Industry response to announcements about the 2007 SEMA Installation Banquet & Gala Fundraiser has been phenomenal, and one of the most oft-asked questions involves attire for the event. While formal attire is requested, feel free to leave the black-tie at home.

The SEMA Installation Banquet & Gala Fundraiser is where outgoing Board members are recognized for their service, newly elected Board members are introduced and the newest selections for the SEMA Hall of Fame are announced. Beginning this year, the event was combined with charitable fundraising activities, and proceeds from the gala will be contributed to two very worthy causes: Childhelp and the Petty Victory Junction Gang Camp.

One of the fundraising activities held in conjunction with the annual banquet is the silent auction. The silent auction features a multitude of one-of-a-kind collectibles and memorabilia. Items that have already been graciously donated include a two-night stay for two couples at the Cibolo Creek Ranch in Texas, as well as passes to the Barrett-Jackson Auction. To donate an item for the silent auction, use the PDF donation form located here.

Click here for more information on the Installation Banquet & Gala Fundraiser.

Filler for eNews

SEMAs councils and committees are set to tee off on the greens of the Strawberry Farms Golf Club as part of Council Cup - Cash for Kids, a friendly game of golf to benefit children's charities. SEMA’s Automotive Restoration Market Organization (ARMO) and Hot Rod Industry Alliance (HRIA) have lead the momentum behind the inaugural SEMA Charity Golf Tournament and they’ve challenged other councils to follow suit.

“We currently have the ARMO, HRIA, MPMC, MRC and PRO councils involved with this worthy cause and are looking to have all of the councils on board" said HRIA Chairman David Stutts. 

All groups will compete in teams of four. The current teams are:

Automotive Restoration Market Organization (ARMO)

• Ernie Silvers, Egge Machine Co. Inc.
• Jim Barber, Classic Automotive Restoration
• Dave Mihalko Jr., Restoration Specialties
• Alex Tainsh, SoffSeal Inc.

Light-Truck Accessory Alliance (TORA)

• Anne Johnson, California Truck Works
• Gary Long
• Dave Madison
• Corky Volp

Professional Restylers Organization (PRO)

• Larry Riggle, Webasto Product North America
• Kerry Howton, Arizona Sun Tops
• Bob West, Westin Automotive Products
• John LaBare, Westin Automotive Products

SEMA Businesswomen's Network (SBN)

• Luanne Brown, eTool Developers LLC
• S. Kellie Colf, Eaton Detroit Springs
• Tammy Holland, Competition Cams Inc.
• Don Colf, Eaton Detroit Springs

American Technologies and Cap World Team

• Ron DiVincenzo
• Kelly Kneifl
• Charlie Holden
• Todd Yeoman

Even if you don't play, it's easy to support your favorite council by making a charitable pledge online. Click here to pledge anywhere from $10–$100 or the amount of your choice.

If you want to tee up to help Childhelp and Victory Junction Gang Camp's charitable activities, you can form your own team. If you've already formed a team, please send us the details. For information on the SEMA Charity Golf Tournament, contact Arlene Wood at arlenew@sema.org or 909/396-0289 ext. 110.

The Council Cup - Cash for Kids is just one event representing SEMA's charitable efforts to benefit two worthwhile organizations that have become favorites of SEMA-member companies—Childhelp and the Victory Junction Gang Camp.

This year, the association included charitable fundraising activities in conjunction with its traditional SEMA Installation Banquet to form the SEMA Installation Banquet & Gala Fundraiser. Proceeds from the gala event will be contributed to two organizations. For information on the event and activities, visit www.sema.org/gala.

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

>> SEMA Webinar: 10 Steps to Your SEMA Show Plan That Will Guarantee ROI and Success, June 10
>> Aftermarket eForum, Hyatt Regency O'Hare, July 16–18, Chicago
>> SEMA Installation Banquet & Gala Fundraiser, July 27, Irvine, California
>> MRC Rep Conference, September 26–27, Phoenix
>> SEMA Show, October 30–November 2, Las Vegas

For association-related travel, contact Manya Petropaki (manya.p@travelstoreusa.com) at Travel Store USA, 949/930-9268.

SEMA-members companies have posted several new listings for job opportunities at www.sema.org/classifieds. Working for a SEMA-member company has many advantages. In addition to working for a company that supports and contributes to the success of the overall industry, being employed by a SEMA-member company enable the employee to participate in webinars, access free market research, join SEMA committees and more. The newest classified listings posted under Positions Available include:

• Sunroof Installer, San Antonio, Texas
• Financial Controller, Torrance, California   
• Graphic Artist/Designer, Norco, California
• Sales Manager, San Diego, California

According to a recent Consumer Reports poll, facing soaring gasoline prices, American car buyers definitely want more fuel-efficient vehicles but may not be ready to give up size, range, performance or other amenities to achieve that goal.

The Auto Pulse survey, conducted by the Consumer Reports National Research Center, polled a nationally representative sample of 1,804 people via telephone April 26-30, regarding issues concerning gas prices and trade-offs they might be considering. Participants had to live in a household that owned at least one vehicle.

The survey came just three weeks before the national average gas price spiked to a record $3.22 per gallon of regular unleaded gas on May 21. That is $.326 more than at the same time last year, and nearly as high, after adjusting for inflation, as the all-time record set in March 1981.

Even before the surge, gas prices were already on the mind of the roughly one-in-five respondents who planned to purchase a new car during the coming year.

Among that group, nearly seven in 10 said they would seek a vehicle with better fuel economy than their current model. Nearly half would consider a diesel, hybrid or flex-fuel vehicle (the latter can run on gasoline, E85 or any gasoline-ethanol blend), whereas only one in nine primarily drive such cars now.

Car buyers were wary, though, when asked what they would be willing to sacrifice in order to achieve higher miles per gallon. A bare majority (52%) said they would give up vehicle size or capacity. Somewhat fewer would trade off range (49%), performance (48%) or amenities (44%).

Forty-two percent said they would be willing to pay more for a fuel-efficient car, and 31% would pay more for special fuel.

The answers reflect the challenge consumers face in a market filled with large, gas-guzzling vehicles where buyers seeking to improve fuel economy often must pay extra-typically about $3,000-$4,000 more for a hybrid model as compared to a similar conventional vehicle. Selection is also limited; survey respondents in the market for a car but who aren't considering a hybrid said selection and price were the main reasons.

Indeed, the survey revealed a desire to be environmentally responsible. Among all car-owning respondents, some 60% said they were either concerned or very concerned about the environment versus only 6% who said they were not concerned. Nearly three-quarters said they would drive more slowly, or even drive less, to conserve gas because of high gasoline prices.

But consumers also said gas prices would have to go even higher before they would make major changes in behavior. On average, car owners said prices would have to rise to $3.90 per gallon before they would "drastically" reduce their driving. The survey found that drivers in the West and those with incomes of $75,000 or more would resist gas prices longer; for them, it would take a price of $4.50 per gallon to spur dramatic change. Older people and those with incomes under $40,000 were more vulnerable; the majority said they would make drastic cutbacks in driving at an average price of only $3.50.

As consumers are faced with higher gas prices, they shift towards buying vehicles that will help save them money at the pumps. However, SEMA research finds that enthusiasts continue to spend money on specialty equipment in times of fluctuating gasoline prices even though vehicle preferences change.

Source: Consumer Reports. (May 24, 2007). "Consumer Reports Poll: Car Buyers Seek Fuel Efficiency, But Remain Wary of Tradeoffs." Consumer Reports press release courtesy of PR Newswire

SEMA staff hosted a Focus Panel at the Old Bridge Township Raceway Park in Englishtown, New Jersey, in May to learn about consumer behavior. With the NHRA Springnationals and the D1GP both holding events during the same weekend, the venue attracted enthusiasts from the drag racing and drifting crowds and provided an opportunity for consumers and industry professionals to discuss important topics circulating through our industry. From opinions on product development to consumer-manufacturer communication, the event was a valuable learning tool for people on both sides of the isle. Below is a sample of selected topics that were discussed during the focus panel.




What was your first engine modification?

Not surprisingly, the most common modification enthusiasts chose to modify first was the air intake system. More than 75% of the panel claimed to have done so. They held the view that changing the air intake was the best bang-for-the-buck choice and easily increased performance with little effort.

In what category will you spend the majority of your money in the next 12 months?

Given that participants from the panel were pulled from racing environments, their responses were customary for performance enthusiasts. Engine performance parts were the clearly the favorite since 75% of enthusiasts stated to target this area for improvement in the coming year. Drag racers and drifters alike value power, but the discussion also noted that suspension parts are critical for those people involved with drifting.

How much money have your spent in the past 12 months modifying your car?

Panelists indicated that their financial situations do dictate how deeply involved they can become in their hobby. Nevertheless, they spend a considerable amount of their money on car parts and services. Roughly 26% of the group said they spent between $1,000 and $2,500 in the past year. The more advanced people, 38% of the group, claimed to have dropped $5,000 to $10,000 last year. Finally, the group comprised of the most dedicated racers, they ran up bills well above $10,000 for the year. These estimates might be higher than the typical consumer when you factor in their level of participation, but the reality is that the segment is still full of passionate and committed people.

Price vs. Quality? How much is "good enough?"

Panelists were asked where they drew the line regarding part costs and quality. The purpose was to determine how important price was in their buying decisions and to learn if quality is the primary factor, regardless of costs. Half of the panel stated that when they shop for new parts they only buy the best. This significant perspective illustrates that consumers have grown tired of substandard or faulty parts and are willing to pursue the best products on the market. The caveat is that they then use the Internet to track down lower prices on the parts they have decided to buy. Only 13% claimed to look for the lowest price possible without considering quality. The subsequent discussion highlighted that most people were more interested in getting the right part the first time rather than replacing a lesser-quality part down the road.

Having a presence online

The most important bit of information revealed during the discussions was that companies must interact with consumers directly. Through websites, forums and social communities, your company must be willing to spend time where consumers spend a considerable amount of their time: online. To be competitive in this market each company must build and maintain an online presence. Advertisements, web banners and other forms of traditional marketing have lost some of their bite. Also, explicit advertising or product preaching within forums can turn the mood sour quickly. Instead, consumers would rather have direct dialog with someone representing a company for help, problem solving or other suggestions.

Another motivation to get online is for reputation monitoring. Consumers have replaced clubs and word-of-mouth information with online forums. A brand's image can be made or broken by the opinions of anonymous forum members, and companies need to be vigilant over the information that is tagged to their brand. If misinformation or concerns become public, you need to be active to support and represent yourself in a positive light. In a way, this is a new brand of customer service that you should adopt.

The Focus Panel's are supported by SEMA's Sport Compact Council (SCC) and are open to SEMA members as a valuable informational tool. They are held periodically throughout the year at various venues around the nation. For more information or to become involved please contact Paul Moritz at paulm@sema.org.

U.S. consumers still love big vehicles, and even though gasoline prices are averaging $3.20 a gallon across the nation, they will probably continue to buy big vehicles, according to a recent article in The Detroit News. However, the article states that the overall U.S. market could drop slightly as some consumers wait until gas prices drop before making a new-vehicle purchase. The article quotes Jesse Toprak, senior analyst for the Edmunds.com auto website, as saying that "it really didn't seem like the gas prices had a direct impact in May," as he analyzed sales data for the first three weeks of the month. "It seemed like people almost got used to it," Toprak notes. Because of rebates and other incentives, light-truck sales will likely increase compared to May 2006 sales, based on analysis of the first three weeks of new-vehicle sales this month.

The article notes that people tend to buy more fuel-efficient vehicles when gasoline prices get higher, but 0% financing and cash rebates have kept SUV and pickup sales afloat. Consumers rationalize that the money saved will go to paying for the added fuel expense. Ford and GM sales are expected to experience double-digit drops this month, but these declines are expected to result from cuts in rental company sales. On the other hand, analysts expect Chrysler sales to jump 7% in May. Analysts also predict small declines for Honda, Nissan and Toyota.

Despite expected near-future declines for new-vehicle sales, Global Insight predicts 2008 new-vehicle sales will rebound. Light-vehicle sales will rebound next year after dipping to 16.2 million in 2007. They say that U.S. new-vehicle sales will not hit the 17-million level last seen in 2001 until 2010. By 2012, sales will climb to 17.7 million. According to Global Insight's forecast, the Detroit three will lose seven points of market share between now and 2012. Imports, on the other hand, will gain market share as they rise from 3.7-million units sold this year to 4.4 million in 2012, according to their forecast. Finally, Global Insight says they expect oil prices to stay above $60 a barrel over the next five years, which will affect the overall mix of vehicles sold each year.

Sources: Krisher, Tom. (May 25, 2007). "Americans Still Buying Bigger Models." The Detroit News/Automotivedigest.com. Retrieved May 31, 2007 from www.automotivedigest.com; James B. Treece. (May 23, 2007). "Forecaster: Sales Will Bounce back; Detroit 3 Might Not." Automotive News. Retrieved May 31, 2007 from www.autonews.com.

With U.S. regulators looking to revise fuel-economy standards amid concerns for energy security and greenhouse gas (GHG) emissions, the combined annual diesel and hybrid gasoline vehicle sales in the United States will be $2.7 million by 2012, according to a recent press release by Ricardo, a strategic consulting firm for the automotive industry.

At present, hybrid gasoline technology appears to be the preferred route in the United States, partially due to its attraction as a visible badge of green awareness amongst higher income purchasers, says Ricardo. Many OEMs plan to launch hybrid products in the next few years, but the company notes that this technology faces substantial manufacturing-cost penalties, which are unlikely to be eroded, even in mass production. Ricardo further comments that diesel has a clear cost advantage over hybrid, even when fitted with the type of complex exhaust after-treatment technologies necessary to meet future, more stringent emissions regulations.

Diesel already dominates in Europe, Ricardo reports, and the conditions may now be right for a big acceleration in diesel sales in the North American market. Ricardo forecasts that combined diesel and hybrid gasoline will represent 15% of the U.S. light-vehicle market by 2012, with sales of diesels outstripping gasoline hybrids by 1.5 million units versus 1.2 million. 

According to American Automobile Association (AAA) data, there are now 4.8 million diesel cars on U.S. roads, and J.D. Power and Associates predicts diesel vehicles will reach 10% of U.S. sales by 2015, triple that of 2005 levels. The gap between diesel and gasoline prices has not been as wide in a decade.

The national average reached $3.21 for a gallon of gas as of May 25-up nearly 33% from the same time last year, according to U.S. Energy Information Administration (EIA). Ultra-low sulfur diesel (ULSD) stands at $2.80 a gallon, according to the EIA. ULSD, which contains 15 sulfur parts per million or less, has only been available nationwide since October so there is no direct comparative. However, average prices for all highway diesels are down almost 9% versus last year.

The ongoing pattern for diesel prices is exactly the converse of gasoline. Typically attuned to the winter supply and demand of the home-heating oil market, diesel prices usually taper as summer approaches and increase during the fall. Meanwhile, gasoline continues to surge as vacation season begins, and oil companies say their refinery infrastructure is still hobbled from the hurricane destruction of nearly two years ago.

The Washington, D.C.-based Diesel Technology Forum (DTF) took the opportunity to issue a press release noting the 40%-plus pricing disparity. Coupled with the 20%-40% fuel-economy efficiencies inherent with diesel powertrains over gasoline, the state of diesel prices is all the more reason for consumers to switch to oil burners, the advocacy group contends.

"We're basically back to where we were a decade ago," said Allen Schaeffer, executive director of the diesel advocacy group told Diesel Forecast. But as surging worldwide demand for all petroleum remains a constant in the equation of fuel prices, Schaeffer does not expect the diesel-favored trend to last. "I would not be surprised to see this dynamic go back the other way...that's just been the typical patterns for the last few years," he said.

ULSD prices have grown in 2007, but at a modest 13% since the start of the year. According to the EIA, the average per-gallon price for ULSD was $2.51 in February, rising to $2.68 in March and $2.85 in April.

"The influx of diesels in North America is not going to be tomorrow," said Paul Lacy, powertrain analyst with Global Insight. "So there's some pressure on how much of that the refiners are going to have to absorb. The problem is from (the oil companies' perspective) is you can't go backwards in the refinery process. You can go from diesel to gasoline but you can't go from gasoline to diesel."

Some oil giants are responding, including Marathon Oil Corp., which announced in April it would construct a $3.2-billion addition to its largest refinery in Garyville, Louisiana. That facility currently processes twice as much gas as diesel. However, when the edition is complete in late 2009, Marathon said it expects to produce equal amounts of diesel and gas. 

Fred Rozell, a retail gasoline/diesel analyst for the Oil Price Information Service-a petroleum industry pricing news and information firm that supplies data to AAA, said the seesaw effect of gas versus diesel prices will even out as production does. "I think eventually the majority of the U.S. (auto) fleet is going to be running on diesel," said Rozell, who is even more bullish on diesel's market penetration than JD Power and Associates. "The transition where half the vehicles are running on diesel and half on gasoline is going to be difficult."

And when will that transition hit? "It's going to be a long period, over the next 10 years," Rozell said.  One more federal requirement may play a role in spiking diesel prices later this year. June 1 is the deadline for refineries to begin shipping low-sulfur diesel for off-road vehicles, such as construction and farm vehicles and machinery. That grade of diesel will reduce sulfur levels from 2,500-3,500 parts per million sulfur to 500 parts per million. The Environmental Protection Agency (EPA) requires off-road fuel to be available for sale by October.

"You've got that clamp coming down on the off-road group as well, and I think that's going to be a driver in bringing diesel prices back up," DTF's Schaeffer said. All of the pricing pressures could weigh on diesel-intending consumers, who usually pay $1,000 premium for diesel powertrain light-duty vehicles over their gasoline counterparts. "How fast you re-accrue that investment is directly dependent on fuel prices," Schaeffer said. "The circumstance you worry about is a $.50 gap (favoring gasoline)."


Sources: Ricardo (May 24, 2007). "Diesels Set to Out-Strip Hybrids in Accelerating U.S. Growth." Ricardo press release courtesy of PR Newswire; Scott Anderson. (May 2007). Diesel, "Gas Price Gap Widens." Dieselforecast.com. Retrieved May 31, 2007 from www.dieselforecast.com.

The following is a short excerpt from the "2007 Trends and Forecasts Quarterly Update-Q1."

Did your sales grow last year, and was this growth on par with the rest of the specialty-equipment industry? What products are hot sellers, and what are the major obstacles specialty-equipment companies face running their businesses? Although you probably know the answers to these questions as they pertain to your own company, benchmarking how your business performs compared to others in the specialty-equipment industry is another valuable tool to gauge your company's performance. SEMA recently asked its members these questions as part of its annual SEMA-member survey, which tracks industry trends from the perspectives of those entrenched in the specialty-equipment industry.

According to the latest data, 36% of SEMA members indicated that their company's sales grew "moderately more," while 17% said that sales improved "greatly more" in 2006 compared to 2005. And while two out of three SEMA members surveyed indicated that they experienced growth in new customers last year, approximately three-quarters of the respondents said that growth in supplier costs was part of doing business in 2006.

Responses from the SEMA-member survey suggest that operating costs and cash flow seem to hinder businesses the most, followed by the current state of the economy and counterfeit/knock-off products. While each of these obstacles represent several business issues, it's important for business owners and managers to look at these numbers in comparison to their own businesses. This will provide some insight into areas most in need of attention and/or improvement, thus helping overall business growth.

Appearance and vehicle-body accessories top the list of products sold by SEMA members. The accessories and appearance market segment of specialty equipment has grown substantially over the years to reach $6.94 billion at the manufacturer level in 2005. Part of the reason for this growth comes from the fact that automotive customization has grown in popularity among mainstream automobile buyers. Recent SEMA research showed that over the first three months of this year, nearly one out every 10 (9%) consumers surveyed planned to purchase accessory and appearance products. This translates to slightly more than 10 million U.S. households planning to purchase some type of appearance accessory for their cars or trucks. 




The light-truck market is the largest market segment of specialty-equipment parts and accessories sold in the United States. In 2005, sales at the retail level reached $11.72. The rise in popularity of pickups, SUVs and CUVs has created growing demand for products to customize these vehicles. Results of the SEMA-member survey showed that nearly one out of four (24%) receive the greatest amount of sales revenue by selling products for this market. These companies, as well as most of the SEMA members surveyed, agreed that 2007 will be a year of growth. Roughly 70% of those surveyed said that they expect at least some positive growth this year.

The "2007 SEMA Trends and Forecasts Quarterly Update-Q1" is filled with valuable statistics showing SEMA-member benchmark data, sales trends for various vehicle segments and more. SEMA members can receive a complimentary copy of this update by downloading it from www.sema.org/research or by contacting Shirley Presecan at shirleyp@sema.org.

Source: SEMA Research & Information Center