Hundreds of members joined the SEMA Virtual Town Hall Meeting earlier this week, which provided updated information from SEMA leadership on top industry programs.
During the 30-minute meeting, SEMA Vice President of Events Tom Gattuso shared positive news about the status of the 2021 SEMA Show taking place in November, while PRI President Dr. Jamie Meyer gave viewers updated information about several exciting initiatives, including the PRI Trade Show, a new PRI Membership Program and the PRI Road Tour.
SEMA Director of Emissions Compliance addressed resources available to help manufacturers meet CARB and EPA compliance, while SEMA Vice President of OEM and Product Development Mike Spagnola reported a new purchase of a 45,000-square-foot building in Michigan which will be used as a second SEMA Garage.
Members are invited to view a recording of the meeting, which also included SEMA President and CEO Chris Kersting and SEMA Chairman of the Board Tim Martin answering questions from viewers.
SEMA, the Performance Racing Industry (PRI) and 17 other organizations representing live recreation and amusement venues sent a letter asking the U.S. Small Business Administration (SBA) to expand the Shuttered Venues Operator Grant (SVOG) program to include motorsports, horse racing, recreation events and mobile amusement. The COVID-19 pandemic and associated attendance restrictions have posed significant challenges for racetracks and other live entertainment operators, as many states have placed restrictions on the sizes of gatherings that continue to impact the operations of entertainment businesses. SEMA and PRI are focused on helping racetracks, as they play an important role in providing entertainment and a sense of community across the United States.
Congress created the $16.25 billion SVOG program to assist live entertainment and performing arts venues that have experienced significant revenue declines as a result of COVID-19 attendance restrictions. However, the SBA did not include racetracks and many other forms of live entertainment in the list of groups that are eligible to apply for grants.
The Coalition is asking the SBA Administrator to reconsider its eligibility guidance for the SVOG program. SEMA and PRI are also working with Congress to amend the SVOG through legislation to include recreation, sports and amusement live venues. It is important that members of Congress hear from SEMA members about providing financial support to racetracks. To send a letter to your lawmakers in Washington, D.C., please click here.
For details, contact Eric Snyder at firstname.lastname@example.org.
The Biden Administration finalized a new rule to withdraw the independent contractor regulation issued in the closing days of the Trump Administration. While the issue may be revisited in the future, the U.S. Department of Labor (DOL) is currently reverting to previous guidance on distinguishing whether an individual should be classified as an independent contractor or employee. Specifically, the DOL is deferring to the seven-factor “economic realities” guidance test issued in 2008 and based on court cases. Factors to be considered include:
The extent to which the services rendered are an integral part of the principal's business.
The permanency of the relationship.
The amount of the alleged contractor's investment in facilities and equipment.
The nature and degree of control by the principal.
The alleged contractor's opportunities for profit and loss.
The amount of initiative, judgment or foresight in open market competition with others required for the success of the claimed independent contractor.
The degree of independent business organization and operation.
The increase in independent contractors in recent years who perform on-demand services, such as drivers and other gig workers, has placed a focus on the definition. Company employees have protections under the Fair Labor Standards Act (FLSA), such as minimum wage and overtime compensation that do not apply to independent contractors.
For more information, contact Stuart Gosswein at email@example.com.
The SDC Data Excellence recognizes the companies that have worked with SDC to recreate and relaunch industry-leading product data sets. Here are products from current SDC members that have achieved data excellence.
H/E Series Twin Screw Brushless Pumps
Fuelab upgrades its H/E Series 474xx, 617xx and 939xx twin screw brushless pumps to offer 600-lph options capable of supporting 1,500 hp on gas and 1,000 hp on E85 in a single pump configuration.
H/E pumps provide extremely low current draw, superior priming capabilities and greater resistance to cavitation.
The M-Series retractable truck bed cover provides you the security of a hard cover, smooth appearance of a soft cover, and convenience of a retractable cover. Its durable vinyl-over-aluminum hybrid design is dedicated to four season protection and optimal bed security.
It tackles durability while remaining exceptionally easy to operate with its unique frictionless construction and insulated grip lever. Simply use its key to unlock and begin to open towards the cab as it retracts into its compact canister.
The M-Series locks in multiple open positions along the truck bed and can open, lock and close without even opening the truck’s tailgate. Roll-N-Lock’s M-Series retractable truck bed cover has a quick and easy install, are made in the USA, and backed by a three-year warranty.
The American Roll Cover manufactured by Truck Covers USA is considered the toughest, most durable, and best-looking, retractable aluminum cover available on the market. Built on customer feedback and experience, it has superior style, is easy to operate, and versatile. Add our unique toolbox-cover combo, the American Work Cover, or our one-of-a-kind Work Cover Junior with a toolbox that takes up no more bed space than that of a canister.
With the addition of the American Rack System, the most sophisticated rack system available, your truck cover becomes next level! When work is done, bike those mountains, ski those slopes, camp, and more without compromising the functionality of your American Roll Cover.
SEMA eNews highlights new products from industry companies each week. To have your product considered for upcoming issues, send product press releases to firstname.lastname@example.org.
E3 Spark Plugs
Lithium Powersports Batteries
E3 Spark Plugs, the makers of the patented DiamondFIRE Technology spark plug, announces the introduction of a new line of lithium phosphate powersports batteries. Born from cutting edge nano-scale materials, E3 Lithium promises to redefine power delivery in the powersports world.
Initially the product line features eight offerings, ranging in power output from 140 to 760 Cold Cranking Amps and covering a wide range of applications, including motorcycles, ATVs, UTVs, side-by-sides, snowmobiles, personal watercraft and more.
Some of the performance benefits of the E3 Lithium line of powersports batteries include:
80% lighter than traditional batteries.
3x longer life than traditional batteries.
Charges much faster than traditional batteries.
Delivers much quicker starts than traditional batteries.
IP 66 Environmental Rating (pressure washer friendly).
Mounts in any position.
E3 Lithium Batteries feature an integrated Battery Management System (BMS) that maintains constant cell balancing to ensure that the output of the individual lithium packs inside the battery maintain equal output and charge levels at all times. In addition, the BMS offers the following model specific attributes to ensure years of trouble-free power delivery from your E3 Lithium Battery.
Short Circuit Protection.
Excessive Cranking Protection.
Built-In Cell Balancing Technology.
LED Battery Fault Light Indicator (select models only).
General Tire has entered the all-weather tire market with its newly released AltiMAX365 AW, a versatile all-weather touring tire for passenger cars and crossovers. At launch, this new passenger tire is available in 52 sizes, ranging from 15-in. to 20-in. rim diameter, all with Three-Peak Mountain Snowflake certification for severe winter service.
The AltiMAX365 AW is targeted toward drivers who want a versatile tire providing best-in-class all-around performance. and optimal traction in deep snow compared to typical all-season tires. With balanced performance on dry and wet roads, this new offering allows drivers the freedom to drive on one set of tires year-round, saving them the cost and inconvenience of tire changes twice a year.
General Tire’s Visual Alignment Indicators in both sides of the tread wear off evenly, ensuring the driver of proper alignment, or wear off unevenly, alerting the driver to check the wheel alignment. Additionally, a symmetric tread pattern allows for the tire to be rotated, promoting long, even tread life. It also features a 60,000-mile limited treadwear warranty and is backed by the 45-day customer satisfaction trial.
Exhaust Coatings Available in 10 Colors
KBS Coatings offers XTC Silicone Zinc Primer and XTC Xtreme Temperature Coating to provide great looking, durable, and long-lasting finishes on exhaust manifolds, headers, and exhaust systems. Both are available in aerosol spray can form, and quart, gallon and 5-gallon containers for brushing, rolling, or spray equipment.
XTC Silicone Zinc Primer can withstand temperatures over 1,200° F and provides incredible rust protection even in high humidity, high condensation, and salty air conditions. The primer functions much like galvanization and locks itself to bare metal surfaces leaving a matte gray finish that can be used as the finish paint, or as a perfect primed surface for top coating with XTC.
XTC is a high-temperature and heat-resistant coating that protects metal surfaces operating at 500° F to 1,200° F. With proper preparation, XTC provides outstanding adhesion, film integrity, weathering, thermal shock-resistance and is guaranteed not to burn off. XTC will not peel, flake or chalk and is resistant to scratching or marring.
XTC is available in 10 unique and great colors, and XTC Clear is available as final coating for any XTC matte color when a gloss finish is desired. If rust protection is not needed, XTC can be applied directly to metal without need for XTC Primer.
Amber LED Side Marker Lights for Jeep Wrangler and Gladiator
Metra Electronics has added even more aftermarket products to their growing line of Jeep accessories. These new products provide stylish yet functional upgrades for the latest Jeep Wrangler or Gladiator models.
Amber LED Side Marker Lights for Jeep Wrangler and Gladiator (JP-SML2) replace factory side-marker lights with an easy-to-install solution that is plug-and-play with all of the ’18-up Jeep Wrangler JL and Gladiator JT trim levels. It includes an integrated anti-flicker feature with a smoked crystalline lens for a stylish upgrade. The amber LEDs provide better visibility with 13.5 watts and an internal reflector for an even brighter output than the factory marker lights.
Classic Line Oils for Collector Cars From '50-'99
Motul has introduced a new Classic Line of lubricants that are specifically formulated to meet the needs of both established and emerging collector car markets. With vintage vehicles in mind, Motul’s Classic Line combines oils, detergents, and additives engineered to enhance the performance of older powertrains while offering improved protection.
All Motul Classic Line lubricants feature an additive package with high-zinc (ZDDP) and molybdenum (moly) for reduced friction and increased power. The synthetic base oils and adapted detergent levels of each Classic Line formula are further suited to the metals and gasket materials common to each era of vehicle manufacturing; advanced additives ensure that all Motul Classic Line lubricants meet or exceed API standards. The high-adhesion properties unique to the Classic Line also provide for excellent cold flow properties to prevent engine wear during start-ups and to coat and protect engine internals and running gear during the periods of prolonged storage that collector vehicles often experience.
Vaughn Gittin Jr. and Loren Healy Talk Racing in 2021
By Carr Winn
When SEMA News caught up with Vaughn Gittin Jr. and Loren Healy via video conference, it was their first chance to catch a breath in weeks. Both drivers were dusting off from King of The Hammers and couldn’t wait to start sharing comments about the race, the new Bronco and the SEMAification of electrics.
The dynamic duo also now represents a new brand, Fun-Haver Off-Road, and it’s their rally cry in 2021. In fact, they were set to have more fun off-road just after our interview, packing up their families and heading to Easter Jeep Safari in Moab, Utah. Below are a few excerpts from our seat time with two of off-road racing’s fiercest pilots.
SEMA News: Let’s talk King of The Hammers. What was the experience like this year?
Vaughn Gittin Jr.: King of The Hammers was incredible this year. Loren and I both have new race trucks in the hopper right now, but we weren’t able to get through durability testing to debut them, so we raced our trucks with new Bronco bodies. My co-driver got injured, and so—fortunately for me—Lauren’s co-driver Jesse Amyx was not racing 4400 and hopped in with me. We had an incredible race, very clean. We were on pace, and Loren and I went back and forth a few times. I’m not going to lie. He was certainly faster than me, but he kept destroying drive shafts. It was really cool to be there with not only my teammate but also someone who has been helping me excel in this world so much. It was a lot of fun talking smack on the radio with each other. We ended up finishing fifth, my best finish yet. Already thinking about next year.
Loren Healy: It was definitely a fun week. One of the highlights was Ford having Broncos out on the lakebed for everybody to go for some rides. The excitement of people as they got out of the Bronco was really neat to watch, and I had a little bit of the same experience. That was my first time actually to drive the Sport in the off-road community, and the Sport continues to wow me.
Also, this was the first year for the electric vehicle class. There was only one vehicle running in it, and they’re kind of catering to it a little bit, making the course doable with battery life. It was only about 75 mi., but the truck finished the race, which to me is really, really neat. Hopefully, that will drive some of the OEMs to get involved with it as well, and we’ll see a handful of electric vehicles out there racing King of The Hammers in the years to come. I know it’s piqued our interest, and with Vaughn’s experience with the Mustang Mach-E, we would love to be involved with that.
SN: What are fans most excited about for the 2021 season? And what’s got you excited to go to work as drivers?
LH: I think the fans are just excited to be back out and part of it, especially the off-road community that thrives on being outdoors. We’ve really seen that at the events that we’ve been getting to go back to—like almost twice the attendance of the spectators—because they can’t go to the movies, and they haven’t been able to go out to dinner and do that type of stuff. They need something right now. They’ve been just so excited and so passionate, even more so than they were. Maybe they took that stuff for granted, and now it seems like the excitement is really high, being able to get out and be a part of it.
VGJ: At the end of the day, what we’re doing is entertainment. We’re entertaining, creating a show for people. We’re behind the wheel racing and working our butts off trying to make magic. They’re enjoying the entertainment, the show that’s a result of that. The time behind the wheel is what we earn through the effort of the business and all the things that are required to make it happen. I can honestly say that any day behind the wheel is very fulfilling to me personally, and it makes the travel away from the family and the other normal life compromises that you make all worth it when you get behind the wheel and just kind of get to let loose.
I can’t say that it’s the same for everybody, but I think I can say for Loren and myself, this is what we are meant for. This is our purpose and what we do and we enjoy it. I think that comes through in our driving and in our content.
LH: Definitely lucky to be able to turn our passion of what we love into our jobs and wrap our whole lives around it, and there are days that you’re like, man, this is brutal. Working 20-hour days, getting ready to go to the races, no days off for months at a time—it’s not all roses all the time, but we’re so lucky.
SN: Any special moments this season that really keep you focused when it’s one of those “brutal” days?
VGJ: I’m a professional fun-haver, right? But part of that is sharing fun and bringing joy to other people. It’s a huge fulfillment to me personally. It really, really fills my cup and my heart. All last year, the nonstop DMs and comments and when we would see people in person [we’d hear], “I love what you’re doing, keep it up. You don’t realize how big of an impact and how much of an inspiration you are.” I don’t do it for that, but that stuff feels good. It’s just crazy. It’s humbling that you can do something that you love so much and make such an impact on other people, so there’s not one thing that stands out. It’s just a constant, and I’m grateful to have those reminders of people reaching out and sharing their feelings on that.
LH: We had an event about October, the Off-Road Expo, where they typically get 5,000 or 10,000 people through the gate during the weekend. When we got there Saturday morning, there were 20,000 people lined around the gate who had just been missing this and needing it so bad. Unfortunately, the show actually ended up getting shut down because they just didn’t feel comfortable, but to me, that was really eye-opening and made me really miss it as well.
It’s one of those huge things with those 20-hour days, to get that fan who DMs you and just tells you how grateful he is for the things that you do and that they’re living their life vicariously through you, dreaming of getting to do that someday. It fuels our fire for sure.
SN: If you were trying to convince someone to give an electric vehicle a chance, what would you say?
VGJ: I would just tell them to go drive it. Like the Mustang Mach-E, for instance. A lot of the Mustang community is mad that the car has a pony badge on it. If anyone, I should be mad. I’m a Mustang guy to my core, but the acceleration is unbelievable. Because of the low center of gravity, the handling is something like you’ve never felt in an internal-combustion car except for super cars. The battery is in between the axles, inches from the ground, and the car just turns. It feels unbelievable.
I was that guy. I was that guy like—whatever—let me go here to my 1,200hp V8, that makes awesome sounds and bad-ass acceleration. I’ve been shifted. I’ve been swayed, and my increased love and passion for electric and these technologies is just a result of that. I got a taste of it, and now I’m like, “Oh, what can we do next?” It’s just like getting in a stock car.
We’re SEMA, right? This is a SEMA conversation, and what we do is take what these manufacturers do and make them more fun and exciting and personalize them. For me, I’m just as excited about doing that with electric vehicles as I am with the internal-combustion vehicles I’ve been playing with for the last 20 years.
LH: That definitely got me excited and thinking, “How can I tune it? What can I do to try to make that vehicle more fun on the streets? Or how I take it off-road?” You have to kind of convince people that sometimes new technology isn’t exactly the way they see things, but once we can start making it cool and show them that they can do fun stuff in their vehicles, they’re going to want to do it. The way technology is changing is for a reason, because it’s better. As people are educated and learn that, they’ll get more excited about it for sure.
Optimizing Your Brand Experience to Attract and Retain Female Customers
By Douglas McColloch
While the specialty-equipment aftermarket has traditionally been a male-dominated profession, the demographic landscape has changed markedly in recent years, and nowhere more so than in the consumer sphere, where women make up a sizable plurality of purchasers. A 2014 study by United Parcel Service found that women account for some 40% of all online auto-parts sales, and a 2018 SEMA “Young Accessorizers Report” found that nearly one-third of accessorizers under age 25 are female, so women consumers clearly comprise a healthy market segment that specialty-equipment companies would be wise not to overlook.
But marketing to male and female consumers is not necessarily a one-size-fits-all proposition. There are profound differences in how men and women operate in the retail space. Understanding the impact women have on purchasing decisions and how the physiological differences between men and women can drive those decisions was the subject of a recent SEMA360 Education webinar, “Earning Her Business.”
Presented by brand experience expert and public speaker Katie Mares, the session explored the subject in greater detail, with the aim of helping companies optimize their customers’ brand experiences to positively affect customer satisfaction metrics, increase retention rates and referrals, and improve a company’s bottom line. What follows is a summation of the webinar.
Women influence more than 80% of all purchases in the home, accounting for some $30 trillion in worldwide spending.
“Not only does she influence the purchases of her girlfriends but also the purchases of her spouse, her significant other, her sister, her brother, her mother, her father and her children,” Mares said. “A problem arises when one considers that women have been underserved and sometimes unserved altogether in the automotive retail space. We aren’t treated like an actual consumer base that is worthy of an experience that we like, that we want to interact with.”
The answer? Mares advised retailers to “move away from the transactional experience that you’re probably currently giving to your consumers, especially to your female consumers, and go from transaction to interaction.”
Due to the fact that the automotive space remains dominated overwhelmingly by men, particularly at the executive/decision-maker level, “a female’s customer experience is still primarily designed by men, created by men, and delivered by men for men, but women are the ones who are influencing most of the purchases. When you create a [retail] experience she can’t live without, you’re winning not only her heart, her mind and her wallet, but you are also earning the hearts and minds and wallets of everyone who surrounds her. Women are the original social media.”
Mares also reminded that women account for more than 60% of automotive service requests and more than 60% of new-vehicle sales in North America, “so she has the right to demand an experience that speaks to her needs.”
How to optimize your brand experience to attract and retain female customers? Mares offered a few tips.
Understanding your female consumers means understanding their life stage, not simply their age.
“You want to break down your customer segmentation, and not just by age, because age doesn’t really matter anymore,” Mares continued. “You want to take a look at her position in life—the stage that she’s in. That means that you want to ask: ‘Is she single? Is she married? Does she have children? Is she an empty-nester?’ All of those things have and hold way more merit than whether she is 30 or 45.”
Women are getting married later in life, Mares noted, “so you can no longer look at a 30-year-old woman and assume that she’s married with children, because she’s probably not. But what you do want to discover is if you have a single woman who has different needs and goals to obtain than a woman who has just married and bought her first house or a woman who is an empty-nester and all her kids have just left the nest. How those women each spend their discretionary income is much different, so you can’t assign an age to those stages anymore.”
In Mares’ opinion, one key element to create an optimal personalized experience for female consumers lies in understanding differences in physiology—the different ways that men’s and women’s brains are hardwired and how that affects their purchasing decisions.
“A woman’s limbic brain is double the size of a man’s,” Mares explained. “That’s the emotion and memory hub of our brains. If you ever wonder why your wife, your sister, your mother or any female in your life remembers a fight in great detail from five years ago, it’s because she’s physiologically built to do so.”
Another key difference:
Women communicate using both sides of the brain; men, only one.
“Women communicate with both sides of their brain—logical and creative,” Mares explained. “Men communicate with only one side—logic. When a man drops off a vehicle for service or to purchase something, he’s got his goal in mind. He comes in; he does it; he leaves. Women, on the other hand, need a much more hedonic experience—an atmosphere of the senses. It’s what we see, smell and feel—the temperature of the room, the lighting, the dirt or dust on the floor.
“How you make her feel as a customer, as a woman, is really important to creating an experience she can’t live without.”
Men, by contrast, like “utilitarian experiences—A to Z in a logical, chronological order. Women need to feel something. They need to talk about what they’re thinking; they need to share their experiences and they need more detail. That’s the creative side.
“But she’s also very logical. She knows what she wants—she just takes a roundabout way to get there. When you put those physiological differences at the forefront of designing your experiences for the female consumer, it helps you greatly to understand and to provide that personalized experience for her.”
What’s love got to do with it?
Mares compared the feelings that women experience as consumers to the experiences they feel when they fall in love for the first time—“the anticipation, those nervous feelings, the excitement. As a businessman, you may wonder why would she want to fall in love with you. Remember, her limbic brain is double the size of a man’s, so how she feels is super important.
“Our bodies actually have the same physiological reactions to falling in love as they do when we’re shopping or doing business with someone. That is the release of dopamine, serotonin and oxytocin—hits of happiness and bonding.
“If you can create real relationships, a real connection with your female consumer, you will actually create a bond with her—and when you create a bond with her, she is suddenly a customer for life, as long as you continue to evolve the relationship. Once she feels safe, secure and special, she will go nowhere else—she wouldn’t even imagine doing business with anyone else.”
What does “evolving the relationship” look like? For Mares, it starts with the willingness to listen, to show empathy and compassion.
“You need to journey through her eyes, break down the journey she goes through by moments in time, so the phone call, the arrival, the wait time, the restroom, the explanation of the service or the product she is purchasing, the in-between visit interaction—that is the evolving of the relationship.”
Still not sure how to proceed?
Ask your female employees.
For businessmen still wondering where to begin, Mares proposed a simple
“If you have a female in your business, have her walk through the business with you, through the journey that your female consumers take with you, and have her point out everything that she would change. Then action it! You’re going to be one step closer to creating that hedonic atmosphere that a woman wants and craves—an atmosphere of connections and feelings.
“The old saying that ‘men are from Mars and women are from Venus’ is a true statement. We do want different things, but being different isn’t necessarily a bad thing,” Mares concluded. “We just need to work together and lean on the women in our businesses to create an experience she can’t live without, and the only way you are going to earn her business is to create an experience that is tailored and personalized to her, to take the time to show compassion and empathy, to validate her questions and her feelings, and to earn her trust.”
About SEMA Education
Accessing SEMA’s industry-leading education is easier than ever. With dozens of live and on-demand offerings—and more debuting during the year—SEMA Virtual Education includes comprehensive presentations, insightful discussions and short videos that teach, inform, inspire and entertain automotive specialty-equipment professionals. From builders and engineers to marketers, sales staff and much more, participants become more educated and prepared for success. To learn more, visit www.sema.org/virtual-education.
About Katie Mares
Writer and brand experience expert Katie Mares is a certified public-speaking professional who has consulted with such companies as Honda and Celebrity Cruises, and who offers corporate training workshops in create, operationalize, result, evaluate (CORE) methodology to help companies in the pursuit of sustainable success. Mares can be found online at www.katiemares.com.
Photography Courtesy: Eric Rickman, Petersen Publishing Company Archive
“Don’t take your eyes off Vukovich.”
That was the advice of Hot Rod’s Ray Brock, doing his annual Indy 500 preview for the magazine’s June 1955 issue. In the ’50s, Hot Rod’s coverage of the 500 included pre-race visits to shops around the Southern California area to ferret out the latest news about what to expect at the Brickyard. Those were the years when Indy roadsters had a lot in common with the era’s hot rods and were often constructed by top-tier hot-rod builders, whose shops were within an easy drive of the magazine’s Hollywood office.
It looked like the 1955 race was going to be groundbreaking, with several innovative entries under construction. For example, Frank Kurtis was building a streamlined car with a bubble canopy for Jimmy Daywalt to drive. Another Kurtis roadster, a D-500 sponsored by Bardahl, was being sent to Italy to be fitted with a Ferrari engine. Car builder Quinn Epperly was also experimenting with streamlining a Kurtis roadster for sponsor Belond and driver Jim Rathmann.
Yet Brock, seen here at left watching Stu Hilborn fit a fuel-injection system to the Offenhauser in Bill Vukovich’s roadster, told readers they should not count out the two-time 500 winner, who was gunning for his third consecutive victory.
As it turned out, the 1955 Indy 500 was more news-making than groundbreaking. Daywalt’s streamliner could only qualify for the race after the removal of its swoopy fenders, becoming “just another Kurtis roadster,” Brock wrote in his race coverage. Daywalt finished ninth.
Likewise, the Belond streamliner was stripped down to a more conventional shape before Rathmann drove to a 14th-place finish. The Bardahl-Ferrari never made the grid.
“Around the Indy garage area, some people thought that the Ferrari factory was more interested in looking over the Kurtis chassis than they were in entering a car in the 1955 race,” Brock said.
It was Vukovich who made headlines, but for an unfortunate reason, fatally crashing in the 56th lap after leading most of the race. In his story, Brock paid tribute to “the most aggressive driver of modern times. To a lot of nonpartisan observers like ourselves waiting in the garage area for reports on Vukie’s condition, the race lost all of its luster after that all-final announcement was made.”
SEMA’s “Future Trends Report” Charts the Benchmarks to Recovery
By Mike Imlay
Nearly halfway into 2021, the disruptions of last year’s COVID-19 pandemic are still having a pronounced influence on the current economic climate. The questions on everyone’s mind are when we might finally return to a sense of normalcy and what that “new normal” will look like. Released early this year, the “2021 Future Trends” report from SEMA Market Research offers a much-needed barometer as the economy recoups its momentum.
The report takes a deep dive into such market-driving forces as the pandemic, the state of the economy, consumer spending, auto-sector trendlines and aftermarket health. It then forecasts three scenarios for recovery and their consequences for specialty-equipment businesses.
“Obviously, 2020 was a strange year with the pandemic and such. So going into 2021, we looked into all the information and data out there about the pandemic, about the virus,” said Gavin Knapp, SEMA director of market research. “There were projections about vaccine rollouts. There was lots and lots of data about the economy and what it was doing. There was data about the automotive sector and, of course, data about our industry. But if you were to search for all that, there are a lot of different places to look and it’s a lot of effort to go through. What we did was collect this information to see how all these things are playing out together over one, two and three years. This provides our industry a one-stop look at how we expect everything will interact to affect our industry.”
The research encompassed governmental data as well as information supplied by independent consultants and other industry sources. The following are three of the report’s main findings:
The “COVID-19 Recession” Is Markedly Different Than Others
The current recession is historically unique, not only due to its causation but also in how it has affected each sector of the American economy.
“This has been the sharpest, deepest but also the shortest-lived recession in U.S. history,” said SEMA Market Research Manager Kyle Cheng, who oversaw the report’s compilation. “Over the past 100 years our recessions have usually been caused by some kind of financial issue, for instance a liquidity crisis. This one was entirely caused by a virus. With governments attempting to contain its spread and consumers generally fearful of spending money, we experienced a lot of economic disruptions.”
“It’s important to look at the differential impact that this pandemic has had,” added Knapp. “If we look at some of the traditional economic indicators, such as a downturn in employment, throughout the pandemic we definitely saw a spike, particularly very early on. The difference is the spikes were very sectoral in terms of the businesses and job types that were hard hit. Hospitality sectors, travel, tourism, bars, restaurants—those businesses experienced high losses. But many other sectors were able to continue going about regular service.”
That phenomenon kept money flowing to a variety of consumers. And with certain areas of habitual spending suddenly closed to them, those consumers diverted their money to other pursuits.
“They had some pent-up pocket change, which was good for industries like ours where people could spend more on their hobbies,” said Knapp. “In our case they spent on fixing up their project cars.”
Unlike other recessions, many Americans were also able to save money at higher-than-usual rates during the pandemic. This translates to a pent-up readiness for economic recovery.
The American Economy Is Already Rebounding
As alluded to above, the economic rebound has been underway for some months now. But how quickly the recession ends depends on how rapidly several key milestones occur.
“Our intent with this report was to look into our crystal ball,” said Knapp. “Now, there’s no way that we can predict the exact future for our industry, but we can come up with several realistic scenarios of what’s likely to happen. These scenarios are based on many input factors: the virus, the vaccine, the economy, auto industry trends and consumer demand. So within the report, we’ve developed an ‘optimistic’ scenario, our likely scenario, and a ‘pessimistic’ scenario. And each one outlines from 2021 to 2023 what we believe is going to happen in terms of the economy, the auto industry and the specialty-equipment market.”
While a typical recession runs between five and 10 years, Cheng believes current trendlines indicate a much shorter duration this time. “You can already see it. Just look at employment in our sector. By February we recovered 80% of jobs in our industry and the broader auto industry. We’re probably looking at three to four years by which time our economy should be moving at a pace where we’re recovered, although the [residual] damage will be more longer term,” he said.
So what are some indicators to watch for? “A return to normal business operation goes hand in hand with what scientists call herd immunity,” answered Cheng. “When we reach that, and restrictions start to lift, we’ll see much more normality. Another area that that we highlight as a factor is the recovery of the service sector—hotels, restaurants, and those kind of businesses that have been the most disrupted by the pandemic.”
Other positive signposts will include the return of in-person sports and entertainment events along with nationwide employment recovery. In the report’s most optimistic scenario, there’s a 20% chance of all these factors congealing by 2022. In a more restrained projection, there’s a 25% chance it will take up to four years to hit all these benchmarks. The projected scenario, however, is a 55% likelihood of a three-year recovery period, ultimately leading to 4% industry growth over 2019 levels by 2023. Importantly, no matter what the scenario, the aftermarket as a whole is poised for a quick rebound.
COVID-19 Will Have Longterm Impacts on Business
The pandemic forced businesses to grapple with unprecedented supply-chain issues, with many suppliers having to rethink their “just-in-time” approaches. Consumers, also, had to turn to alternative sources for products and services. In addition, companies had to adapt their policies, procedures and internal infrastructures to accommodate remote workers and new health and safety standards. Trade, sporting and entertainment events went virtual. Having learned to adapt to so many new ways of doing things, it’s only intuitive that many businesses will continue to leverage the innovations to some extent going forward.
In the business press, many have notably speculated on a permanent jump in online shopping. Whatever implications the recent e-commerce surge may hold for other industries, however, Knapp believes changes in the aftermarket will be modest.
“Obviously throughout the pandemic, as some traditional brick-and-mortar retail was closed, we saw a jump in e-commerce across the whole U.S. market,” he observed. “But people would probably be surprised to hear that online sales actually make up less than 15% of total retail sales in the U.S. They probably believe it’s more like 50% to 80%. And generally it’s not our sector. The specialty-equipment market has actually already been much higher in e-commerce and online sales. Closer to 40% of our sales already come through online sources.”
“We expect that to bump up a little throughout this period of pandemic, although it certainly won’t overtake our brick-and-mortar retail. We see a lot of continued interest from consumers in our sector, in the brick and mortar side, in being able to see and touch things. Once things open up, and people feel more comfortable going back into stores to car shows, we expect them to go right back to those in-person ways.”
None of this is to detract from the fact that many aftermarket businesses experienced hardship during the pandemic. Overall, however, both the essential nature of the industry and its ability to adapt quickly to the unprecedented disruptions spared it from the deep hits other sectors took. In fact, a large portion of aftermarket businesses—particularly manufacturers—posted growth as Americans indulged their automotive passions to cope with lockdowns. But will the newfound consumer enthusiasm stick?
“It’s going to be an important question for our industry whether consumers continue to spend at record levels on auto parts or if they shift gears over the next year to things they haven’t been able to purchase. But we’re optimistic,” said Cheng.
And, said Knapp, there’s good reason for that optimism. “Back in April 2020 we surveyed our industry and they were feeling the pain and worried about the year ahead,” he said. “But by the end of 2020, a huge chunk of companies not only said they were OK, but had increased their sales levels over the previous year. That really shows the resiliency and the bounce-back our industry made from that low point during the pandemic and its restrictions.”
Pandemic: 100–200 million vaccinated by late October 2021. Herd immunity by late Q2 2021.
Business & Operations: Normal business operations resume by mid or late 2021. In-person events return by July 2021. Some safety measures likely required through September.
Economy: 2–3 years for economy to fully recover. Full employment at end of 2022.
Our Industry: Industry jumps 10% from 2019 to reach $50.9 billion in total sales in 2023.
While predicting the future is always an iffy proposition, one “optimistic” scenario could see a 20% likelihood of aftermarket sales growth that reaches $50.9 billion in 2023.
Pandemic: 100–200 million vaccinated by end of 2021. Herd immunity by Q3–Q4 2021.
Business & Operations: Normal business operations resume by end of 2021 or early 2022. In-person events return by September 2021. Some safety measures required until end of year.
Economy: 3 Years for economy to fully recover. Full employment at end of 2023 or early 2024.
Our Industry: Industry grows 4% from 2019 levels to reach $48.1 billion in total sales in 2023.
Currently, SEMA Market Research’s projected scenario is a three-year economic recovery leading to 4% industry sales growth that reaches $48.1 billion in 2023.
Pandemic: Vaccines delayed or ineffective. No herd immunity until well into 2022.
Business & Operations: Normal business operations return by mid or late 2022. In-person events return in mid-2022, with safety measures required until the later part of 2022.
Economy: 3–4 years for economy to fully recover. Full employment not until 2025.
Our Industry: Recovery is slow, with total sales at $45.3 billion by 2023. A 2% drop from 2019.
A more sluggish scenario would be an economic recovery lasting up to four years. This could lead to industry sales reaching just shy of their 2019 levels when 2023 rolls around.
Get the Full Report
To download your free copy of SEMA’s latest “Future Trends Report,” go to www.sema.org/market-research. While there, be sure to check out the numerous other reports that can help keep your business growing.
Reaching Out To Lawmakers in 2021: Make Your Impact
By Chris Kersting
Once again in May, SEMA-member companies will be communicating directly with their elected representatives about the issues that concern our industry. Only it will be different this year—and, in certain ways, better.
Past Washington, D.C., SEMA Rally attendees can attest to the value of the event, when SEMA members converge on Capitol Hill for in-person meetings with their elected representatives in Congress. The Rally is an opportunity to make lawmakers aware of widespread public participation in the automotive lifestyle and the economic importance of the specialty-equipment industry. Now more than ever, lawmakers need to know that the enjoyment of motorsports and the car and truck hobbies is needlessly being eroded by overly aggressive laws and regulations.
The 2021 Washington Rally will be shifted to a virtual event via video conferencing this year. As with the live D.C. Rally, SEMA staff will match participating SEMA members with the appropriate congressional representative and supply briefing materials. Each meeting will last approximately 15 to 30 minutes and will include SEMA Government Affairs staff to facilitate discussions. We need you to join us for this year’s
For attendees and lawmakers alike, there are certain advantages to virtual meetings, including far greater flexibility when it comes to scheduling. Meetings will take place over a six-week period from May 12 to June 30 rather than in a single day.
This year’s virtual format will also allow participants to cover more ground. One example would be for registrants with multiple business addresses. Through the convenience of video conferencing, it will easily be possible to have separate meetings with each locality’s Congressional representative.
While the camaraderie associated with a face-to-face Rally may be missing this time around, the impact of the event should be as strong as ever. When constituents connect directly with their elected representatives, it’s more powerful than when a lobbyist makes a call or a new poll is released, and business on Capitol Hill has been conducted via digital meetings for at least a year now, so moving to a virtual platform to communicate is nothing new for lawmakers and their staffs.
Speaking of staffing, one of the top SEMA priorities for 2021 has been to increase the association’s capabilities in Washington, D.C., and state capitols around the country. That means additional resources for firepower in Washington, whether staffing or the ability to bring in outside help where situations warrant. Those steps will enable our legislative affairs team to advocate more broadly and continue to provide guidance on hot-button issues ranging from emissions compliance to motorsports regulations to access of vehicle-generated data and control systems.
Over the next five years, we can expect regulatory activity to increase, brought about through concerns with climate change, the introduction of new vehicle safety technologies, and efforts to phase out the internal combustion engine. We hope that you will join us to arrange a meeting with your Congressional representative by participating in our virtual Washington Rally
Even if you don’t get a chance to sign up for this year’s Washington Rally, you can help support your industry by signing up for the SEMA PAC and by defending the hobby through the SEMA Action Network (SAN). Visit the www.sema.org website to find out more. There is strength in numbers, especially when it comes to advancing our automotive freedoms.