Toyota Motor Sales displayed a custom Yaris model in its booth at the 2008 SEMA Show.

During the 2008 SEMA Show, automakers displayed increased attention to customized CUVs and small cars, demonstrating that despite the economic downturn and declines in SUV and light-truck sales, a healthy market of opportunities still exists for SEMA members.

"The OEMs displayed twice as many crossovers in their booths at this past SEMA Show compared to the 2007 Show," said Ty Michael, SEMA market research manager. "For example, we counted 17 CUVs in Ford's booth, whereas in 2007, we only saw five. As far as small cars, we saw nine in Honda's booth in 2008, but only counted six in the previous year."

CUVs and small cars are expected to decline by only 1% and 3%, respectively, this year, according to the 2008 fourth-quarter forecast by the automotive industry consulting firm AutoPacific. The SUV segment is expected to take the biggest hit, declining by another 26% in 2009, while pickup sales will drop by another 5% this year, much less than the declines experienced last year. Midsize car sales are expected to drop 6% this year.

"Enthusiasts have been attracted to the small-car segment for several years now, and the continued popularity of the sport-compact market helped small-car sales remain relatively stable last year," said Michael. "In fact, enthusiasts who owned small cars surveyed in 2008 said they spent about 13% more on performance parts and accessories, on average, than they did the year prior."

During the 2008 SEMA Show, automakers unveiled many industry-customized CUVs
and small cars, such as this Toyota Venza.

Automakers have recognized the shift in the new-vehicle market and the impact that today’s auto mix will have on the specialty-equipment industry. During the recent SEMA Show, automakers unveiled many industry-customized CUVs and small cars. Toyota displayed custom Venza and Yaris models within its booth, a possible indication of where the market will go for these vehicles.

"Several customized versions of all-new crossovers were displayed throughout the SEMA Show floor, such as the new Ford Flex, Toyota Venza, Nissan Rogue and Chevrolet Traverse, adding excitement to the growing CUV segment while displaying to Showgoers the personalization potential of these vehicles," said Michael.

For more original SEMA research, click here.

After witnessing the vast array of specialty-equipment products available to all vehicles at the
2008 SEMA Show, Jim Hitchcock, general sales manager for Auburn Honda, now realizes the
value of pushing aftermarket sales.

Every year, dealers from throughout the world make the trek to Las Vegas in order to attend the highly anticipated SEMA Show. At the 2008 SEMA Show, no state delivered more dealer attendees than California, with 24% of the dealers based out of the Golden State.

Jim Hitchcock, general sales manager for Auburn, California-based Auburn Honda, and a 2008 SEMA Show attendee, offers his opinion on why California produced the most dealer participation.

“California is the leader in vehicle customization,” Hitchcock said. “People in California seem to be more individualistic and care more about their cars. I used to work back East, and the transportation here seems to be more of a reflection of the individual.”

Ken Crossman, dealer principal of North Hollywood, California-based Smart Center Universal City, believes that accessibility is a key reason that California dealers make the annual trip to the SEMA Show.

“I don’t need much of an excuse to go to Vegas, and the SEMA Show is a great reason to go,” Crossman said. “I have been going for at least 10 years, and the Show is always the cutting edge of what is new and what is next.”

After attending the Show, Hitchcock realized that there are more opportunities in aftermarket products than he previously considered.

“The biggest thing that we took away from the Show is to really push aftermarket sales because there is a bigger demand for it than we thought,” Hitchcock said. “We could see that just from the volume of products offered at the Show.”

Ken Crossman, dealer principal of Smart Center Universal City, was interested in viewing
products for the smart car.

Smart Center's Crossman was looking for products aimed at their group's newest smart car franchise.

“We saw a lot of manufacturers of accessories for the smart car,“ Crossman said. “The aftermarket accessories for it were really good at the recent Show.”

Crossman was also interested in the all-in-one electronics devices, which he believes will be a growing trend among consumers.

“We have been selling Pioneer and Kenwood all-in-one products.” Crossman said. “I think in terms of electronics, people want seamless integration where they have their iPod, Bluetooth, satellite radio, DVD player and navigation all rolled into one touch-screen product without having to buy five different components.”

Overall, California dealers displayed the greatest product interest in both restyling and performance accessories, according to data collected by SEMA.

The following is the complete breakdown of 2008 SEMA Show dealer attendees according to state:

At the Show, dealers also had the opportunity to attend the inaugural 2008 SEMA Show Dealer Day Program, co-hosted by SEMA and the National Automobile Dealers Association (NADA). The half-day event was designed to give dealer principals resources on how to successfully integrate accessory programs at their dealerships.

“I really liked the effort that SEMA made in reaching out to NADA and attracting dealers’ attention to the specialty-equipment market,” Crossman said.   

SEMA Show New Product: Gibson Exhaust - 2009 Dodge Challenger Cat Back System

Enthusiasts continue to dismiss gloomy economic conditions with their commitment to their hobby. Aside from casual shoppers, many dedicated enthusiasts are upholding their plans to purchase custom parts and accessories in the new year.

In its latest effort to capture enthusiast-planned spending habits, SEMA launched a survey that tapped into the minds of nearly 2,000 active enthusiasts from diverse backgrounds to gauge their goals and prospects for the coming months. Enthusiasts who subscribe to automotive magazines, visit automotive websites and frequent automotive forums were polled earlier this month.

The products they intend to purchase first in 2009 do not stray far from the common formula; they mirror traditionally popular items. Exhaust-component upgrades and cold-air intake systems remain at the top of the list. However, some differences do exist in product choices and by consumer demographic.

For example, custom wheels are appearing slightly higher on the list than usual, especially for the 31–51-year-old crowd. From their responses, enthusiasts in different age groupings are expecting to have distinct product portfolios.

Turbochargers and body kits appear higher on the lists of younger consumers than their older counterparts. These differences have helped shape each market niche in the past and could potentially do so in the future.

For example, those who own and modify vehicles with smaller displacement engines—as made popular in the compact-performance crowd—rely on forced induction more often than those with six- or eight-cylinder engines. Recent SEMA enthusiast surveys indicate 20.4% of four-cylinder, 10.56% of six-cylinder and 5.0% of eight-cylinder engines had been turbocharged. 

SEMA-member AutoBahn Designs (ABD) installation center and product showroom.

Where enthusiasts plan to purchase these products also indicate discrepancies between age groups. Younger enthusiasts, as stated many times in the past, plan to look towards online merchants for product information and sales. They favor this method more than any other group. Interestingly, their second choices are custom shops or installers.

Brick-and-mortar establishments might consider taking note of this perception; SEMA-hosted focus panels have illustrated that an online presence increases awareness and communication between consumers and retailers, thus leading to opportunities to engage larger audiences.

Older generations of enthusiasts plan to dive into mail-order catalogs, while younger ones seem less interested in printed sources, live events and other traditional outlets. Perhaps the availability of product catalogs geared towards older demographics influences their bias.

For more original SEMA market research, click here.

Rough Country Suspension Toyota Tundra

Pickups finished off 2008 with 1,958,336 in total sales, declining 27% from 2007. Although gas prices during October–December recovered from the record-breaking highs of the summer, consumers are still shying away from big pickups.

To be fair to this waning segment, overall vehicle sales dropped 18% in 2008 as consumers held off new-vehicle purchases due to the tightening credit availability, unemployment and a host of other factors that have resulted from the current economic downturn.

During the fourth quarter of 2008, total pickup sales reached 394,245, with each model experiencing double-digit declines compared to 2007. While this may sound depressing to those in the business of making and selling products for new pickups, one thing to keep in mind is that enthusiasts—the subset of consumers who tend to continue personalizing their vehicles despite economic downturns—are purchasing used pickups or keeping the ones they currently own a bit longer.

Both scenarios paint a picture of an enthusiast looking to accessorize an older vehicle in order to improve performance, enhance utility or spruce up the look of the truck.

In fact, the latest SEMA Automotive Lifestyles Survey of enthusiasts showed that 64% of pickup owners purchased their vehicles used. More than a third (36%) of these enthusiasts said they purchased a bedliner in the past year, while a staggering 49% purchased an exhaust kit. Enthusiasts are aware that new products are always available to make their old pickups look new while performing better than when they first bought it.

Attendees of the 2008 SEMA Show were treated to hundreds of customized pickups dispersed throughout the Show floor. The most common customized pickup was the Ford F-Series—the number-one vehicle displayed by exhibitors at the SEMA Show—typically with suspension and wheel/tire upgrades.

Showgoers witnessed other highly modified Chevrolet, Dodge, Toyota and Nissan pickups. Manufacturers displayed their latest innovations in new products, showing enthusiasts and road warriors alike the personalization potential of their pickups.

Enthusiasts have taken notice of the new products put out by specialty-equipment manufacturers. Despite tightening consumer spending in 2008, automotive enthusiasts who drive pickups said that they spent $2,600 each, on average, over the past 12 months on custom parts and accessories.

Automotive enthusiast magazine subscribers and forum visitors were surveyed in late 2008, with 25% saying that they drive a pickup. The average age and household income of these pickup owners surveyed was 40 and $88,000, respectively. Although pickup sales were down in 2008, enthusiasts who currently own pickups are still personalizing them, giving rise to continued opportunity for pickup parts manufacturers.

For more original SEMA market research, click here.

Responses from SEMA’s latest enthusiast survey indicate their everyday vehicles, or “daily drivers,” are being held onto longer than expected; a claim made by 64% of the respondents. This, however, is likely to lead to an opportunity for SEMA members.

Eight out of 10 enthusiasts plan to keep their primary vehicle throughout 2009 instead of opting for a new model, and, as a result, they plan to accessorize their daily drivers. Their plans for modifying these vehicles depend heavily on their demographics.

Households throughout the United States commonly possess more than one car. Last year, Experian Automotive reported that households averaged 2.28 vehicles. Americans are among the highest consuming vehicle owners per capita in the world.

The Economist notes in its Pocket World of Figures 2009 that the United States has the highest road network in the world, and the United Nations World Statistics Pocketbook sites the United States as the leading country for vehicles owned (765 vehicles per 1,000 people). Their love affair with the automobile is deeply rooted in the ability and, in some cases necessity, to travel freely.

Data from the U.S. Department of Transportation’s Federal Highway Administration shows that the total number of vehicle miles driven by U.S. drivers reached 2,656,188 million through November of 2008. Practical and personalized daily drivers fill a much beloved and necessary role.

From roof racks and equipment storage products to performance-enhancing and cosmetic upgrades, the correlation between miles traveled and sales of specialty equipment has been positive since SEMA began reporting industry statistics.

SEMA has gathered details about enthusiasts and their primary daily drivers. While many hobbyists own multiple vehicles, project cars or weekend racers, the vast majority own vehicles designed for regular commuting. Moreover, these vehicles are often treated to custom parts and accessories.

The average ages of vehicles reported by those in the study fell between 5–10 years on the road; roughly equating to model years 1999–2005. Not surprisingly, older, well-established enthusiasts own relatively newer models than their younger counterparts and vice versa.

Due to income, expenses and tastes, older consumers are more apt to purchase vehicles new, while teens and 20-somethings veer towards used. In practically every age block, roughly eight out of 10 people do not plan to replace their daily driver in the next 12 months.

Some cited financial reasons for the retention, but the overwhelming rationale was current satisfaction in the vehicle.

Age makes a difference in plans to customize these vehicles. The 16–30-year-old group has lofty intentions to accessorize and modify their vehicles, yet the 51 and older group is less optimistic. Only half of the people in this group plan to make purchases for their daily driver. Middle-aged respondents fell in between both extremes.

Some of these responses, however, run contrary to how the results were displayed for impressions to common statements.

Older enthusiasts claimed they were less likely to customize their vehicles this year. Coincidentally, they retained the impression that modifying their current vehicle would be a good alternative to purchasing a new one. They appear to be more conservative with their outlook.

Also noteworthy were the concessions made by the younger group. They anticipate being more active with their daily drivers while being more pessimistic about the additions of custom parts and accessories increasing the resale value of the vehicle.

For more original SEMA market research, click here.

ProPledge™, the ground-breaking warranty assurance initiative designed to increase sales of specialty auto products through new-car dealers, has concluded its extensive testing phase and begins rolling out nationwide in January 2009.

The Pilot Program began in 2007 and was test marketed in a dozen key regions around the country. It is administered by the Specialty Equipment Warranty Alliance (SEWA), a subsidiary of the SEMA, and includes SEMA-member accessory manufacturers and professional installers working together to offer customers a standardized, uniform warranty that covers defects in products and installation for a minimum of 36 months/36,000 miles.

The Pilot Program concluded after 18 months and includes approximately 12,000 warranted product installations without a single claim.

“The ProPledge™ Pilot Program was more successful than we could have ever imagined,” said SEMA President and CEO Chris Kersting. “The results send a powerful message that the industry stands behind its products and services and gives both auto dealers and consumers confidence and peace-of-mind in their decision to personalize and customize their vehicles.”

ProPledge™ includes protection to dealers and consumers in the event that a product or installation defect results in the denial of a vehicle warranty claim. It includes parts and labor, repair or a replacement at no cost to the customer. Additionally, ProPledge™ alleviates concerns over liability coverage for vehicle dealers through inclusion in installer and manufacturer liability policies.

A Customer Service Center provides assistance to dealers and their customers in instances when a new-vehicle warranty is denied as the result of a defect in the product or faulty installation.

“With more and more consumers wanting to personalize their vehicles, ProPledge™ offers auto dealers a valuable marketing tool to sell accessories with complete confidence and significantly boost gross profits,” said Ellen McKoy, executive director of SEWA.

“The potential revenue source,” McKoy adds, “is particularly appealing to auto dealers in today’s down market.”

The national rollout begins in January 2009 and takes place in phases over the next 12 months, with two dozen major cities targeted in the initial phase. Cities include Boston, Detroit, Cleveland, Las Vegas, Miami and San Francisco.

For a complete list of participating manufacturers and installers or information about ProPledge, visit www.propledge.com or e-mail sewa@propledge.com.

SEMA’s grassroots efforts to prevent Congress from including a nationwide “Cash for Clunkers” program in the economic stimulus package has been successful—so far. At SEMA’s request, thousands of SEMA members and SEMA Action Network (SAN) enthusiasts contacted House Speaker Nancy Pelosi in opposition to the plan.

The Speaker’s office told SEMA that your e-mails, calls and faxes were received and thanks to your work, Cash for Clunkers was not included in the economic stimulus package introduced last week in the House of Representatives. 

Unfortunately, several members of Congress did not hear the message and last week introduced separate legislation called the “Accelerated Retirement of Inefficient Vehicles Act.” This is Cash for Clunkers with a twist. Instead of focusing exclusively on older cars, this program would target “gas guzzlers” (18 mpg or less) of any model year. 

The legislation would establish a government program to use taxpayer dollars to purchase and crush vehicles into blocks of scrap metal. The cash vouchers would range from $2,500–$4,500 based on the model year and whether the replacement vehicle was a fuel-efficient new car or used car (MY 2004 or later).

Fuel-efficient is defined as getting at least 25% better mileage for the corporate average fuel economy (CAFE) target for its class. The bill sponsors want to scrap up to 1 million cars a year for at least four years.

There is no evidence that the program would achieve the goal of boosting new-car sales or increasing fuel mileage. Many states have considered scrappage programs in the past as a way to help clean the air or increase mpg, but abandoned the effort because they simply don’t work.

The programs are not cost-effective and do not achieve verifiable air-quality or fuel-economy benefits, but they do have a devastating impact on the many small businesses that market products and services for the scrapped cars. 
 
Two lawmakers—Sen. Diane Feinstein (D-CA) and Rep. Henry Waxman (D-CA)—need to hear from SEMA members that their vehicle scrappage legislation is a waste of U.S. taxpayer dollars that will cost American jobs in the specialty auto market. For those who responded to our first call for action, we need you again, along with everyone else.

Click here for talking points and complete information.  

The Green Rod project, a collaboration between SEMA member companies and the association, has yielded a retrofit kit of emissions-related aftermarket parts capable of meeting 2008 California smog-check standards. The kit was tested on a mid-80's fuel-injected 5.7L Chevy small block, a descendant of the venerable 283 pictured above.

SEMA announced that a bill has been enacted into law in California to require the Department of Motor Vehicles (DMV) to develop and administer a vehicle registration amnesty program, which would be in effect from January 1, 2010, until December 31, 2010. The program would apply to vehicles that were previously registered or classified incorrectly.

Under the new law, the DMV would be required to grant amnesty from prosecution to a vehicle owner if certain conditions are met, including the owner filing a completed application with the department.
 
Over the years, California’s complex vehicle registration laws have created continued confusion among state hobbyists and those charged with applying these laws at the ground level. The result has been that certain specially constructed hobbyist vehicles (including kit cars, customs and street rods)—estimated at 70,000 by the California Attorney General—may be erroneously titled or registered.

SEMA has worked with the California State Legislature, Attorney General’s office, Bureau of Automotive Repair, DMV and Air Resources Board to find a reasonable solution that will address the interests of all parties, including enthusiasts in the hot-rod market segment, so that specially constructed vehicles can become properly registered and titled in the state. 
 
“Given the looming threat of prosecution that owners of illegally titled specially constructed vehicles were facing, our charge was to find an equitable solution that provided these owners a reasonable period of time to voluntarily retitle their vehicles and pay appropriate back taxes and fees,” said SEMA General Counsel Russ Deane.

“The remaining element of the solution involves reaching an agreement with state regulators on a process by which specially constructed vehicles that have been accepted into the amnesty program can reach achievable smog-check compliance. In addition, we must develop provisions that will accommodate new vehicles being built today for future titling and registration, specifically those that are not among the 500 vehicles annually to which California provides certain smog-check exemptions. On these issues, substantial progress has been made.”
 
In alliance with member companies and under the banner of the “Green Rod Project,” SEMA has been able to configure a "retrofit kit" of emissions-related aftermarket parts capable of meeting 2008 California smog-check standards. The retrofit kit was installed on a high-mileage '80 El Camino fitted with a '86 fuel-injected 5.7L engine. The 5. 7L 350ci displacement small-block Chevrolet V8 engine is one of the most widely used engine platforms for all types of specially constructed vehicles.

The retrofit kit consists of an aftermarket camshaft, headers, catalytic converters, a muffler, an ignition, an electronic fuel injection (EFI) throttle body intake and an EFI controller.

“Transitioning from a carbureted environment to a fuel-injected environment while utilizing the latest controller technology and emissions parts upgrades available from the specialty-equipment industry resulted in dramatic and unprecedented reductions in tailpipe and evaporative emissions on the test vehicle,” said SEMA Technical Consultant Jim McFarland, who oversaw the Green Rod Project.

“In addition, the retrofit kit actually improved performance and drivability when compared to a carbureted engine and does not limit power in the full-acceleration mode.”
 
Under California law, 500 exemption permits for specially constructed vehicles are available every year on a first-come, first-served basis. For vehicles with an exemption, a smog-test referee compares the vehicle to those of the era that the vehicle most closely resembles to determine the model year of a specially constructed vehicle.

The vehicle’s owner can choose whether the inspector will certify the vehicle model year by body type or by the engine model year. Only those emissions controls applicable to the model year and that can be reasonably accommodated by the vehicle are required. Recognizing that the demand for the exemptions greatly exceeds the supply, the SEMA Green Rod Project is seeking to provide a solution for vehicles that do not receive one of the 500 annual exemptions.  

Now more than ever, the specialty-equipment industry needs strong, visionary leadership. SEMA's 2009 Board of Directors Nominating Committee is asking you to identify the industry's most talented leaders and nominate them for a seat on the SEMA Board of Directors.

Take a few minutes to tell us about a potential nominee and their leadership background. Self-nominations are also welcome; often the best background and experience information comes from the source.

Nominations for the 2009 SEMA Board of Directors election are due Tuesday, January 27, 2009. Please complete the nomination form, and submit it to Nominating Committee Chairman Mitch Williams at mitchwilliams@pilotautomotive.com or liaison Christine Papavero at christinep@sema.org.

Be sure to include background information and qualifications to the Nominating Committee.

Click here to access the 2009 SEMA Board of Directors nomination form. The form is a writable PDF; please follow the instructions below to complete and return it. 

1: Place your mouse cursor over the text fields and type in your responses as required.

2: When complete, go to File and select Save As...

3: You can keep the same file name or rename it, and then save it to your computer

4: Open your e-mail program (Outlook, Yahoo! Mail, Gmail, etc.), compose an e-mail to Mitch Williams or Christine Papavero, and locate and attach the file before sending.

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