Personal income rose for the third consecutive month, climbing 0.3% between September and October to $45.1 billion, according to the Bureau of Economic Analysis. The growth follows spikes of 0.1% in September and 0.3% in August. Real disposable personal income (DPI) also rose for the second month, to a total of $45.1 billion.

At the same time, real personal consumption expenditures (PCE) fell 0.5 percent. Consumers are still making money, more than they ever have in some case. But they aren't spending it. Savings in October represented 2.4% of personal income. 

The Labor Department also announced that new jobless claims fell more than expected last week from a 16-year high. Initial requests for unemployment benefits fell to a seasonally adjusted 529,000 from the previous week's upwardly revised figure of 543,000. That's lower than analysts' expectations of 537,000.

The number of people continuing to claim unemployment insurance also dropped to 3.96 million, down from the previous week's 4.02 million.

Glenn Brooks, editor of Automotive World.com, recently compared today's economic climate to that of 1991 and 1992, explaining the cyclical nature of world economies. His conclusion: “the picture could be very different by this time next year and it's those companies that are continuing to invest in R&D that will reap the rewards.”

He used the example of Mazda to prove his point. In the early ‘90s, Brooks writes that Mazda came “roaring back” from near extinction because of good management and investment in new-vehicle programs. Mazda learned that new products, and the accompanying investment in research and development, drive the automotive industry. This

Brooks also cited Volkswagen, a company investing more than $10 billion annually in the development of new models and technology. The automaker made its point when it recently announced that it was not scaling back annual production targets and is going forward with plans for a new plant in the United States.

The 2008 SEMA Show provided an indication of how much performance parts and accessory manufacturers are investing in R&D. There were more than 1,500 new products on display. If Mr. Brooks’ conclusions are correct, the automotive and specialty-equipment industries should see a dramatic resurgence when consumers again begin to spend.

For more original SEMA market research, please visit www.sema.org/research.

One of the world’s smallest cars, the smart fortwo, had an imposing presence at the 2008 SEMA Show.

It was not the first time the diminutive coupe featured at the Show, but it was the premier exhibition as a model for sale in the United States. Since going on-sale less than a year ago, the commuter car has had trouble meeting demand. There has been a steady wait for longer than the model has been on the market. In fact, the newcomer has been the only brand reporting positive sales figures for all of 2008.

Consumers continue to gobble them up and companies are beginning to use them as showpieces for their products and services. Representation at the SEMA Show was as could be expected from a vehicle with a large buzz factor; 23 tuned, modified and customized examples were found sprinkled around the exhibition space and as feature vehicles throughout the venue. This groundbreaking car is sure to be a trend-setting icon even as other microcars and subcompacts enter the market.

Exhibitors ranging from tire to exhaust manufacturers featured a smart fortwo in their SEMA Show displays.

Falken Tire Corporation

Razzi Corporation

WTW Inc./Giovanna, Gianelle, GFG

 
Black Deere Automotive

 
Auto Aftermarket Concepts (AAC)

For more original SEMA market research, please visit www.sema.org/research.

Historically, the Big Three have generally refrained from the performance parts and accessories business, but as the OEMs begin to embrace a $4.6 billion custom wheel segment, SEMA members have a window of opportunity to take advantage of the resulting shift in trends.

As OEMs continue to offer larger wheels, fitment issues for consumers will not be as difficult because they may be upgrading to a wheel/tire package that is much closer to or even the same rim size of the wheel/tire being replaced. The new package would simply offer different styling.

Despite the OEMs’ increasing pursuit of the custom wheel market, SEMA-conducted research finds that specialty-equipment market wheels continue to sell in large numbers. Much like the trend in production-vehicle wheel sizes, there are shifts in size patterns for specialty-equipment custom wheels.

For the future, the major bulge in the bell curve for car-based vehicles will be in the 18- to 20-inch sizes. That is not to say that larger wheels will not have a place, but the vast majority of fitments will be in this range when the customer upgrades to a larger wheel. There will also be a good market for 17-inch rims, since this size will be a popular OEM offering and customers will just replace the factory wheel with a custom wheel they find more attractive.

For trucks, the major future size range is 20 to 22 inches for upgrades with 18 and 19 inches popular for the factory-size replacement market. Chrome wheels may start to fade in popularity, but they probably will not completely go away.

For the complete article on custom wheels and performance tires, click here.

For more original SEMA research, click here.

Hurst's partnership with Dodge to produce the limited-edition 2009 Hurst/HEMI Challenger is one example of the increasing opportunities between automakers and specialty-equipment companies.

For SEMA-member companies in these challenging times, partnering with vehicle manufacturers provides another potential profit stream worth exploring. Not only does there exist the opportunity for strategic product placement and increased brand visibility, but refraining from participating in this arena may provide a competitive threat to those left behind.

With this in mind, SEMA funded an in-depth study, "The Specialty-Equipment Automotive Company of the Future: Guideposts for Strategic Planning," prepared by the Center for Automotive Research (CAR), which will equip members with a better view of what to expect from vehicle manufacturers in the coming years. Even for the members that do not wish to develop a direct working relationship with the OEMs and automakers, it remains essential to understand the vehicle manufacturers’ strategies in order to better prepare for their own business plans.

The study reveals the following five vehicle manufacturing strategies that will be seen over the next five years:

1: Many automakers are increasingly interested in the specialty-equipment market, although the level of interest varies greatly. Some companies view the market as a potential access point for consumer electronics and little else. Others are considering how to effectively bring industry suppliers into the product development process for a wide range of connected vehicle, performance, chassis and appearance products.   

2: There is general consensus that the specialty-equipment market for performance, chassis and appearance components is very segment-specific. Several companies indicated an emphasis on small (and performance) cars, sport-utility vehicles and pickups in their plans. Many respondents do not expect mainstream segments, such as midsize cars and crossover utilities, to offer opportunities for specialty equipment in the near future.
 
3: Automakers will continue to nurture in-house performance brands, several of which may increasingly leverage specialty-equipment performance brands. Through discussions with OEMs, it is clear that in-house brands dependent on partner-branded components will continue to exist. Multiple automakers, however, indicated interest in increasingly leveraging specialty-equipment brands for performance vehicle lines.  

4: There is a growing, but still limited, trend for automakers to design their vehicles for accessorization. All companies interviewed made it clear that a trusting, long-term partnership with selected specialty-equipment suppliers would be beneficial. Current SEMA programs (e.g., Measuring Sessions and Technology Transfer) provide a means for continued communication between automakers and specialty-equipment suppliers.

Several automakers noted that these sessions could be expanded upon to permit more comprehensive diagnostics-type data to reach the specialty equipment-market earlier.
 
5: The dealership remains the final frontier and a challenging opportunity. The OE dealership network may provide opportunity for growth, not only for member companies wishing to accessorize new vehicles, but also for consumers wishing to add specialty equipment to their current (used) vehicle. Consumers may also feel more comfortable working with a specialty-equipment installer partnered with a dealer rather than an independent installer.

As the automotive industry undergoes one of the most rapid and significant structural changes in decades, it is essential that SEMA members understand this shift and act upon it in order to ensure their success and longevity.

To gain additional insights from the CAR report, participate in the "The Specialty-Equipment Automotive Company of the Future: Guideposts for Strategic Planning (Phase I)" webinar, presented by Brett Smith, assistant director of the manufacturing, engineering and technology group at CAR, and Richard Wallace, senior project manager at CAR.

Both Smith and Wallace authored the CAR study and will present findings from the report. The webinar is scheduled for Thursday, January 15, 2009 from 10:00 a.m.–11:00 a.m. (PDT). For further details on the webinar, send your name, company, e-mail and phone number to ingai@sema.org.

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While honoring today's new products and innovations, industry leaders at the 2008 SEMA Show New Product Awards Breakfast also recognized great performance parts from the past. Hot Rod magazine inducted five revolutionary products—selected by SEMA members and industry professionals—into its Speed Parts Hall of Fame.

This year’s inductees are:

• Garrett Turbochargers
• K&N Engineering products overall
  
• Eaton Detroit Locker
• MSD Ignition MSD 6A ignition control
  
• Holley Performance Nitrous Oxide Systems

Earlier this year, Hot Rod compiled a list of 75 products and asked industry members to vote for the top five products they felt most shaped the specialty-equipment market. The five inductees are featured in Hot Rod's December 2008 issue (featuring Genevieve Chappell) and were displayed in the New Products area of the 2008 SEMA Show. 

In 2007, Hot Rod spotted a void in the aftermarket performance industry: the lack of a formal, permanent Hall of Fame recognizing the impact of specific performance parts on the specialty-equipment industry's success, culture and enthusiasts. The new Hall of Fame and its inaugural class was established and celebrated at the 2007 SEMA Show and as part of the Hot Rod 60th Anniversary display at the Wally Parks NHRA Motorsports Museum.

Click here to read about the 10 inaugural inductees of the Hot Rod Speed Parts Hall of Fame.

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Zoom Performance Products announced it will be consolidating with its parent company, Perfection Clutch Co. of Timmonsville, South Carolina. The Zoom facility based in Mooresville, North Carolina, will relocate to the Timmonsville offices, effective December 1, 2008.

Zoom Performance President Jim Cozzie has elected to remain in Mooresville and has submitted his resignation, also effective December 1, 2008. He will continue to serve as SEMA Chairman of the Board until the end of his term in July 2009. Cozzie can be reached in his capacity as SEMA chairman at jimc@sema.org.

Filler for eNews

With the 2008 SEMA Show in the rearview mirror, those who may not have had a chance to take it all in are encouraged to check out the links below for Show coverage from CarDomain and AutomoBlog. 

CarDomain features hundreds of images from each day of the 2008 SEMA Show and also includes a blog dedicated solely to SEMA Show coverage. Check out the photos by clicking on the links below. To go straight to CarDomain’s SEMA Show blog, click here.  

• CarDomain Coverage, Day One 
• CarDomain Coverage, Day Two
• CarDomain Coverage, Day Three
• CarDomain Coverage, Day Four 

Automoblog, an online resource for vehicle news, reviews and opinions, pictures and videos, has several features on some of the hottest vehicles at the 2008 SEMA Show. Click on links below for coverage of the RMC Scorpion Concept, Lamborghini Gallardo Twin-Turbo and more.

• The RMC Scorpion Concept
• The Kia Koup Concept
• The Nissan GT-R
• The Lamborghini Gallardo Twin-Turbo
• The Camaro LS7 Concept