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do. That’s why the industry is feeling the effects of the tough market this time around more than ever before. The good news is that enthusiasts are still buying industry products!

Market Size

In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion. That’s a decrease of 16.4% from 2007.

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth. The first was in 1991, when the industry was hit doubly hard—a soft economy combined with the first Gulf War. Consumers at home weren’t spending or were glued to CNN, and a significant portion of industry enthusiasts were otherwise occupied. The second came 10 years later in 2001, and now the third six years later, officially beginning in 2007. Of those, only 1991 and 2008 resulted in negative growth for the industry. The question we have to ask is, should we plan on an economic slowdown every five to 10 years?

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth.
In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion.

Market Segments

Traditionally, we group industry products into one of three market segments: specialty accessories and appearance products; racing and performance; and wheels, tires and suspension. These segments are made up of groups of products that serve similar functions and are generally added for the same purposes.

Specialty accessories and appearance products include interior trim and accessories, restyling and appearance products, specialty waxes and chemicals, graphics and decals, sunroofs and others. This segment has a broader range and larger number of products than the other two. Often, these products are the non-enthusiast’s initial contact with the specialty automotive industry. As a result, this segment was the hardest hit when the economy got tough.

Racing and performance products include internal engine parts, drivetrain, exhaust systems, fuel systems and ignition components designed to improve performance through increased durability, capability or dependability. This segment is where the industry had its beginnings.

The second wave of parts to carry the automotive specialty-equipment industry was wheels, tires and suspension products. As off-roading became more popular and as increasing numbers of consumers used custom wheels to dress up their vehicles, this segment increased in size. Wheels, tires and suspension components include specialty shocks, struts, lowering packages, lift kits, custom wheels, performance tires and performance brakes.

2008 Specialty-Equipment Market

Accessories and appearance products took a big hit in 2008 after dramatic growth over the previous 10 years. The segment lost more than 10% of its market share, while the other two segments actually grew. In large part, that is a testament to the continued buying habits of enthusiasts while mainstream consumers sat on the sidelines.

Market Niches

It has been said that the automotive specialty-equipment industry is composed of a large number of smaller niche markets, and that is very true. Each of these niches is centered around a vehicle type, how the vehicle is used or the type of components involved. In fact, industry concentration on individual market niches is probably one of the factors that has sustained and grown the industry so well over the years.

As mainstream consumers stopped spending on industry products, the light-truck products market dropped. In some cases, firms that had targeted the light-truck market diversified into trailers and trailer products. Some shifted to serving the fleet market exclusively, while others went after restoration work.

On the other hand, the compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do.

 

Accessories and appearance products took a big hit in 2008 while the other two segments actually grew.

As new-vehicle sales dropped and franchise dealers began disappearing, the restyling niche began to decline. In some cases, firms in this niche shifted to compact performance, while others specialized in portions of the restoration market. One interesting twist in restylers’ response to the market was the shift to doing preventative maintenance for car owners and mixing in some customization along the way.

Overall, 2008 was a tough year for many in the automotive specialty-equipment industry. But not all firms experienced declines in business. In fact, a survey conducted by SEMA in April 2009 found that 37% of responding companies had higher sales in 2008 than in 2007, thus proving that the competitive entrepreneurial spirit is alive and well in the industry. The year 2008 may have been a tough year, but industry leaders found the opportunities and took advantage of them.

Recession Definition

The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on November 28, 2008. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the ’90s lasted 120 months.

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.

SEMA News - June 2009
RESEARCH

By Jim Spoonhower

Industry Leaders Continue to Mine the Markets

There have been eight rough patches in the marketplace since the automotive specialty-equipment industry began back in the ’30s. Each one had its impact on the marketplace, but the entrepreneurs running industry companies managed to weather them and, in some cases, found opportunities. The most recent is probably the harshest of the group, but there is no reason to think that industry leaders will not be able to find their way through it. So what made this time different? The following were a number of contributing factors.

• New-vehicle sales dropped from 16.1 million units in 2007 to 13.2 million in 2008.
• Gasoline prices peaked at more than $4 a gallon in 2008.
• The Dow Jones average dropped 33.8% in 2008.
• The U.S. housing market bubble burst in 2008.

The compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

But the one thing that really makes the current tough economy different for our industry is the presence of mainstream consumers in the customer base. Historically, the vast majority of industry product consumers have been enthusiasts. But over the past five to 10 years, a lot of mainstream consumers have purchased industry products just because it was “cool” to modify the family SUV or pickup, and they had plenty of cash or credit to spend.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do. That’s why the industry is feeling the effects of the tough market this time around more than ever before. The good news is that enthusiasts are still buying industry products!

Market Size

In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion. That’s a decrease of 16.4% from 2007.

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth. The first was in 1991, when the industry was hit doubly hard—a soft economy combined with the first Gulf War. Consumers at home weren’t spending or were glued to CNN, and a significant portion of industry enthusiasts were otherwise occupied. The second came 10 years later in 2001, and now the third six years later, officially beginning in 2007. Of those, only 1991 and 2008 resulted in negative growth for the industry. The question we have to ask is, should we plan on an economic slowdown every five to 10 years?

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth.
In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion.

Market Segments

Traditionally, we group industry products into one of three market segments: specialty accessories and appearance products; racing and performance; and wheels, tires and suspension. These segments are made up of groups of products that serve similar functions and are generally added for the same purposes.

Specialty accessories and appearance products include interior trim and accessories, restyling and appearance products, specialty waxes and chemicals, graphics and decals, sunroofs and others. This segment has a broader range and larger number of products than the other two. Often, these products are the non-enthusiast’s initial contact with the specialty automotive industry. As a result, this segment was the hardest hit when the economy got tough.

Racing and performance products include internal engine parts, drivetrain, exhaust systems, fuel systems and ignition components designed to improve performance through increased durability, capability or dependability. This segment is where the industry had its beginnings.

The second wave of parts to carry the automotive specialty-equipment industry was wheels, tires and suspension products. As off-roading became more popular and as increasing numbers of consumers used custom wheels to dress up their vehicles, this segment increased in size. Wheels, tires and suspension components include specialty shocks, struts, lowering packages, lift kits, custom wheels, performance tires and performance brakes.

2008 Specialty-Equipment Market

Accessories and appearance products took a big hit in 2008 after dramatic growth over the previous 10 years. The segment lost more than 10% of its market share, while the other two segments actually grew. In large part, that is a testament to the continued buying habits of enthusiasts while mainstream consumers sat on the sidelines.

Market Niches

It has been said that the automotive specialty-equipment industry is composed of a large number of smaller niche markets, and that is very true. Each of these niches is centered around a vehicle type, how the vehicle is used or the type of components involved. In fact, industry concentration on individual market niches is probably one of the factors that has sustained and grown the industry so well over the years.

As mainstream consumers stopped spending on industry products, the light-truck products market dropped. In some cases, firms that had targeted the light-truck market diversified into trailers and trailer products. Some shifted to serving the fleet market exclusively, while others went after restoration work.

On the other hand, the compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do.

 

Accessories and appearance products took a big hit in 2008 while the other two segments actually grew.

As new-vehicle sales dropped and franchise dealers began disappearing, the restyling niche began to decline. In some cases, firms in this niche shifted to compact performance, while others specialized in portions of the restoration market. One interesting twist in restylers’ response to the market was the shift to doing preventative maintenance for car owners and mixing in some customization along the way.

Overall, 2008 was a tough year for many in the automotive specialty-equipment industry. But not all firms experienced declines in business. In fact, a survey conducted by SEMA in April 2009 found that 37% of responding companies had higher sales in 2008 than in 2007, thus proving that the competitive entrepreneurial spirit is alive and well in the industry. The year 2008 may have been a tough year, but industry leaders found the opportunities and took advantage of them.

Recession Definition

The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on November 28, 2008. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the ’90s lasted 120 months.

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.

SEMA News - June 2009
RESEARCH

By Jim Spoonhower

Industry Leaders Continue to Mine the Markets

There have been eight rough patches in the marketplace since the automotive specialty-equipment industry began back in the ’30s. Each one had its impact on the marketplace, but the entrepreneurs running industry companies managed to weather them and, in some cases, found opportunities. The most recent is probably the harshest of the group, but there is no reason to think that industry leaders will not be able to find their way through it. So what made this time different? The following were a number of contributing factors.

• New-vehicle sales dropped from 16.1 million units in 2007 to 13.2 million in 2008.
• Gasoline prices peaked at more than $4 a gallon in 2008.
• The Dow Jones average dropped 33.8% in 2008.
• The U.S. housing market bubble burst in 2008.

The compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

But the one thing that really makes the current tough economy different for our industry is the presence of mainstream consumers in the customer base. Historically, the vast majority of industry product consumers have been enthusiasts. But over the past five to 10 years, a lot of mainstream consumers have purchased industry products just because it was “cool” to modify the family SUV or pickup, and they had plenty of cash or credit to spend.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do. That’s why the industry is feeling the effects of the tough market this time around more than ever before. The good news is that enthusiasts are still buying industry products!

Market Size

In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion. That’s a decrease of 16.4% from 2007.

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth. The first was in 1991, when the industry was hit doubly hard—a soft economy combined with the first Gulf War. Consumers at home weren’t spending or were glued to CNN, and a significant portion of industry enthusiasts were otherwise occupied. The second came 10 years later in 2001, and now the third six years later, officially beginning in 2007. Of those, only 1991 and 2008 resulted in negative growth for the industry. The question we have to ask is, should we plan on an economic slowdown every five to 10 years?

As we look over the recorded history of industry numbers, we find only three periods of soft sales growth.
In 2008, U.S. retail sales of specialty automotive products generated $31.85 billion.

Market Segments

Traditionally, we group industry products into one of three market segments: specialty accessories and appearance products; racing and performance; and wheels, tires and suspension. These segments are made up of groups of products that serve similar functions and are generally added for the same purposes.

Specialty accessories and appearance products include interior trim and accessories, restyling and appearance products, specialty waxes and chemicals, graphics and decals, sunroofs and others. This segment has a broader range and larger number of products than the other two. Often, these products are the non-enthusiast’s initial contact with the specialty automotive industry. As a result, this segment was the hardest hit when the economy got tough.

Racing and performance products include internal engine parts, drivetrain, exhaust systems, fuel systems and ignition components designed to improve performance through increased durability, capability or dependability. This segment is where the industry had its beginnings.

The second wave of parts to carry the automotive specialty-equipment industry was wheels, tires and suspension products. As off-roading became more popular and as increasing numbers of consumers used custom wheels to dress up their vehicles, this segment increased in size. Wheels, tires and suspension components include specialty shocks, struts, lowering packages, lift kits, custom wheels, performance tires and performance brakes.

2008 Specialty-Equipment Market

Accessories and appearance products took a big hit in 2008 after dramatic growth over the previous 10 years. The segment lost more than 10% of its market share, while the other two segments actually grew. In large part, that is a testament to the continued buying habits of enthusiasts while mainstream consumers sat on the sidelines.

Market Niches

It has been said that the automotive specialty-equipment industry is composed of a large number of smaller niche markets, and that is very true. Each of these niches is centered around a vehicle type, how the vehicle is used or the type of components involved. In fact, industry concentration on individual market niches is probably one of the factors that has sustained and grown the industry so well over the years.

As mainstream consumers stopped spending on industry products, the light-truck products market dropped. In some cases, firms that had targeted the light-truck market diversified into trailers and trailer products. Some shifted to serving the fleet market exclusively, while others went after restoration work.

On the other hand, the compact-performance market, which is dominated by young enthusiasts who are not so affected by the stock market or swings in the housing market, grew more than 5%.

When consumer confidence began dropping, mainstream consumers did not have the motivation to continue buying industry products the way enthusiasts do.

 

Accessories and appearance products took a big hit in 2008 while the other two segments actually grew.

As new-vehicle sales dropped and franchise dealers began disappearing, the restyling niche began to decline. In some cases, firms in this niche shifted to compact performance, while others specialized in portions of the restoration market. One interesting twist in restylers’ response to the market was the shift to doing preventative maintenance for car owners and mixing in some customization along the way.

Overall, 2008 was a tough year for many in the automotive specialty-equipment industry. But not all firms experienced declines in business. In fact, a survey conducted by SEMA in April 2009 found that 37% of responding companies had higher sales in 2008 than in 2007, thus proving that the competitive entrepreneurial spirit is alive and well in the industry. The year 2008 may have been a tough year, but industry leaders found the opportunities and took advantage of them.

Recession Definition

The Business Cycle Dating Committee of the National Bureau of Economic Research met by conference call on November 28, 2008. The committee maintains a chronology of the beginning and ending dates (months and quarters) of U.S. recessions. The committee determined that a peak in economic activity occurred in the U.S. economy in December 2007. The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the ’90s lasted 120 months.

A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators. A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion.