Regardless of the market niche or area of specialty, one thing that all buyers at the SEMA Show have in common is the need for cost-effective and up-to-date business tools. Targeted specifically for small- and midsize companies in the automotive specialty-equipment industry, the resources featured in the Business Services section of the SEMA Show include what’s new in shelving and displays, shop management systems and software, staffing alternatives and other innovative business solutions.

The SEMA Show established the Business Services section in 2003 to provide professional industry assistance to the many small companies that help make up the automotive specialty-equipment’s $36 billion industry.

Exhibitors in the Business Services Section for 2007 (as of August 20)

• $2.95 Guys: 12912  
• AmazingMail: 13148  
• ARC United Corporation: 13315  
• Automotive Research Center of Automobile Club of S. Calif.: 12962  
• Award/Vision ps-Alpha Beta Press: 13217  
• Banazzle LLC: 13317  
• CallSource: 13216  
• Cape: 13054  
• Car-Part.com: 13140  
• Cherng Yi Hsing Plastic Plating Factory Co. Ltd.: 13253  
• Comerica Bank: 13037  
• CSi Communicator: 13361  
• Ebay Motors: 12926  
• Elantec Industrial Mfg. Co. Ltd.: 13015  
• First Pencil CXN: 12978  
• Get Nitrogen Institute: 13257  
• Jiuzhou Media Co. Ltd.: 13058  
• K&K Insurance: 12966  
• Knobbe, Martens, Olson, & Bear LLP: 13075  
• Long Range Systems: 13320  
• Mitchell 1: 13226  
• Moto Research: 13236  
• Naythons Display Fixture Co.: 13164  
• Oilchangestickers.com: 13235  
• ProGraphics: 13418  
• R.O. Writer/Progressive Automotive: 13016  
• Rent-n-Roll: 13278  
• Retail Control Systems Inc.: 13471  
• Royal 4 Systems: 13207  
• Rydepatrol.com: 13158  
• Sinobal Enterprise Inc.: 12980  
• Siriani & Associates: 13032  
• SMH Consulting: 13156  
• Southwestern Ontario Marketing: 13363  
• Stevens Davis Miller Mosher LLP: 13359  
• TransFirst: 13316  

The 2007 SEMA Show is set for October 30–November 2 in Las Vegas. For complete Show information, visit www.SEMAShow.com.  

Dates and locations for several upcoming SEMA-sponsored shows and activities have been announced. Details are:

>> SEMA Webinar: Correlating Parts Service to Customer Wants and Needs, September 13, 10 a.m. (PST)
>> SEMA Webinar: The Future of Inventory Control-RFID, September 20, 10 a.m. (PST)
>> MRC Rep Conference, September 26–27, Phoenix
>> SEMA Show, October 30–November 2, Las Vegas
>> MPMC Media Trade Conference, January 22–24, 2008, Los Angeles

Pickup sales reached 1,576,875 units during the first seven months of this year, 80% of these being fullsize models. Each one of these new pickup owners represents a potentially new, or possibly repeat, customer for specialty-equipment companies that sell products for these trucks.  With that in mind, it helps to know what pickup owners have purchased for their trucks in order to make an educated guess as to what new pickup owners will purchase. The following is a short excerpt from the 2006 SEMA Light Truck Personalization Report, which provides statistics on what parts and accessories pickup owners purchased in the past.

Although many of the percentages of installed accessories experienced minor fluctuations from 1988–2006, there were several products that saw rather large shifts.

• The heavy-duty trailer hitch experienced a 17% increase from 1988–2006.
• Running boards increased by 17%.
• Side window drip guards increased by 20%.
• The spray-in bedliner market increased 25% since 1999.
• Custom/chrome bumpers had dramatically decreased between 1988 and 1999, from 67% to just 6%. However, the percentage jumped to 20% for 2006, indicating that the custom/chrome bumpers might be regaining some popularity.
• The cap/camper shell has progressively decreased in popularity from 1988–2006, with an overall reduction of 20%.

The following table shows this data.

SEMA members can now receive their complimentary copy of the 2006 SEMA Light Truck Personalization Report as another benefit to being a SEMA member. This data-intensive report is filled with valuable light-truck specialty-equipment industry information, and SEMA members can download the report by visiting www.sema.org/research. 

Source: SEMA Research & Information Center

How has the sport-compact industry changed over the year? To help answer this question, SEMA turned to its Sport-Compact Council (SCC). The following is a short excerpt from the 2006 SEMA Compact Performance Market Report, which posts the results to this question.

SCC Questionnaire
Members of the SCC have deep-seated investments in the industry and extensive knowledge of the compact-performance market segment. They were approached to clarify this topic and called attention to important features other industry professionals need to understand. We posed this question to them:

Define sport compact. Have the characteristics of these vehicles changed over the years?

“Sport Compact: small car, small price and easy to modify. Yes, the characteristics have changed drastically from the big-winged stock cars of the past to well thought-out, faster, better-braking, all-around cars of today.” - John Bulson, Owner, So-Co MotorWorks

“Sport compact is more of a lifestyle vs. a set list of car makes and models. Sport Compact is a youth and social movement that revolves around cars as part of an individual's identity in his/her world in connection with peers. Civic, Evolution, STi, Mustang, Jetta, BMW 3 , Colorado, etc. compare to Nike, Adidas, BK, Tommy Hillfiger, FUBU, etc."  - Ed Burgy, Product Manager, CORSA Performance

“Yes, the sport compact segment has grown to include pretty much any vehicle that doesn’t have a V8 in it and is a sporty platform.” - Yoni Kellman, Marketing/Promotions, Exedy Globalparts Corporation

“Sport compact is not a definition of a type of automobile, but rather it is a term used to describe a lifestyle. Have the vehicles changed? Most definitely. The kids that started this movement in the late '80s, early '90s, have grown up, gone to college, married, got good jobs and are buying better cars (hence the current VIP car enthusiasm). But they can't go without customizing their new rides. That is the reason we as retailers and tuner shops have to adapt to the new trends or we are out of business.” - John E. Stanford, President Serenity Sound Performance

“There are new makes and models (Scion, Chevrolet Cobalt), and the cars have evolved over time, but for the most part these are still budget-minded, sporty, small-displacement cars typically with four- and six-cylinder engines.” - Mike Furlong, Operations Manager, EnhanceLoans.com

“The trend has been towards larger vehicles as vehicle manufacturers have upsized the compact vehicles. With the introduction of the new and exciting subcompact cars, there should be some change. The Honda Fit and Toyota Yaris, to go with the Scion, as well as new offerings from Nissan and Mitsubishi, could change the market. It will be interesting since Ford, GM and Chrysler have worked hard to make inroads in the import-dominated scene, and now, potentially, the scene could change to a segment where the domestic brands have no contenders or may not even want to venture.” - Brian Gillespie, Marketing and Product Development, Hasport Performance Inc.

“Sport compact can be defined as 'modern musclecars.' A sport compact was originally a Honda with springs and an intake. It has evolved into vehicles from numerous manufacturers, including Toyota, Scion, Dodge, Subaru, Mitsubishi and GM, and has also opened its arms to the new Mustang and GTO that can be seen at drift competitions. The line between sport compact and "other" has become blurry.” - Matt Jensen, Operations Manager, Motovicity Distribution

“A small, 'sporty,' foreign-manufactured car. As the popularity of these vehicles grew, so too did the level of inclusion into what became increasingly more and more of a scene. It is no longer 'sport compact;' it is now 'lifestyle vehicles.'" - Don Redmon, Replika Maschinen Inc., owner

“The definition of the term 'sport compact' has changed over the years from primarily import cars to include cars from domestic manufacturers.” - Daryl Sampson, Sales and Marketing Manager, Advanced Clutch Technology

Consumer Opinion

In April of 2006, Formula Drift hosted the first round of its series in Long Beach, California. We surveyed some of the attendees for their view of this topic. When asked which of the following would be included in this scene, they submitted answers supporting the notion that consumers associate the market moving upstream to more expensive cars with high-performance characteristics.
 

SEMA members can receive a complimentary copy of the 2006 SEMA Compact Performance Market Report as another benefit to being a SEMA member. This data-intensive report is available by visiting www.sema.org/research. 

Source: SEMA Research & Information Center

After years of ceding ground to its Japanese rivals, GM plans an aggressive offensive back into the midsize sedan segment with its new, redesigned Chevrolet Malibu. The automaker plans a $100 million marketing blitz in an effort to re-awaken interest in its midsize offering and chip away at Toyota Camry and Honda Accord dominance.

Although the front-drive Malibu of recent years bears scant relation to the venerable musclecar of the mid–late '60s, the badge remains an icon of the brand. But whether the new Malibu impacts the specialty-equipment market remains to be seen. Certainly the car is in a promising segment. A SEMA Market Research survey conducted May through July of this year revealed that 19% of respondents who planned to accessorize their vehicle owned a midsize sedan.

SEMA research also shows that in the first seven months of 2007, GM sold approximately 77,000 Malibus, making it the 15th most purchased car in the United States. That’s a 29% drop from the same period last year, however.

In 1990, domestic automakers dominated the segment, controlling almost 70% due largely to the popularity of cars like the Ford Taurus, according to Ward’s Automotive Group data sourced in an Associated Press report. Since then, Honda, Toyota and Nissan have chipped away at Big Three market share, taking the lead in 2005 with 47% of the market. Of that piece of the pie, the Toyota Camry comprises 16%, the Accord, 13%.

Perhaps most significant, the new Malibu also marks a dramatic shift away from the automaker’s dependence on the truck/SUV sales that carried them to wild profitability in the last decade. GM Vice Chairman of Global Product Development Bob Lutz told the AP that the Malibu is the best mid-market, front-drive car that the company has ever produced.

"The new Malibu will be a pivotal car for GM," says Carl Sheffer, SEMA vice president of OEM relations. "It's a historic nameplate, and GM is counting on it to be a big success. And it will lend itself to customization, especially when we can get CAD data and a measuring session for our members."

GM’s plan to trim production at half a dozen North American plants—announced earlier this week—has heightened fears that the auto industry is in for a longer U.S. downturn than many had expected, according to report from The Wall Street Journal. The slowdown is intended to minimize excess supply in the third and fourth quarter and stave off the rebates and incentives that Detroit’s automakers traditionally have used to boost sales the past six years. 

GM didn’t disclose how many fewer trucks and SUVs it would build, but the plants affected include those that produce the GMC Sierra and Chevy Tahoe, the Journal noted. U.S. SUV sales were down nearly 6% in July compared to the same period last year, while sales of fullsize trucks dipped 5%.

Rising gas prices and a crashing housing market—the latter affecting not only consumer confidence, but also truck sales to contractors—are largely held to blame.

Still, the dip in production, which could also affect Ford and Chrysler, isn’t likely to hit the specialty-equipment market too hard. SEMA research shows that even as Big Three truck sales have declined since 2004, truck accessory sales have grown: 12% in 2004, 10.2% in 2005 and 6.3% in 2006. That doesn't mean the ripples won't be felt, however.

“Most of the products that we sell are based on new truck sales,” says Competition Specialties Inc. president Ken Woomer. “With the slowdown in truck sales, this year has not been the easiest for CSI — and I’m sure I’m not alone. We [WD’s] have been a bit spoiled by tons of trucks flooding the market and sales falling in our laps.”

Still, Woomer regards the GM news – and any possible Ford or Chrysler announcements – with interest, but not alarm.

“For us, dealerships represent maybe 10-15 percent of our total volume,” he notes. “We have a very small portion of that business. So if this is a way to get [GM] profitable, I’d rather deal with that this year—get them profitable and have them there in the future!

“This is interesting news, but I’m not going to look at it as a doom-and-gloom picture. You’re still going to have people accessorizing older vehicles. Our [older model] sales are still very strong." 

While online auction sales of many individual engine components are down from the first and second quarter of 2007, one item has steadily risen throughout the year: complete engine packages.

In the first quarter, online auction sales of complete engine packages averaged $2,514,000, according to data from Terapeak, a developer of market-focused research software that monitors online sales and auctions. Sales then rose 3.6% in the second quarter thanks to a strong April that helped offset softer sales in May and June.

Through July and August, sales are up 2.1% over the second quarter.

The offerings are largely domestic, with Corvette, Viper, Mustang and even some NASCAR engine/transmission packages the most popular sellers, with smatterings of sport-compact (Honda, Dodge Neon) and diesel-truck combinations rounding out the top picks.

Do online sales tell us anything about how parts move across countertops from brick and mortar retailers? Maybe.

Patti Freeman Evans, a senior analyst who monitors the retail industry for JupiterResearch, explains that while online sales are only a fraction of actual retail transactions, the Internet is a key influencer in buying decisions.

"We see online retail plateauing at 10%–15% of total retail down the road—about double the penetration that catalogs ever got," Evans says.

She notes that as online commerce sites continue to develop more sophisticated tools to make purchasing easier and safer, some consumers will shift more of their wallet online.

"But that growth will really be organic, not dramatic. We look to the Internet to remain a highly influential channel for retailers to affect customer purchasing regardless of what channel the actual transaction occurs in."

Terapeak's Motors P&A Research provides sellers with access to comprehensive research on the past year of online auction data and allows users to get in-depth research reports on the competition and themselves. More at www.terapeak.com/motors. 

SEMA members and SEMA Show exhibitors are entitled to a free listing in the SEMA International Buyers Directory 2007–2008. This annual buyer’s guide is distributed to every international buyer at the SEMA Show, shipped to every U.S. Embassy and distributed at automotive trade shows throughout the world. The deadline to take advantage of this free listing is Wednesday, Sept. 5. A copy of the form is available online at www.SEMAShow.com/ibg. Questions? Contact Linda Spencer at lindas@sema.org.

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