SEMA Indicators

SEMA News—April 2015

BUSINESS
By Steve Campbell

SEMA Indicators

Compass Points for Specialty-Equipment Companies
 

More than 145,000 industry professionals attended the 2014 SEMA Show, up 5% over 2013. More than 60,000 of that total was comprised of buyers, up 4% over the previous year.
More than 145,000 industry professionals attended the 2014 SEMA Show, up 5% over 2013. More than 60,000 of that total was comprised of buyers, up 4% over the previous year.

   

Business trends reveal themselves in a host of incarnations, and we seek each year to ferret out those that pertain to the automotive specialty-equipment aftermarket. The SEMA Show, new-vehicle sales, educational tendencies and other indicators may reveal significant industry developments—or at least give savvy professionals some compass points to steer by. We hope that the following areas of interest help with the navigation.

SEMA Show

With more than 145,000 industry professionals traveling to the 2014 SEMA Show, attendance was up 5% over 2013. More than 60,000 of that total was comprised of buyers, up 4% over the previous year, with nearly a quarter of them coming from outside the United States to do business with the nearly 2,400 exhibiting companies. Even media attendance was up 1.3%, with more than 2,800 writers, editors, bloggers and broadcasters on the Show floor. The attendance figures have been steadily climbing through each of the last few years, indicating that the industry has recovered strongly from the downturn in 2008.

“We focus on the quality of participants and not quantity,” said Della Domingo, SEMA public relations director. “While we’re still awaiting final results from our post-Show survey, initial feedback leads us to believe that manufacturer product exposure was incredibly high, and exhibitors connected with quality buyers from all over the world.”

New products that are unveiled at the SEMA Show also offer some insights as to where the markets are blossoming. The total numbers of items introduced or featured in the 2014 edition of the SEMA Show’s New Products Showcase were relatively consistent with last year’s offerings, showing a modest 1% increase, but the number of products displayed by first-time exhibitors was unusual. In nearly every category, displays by first-time exhibitors grew by double-digit increments demonstrating a surge at the entry level among smaller companies.

One of our traditional methods of gauging interest in new products is the number of scans they receive from buyers and media during the SEMA Show. Electronic scanners that read and record information from bar codes placed adjacent to each new product allow users to quickly gather text and photos for selected products. The top 10 most-scanned products at the 2014 SEMA Show included:

  • SmartNav 5 from App-Tronics LLC (Mobile Electronics Product)
  • The ShowCase by CarCapsule (Street Rod/Custom Car Product)
  • Motoped Black Ops Edition from APT Motovox Inc. (Powersports Product)
  • Vintage Speed Shop Tachometer Neon Clock Sign by Cornhusker Sign/OldNeons.com (Street Rod/Custom Car Product)
  • SmartVision from App-Tronics LLC (Mobile Electronics Product)
  • LED Dash Kits by US Speedo (Merchandising Display)
  • U-Bar Projector Headlights from AnzoUSA (Exterior Accessory Product)
  • LED Five-Function Corner Step OE Replacement from AnzoUSA (Van/Pickup/Sport-Utility Product)
  • Wide Whitewall Tire Rim by Deluxe Wheel Co. (Wheel and Related Product)
  • NotcHead Line Clamps from NotcHead (Street Rod/Custom Car Product)

New products are the predominant reason buyers give for attending the SEMA Show, and they evidently found what they were looking for at the 2014 event. In the soon-to-be released post-Show survey conducted by SEMA, 58% of buyers reported spending 16 hours or more on the Show floor, and 48% of them reported making purchases. In addition, 87% said that they would make product or service purchases from Show exhibitors within the next 12 months after the Show.

Also according to the survey, the vast majority of buyers, exhibitors and members of the media rated the 2014 SEMA Show as “good” or “excellent,” and of the exhibitors that took orders at the Show, 43% reported more sales than they had from the 2013 SEMA Show.

New Vehicles

Perhaps not coincidentally, new-car sales also showed strong growth, especially in the second half of 2014. Automotive News reported 2014 sales of 16.5 million vehicles, up 6% over 2014’s mark of 15.6 million. The publication said that those were the best yearly totals since 2006, well before the recession, and marked the fifth year of growth since a low of 10.4 million units in 2009. And now, spurred by markedly decreased fuel prices, the auto industry seems poised for continued robust sales, especially in the types of vehicles that enthusiasts tend to choose—trucks and SUVs, musclecars, and sporty compacts.

The Ford F-Series pickups continue to dominate sales figures and also lead in indicators such as requests for CAD files from the SEMA Technology Transfer program and attendance at SEMA Measuring Sessions.
The Ford F-Series pickups continue to dominate sales figures and also lead in indicators such as requests for CAD files from the SEMA Technology Transfer program and attendance at SEMA Measuring Sessions.

     
       

The Detroit News pointed out that SUV sales were particularly strong.

“The resurrection of SUVs comes as the entire utility vehicle segment—which includes crossover utility vehicles—has grown significantly,” wrote automotive reporter Michael Wayland. “May 2014 marked the first time that retail registrations of SUVs and crossovers surpassed sedans in the United States, according to an analysis of vehicle retail registrations by
IHS Automotive.”

The increasing sales were not predicated just on falling fuel prices, Wayland said. The market was already seeing success from increased consumer confidence as well as the introduction of “new or substantially redesigned vehicles.” Nonetheless, vehicle sales and the economy as a whole certainly received an extra boost from the precipitous drop in oil costs. And the upturn is expected to continue in 2015, with sales projected at 16.8 million units.

There are currently about 250.1 million vehicles in operation in the United States, according to global information services company Experion. Lower scrappage rates and sales of new vehicles have bolstered that number over the past few years. Currently, the leading segment is fullsize pickups (37.48 million), followed by standard mid-range cars (29.18 million) and small economy cars (23.06 million).

Even so, not all sources are unabashedly cheerful. No less prestigious a firm than PriceWaterhouseCoopers (PwC) recently advised that a dollop of caution be blended with the optimism as a result of “falling residual values, increased interest rates and the changing demographic makeup of consumers.” One of the elements cited was an increase in the sales of used vehicles because of new-vehicle price increases and decreasing prices for used cars and trucks. PwC also pointed to a significant demographic headwind: the increasing retirement rates of baby boomers who will pull back on purchases, which Millennials may take years to make up.

The top 10 vehicles sold in January 2015 included:

  • Ford F-Series Pickup (54,370 units, up 16.8% over January 2013)
  • Chevrolet Silverado Pickup (36,106 units, up 24.8% over January 2013)
  • Dodge Ram Pickup (28,618 units, up 14.1% over January 2013)
  • Toyota Corolla/Matrix (27,357 units, up 20.2% over January 2013)
  • Toyota Camry (26,763 units, up 14.7% over January 2013)
  • Nissan Altima (26,408 units, up 17.3% over January 2013)
  • Honda CR-V (23,211 units, up 27.3% over January 2013)
  • Honda Accord (21,011 units, up 2.0% over January 2013)
  • Ford Escape (20,054 units, up 3.1% over January 2013)
  • Toyota RAV4 (19,824 units, up 17.4% over January 2013)

Measuring Sessions

SEMA’s Measuring Sessions may also hold some clues for automotive businesses. In this program, manufacturing companies use both electronic and traditional tools to measure for new parts and accessories and to check component fitments on near-production prototypes of new-vehicle releases. The sessions provide the attending manufacturers with advance product-development opportunities before the vehicles hit showroom floors. Twenty sessions were held in 2014, and 192 companies attended them.

The best attended sessions were those for the ’15 Ford F-150, ’15 Mustang Eco Boost, ’15 Corvette Stingray and ’15 Chevy Colorado. The most popular areas of interest within the sessions were wheels, engines and suspension, but there seemed to be more wheel and tire companies in attendance than in previous years.

The hot subjects are often obvious—vehicles such as the Mustang, Camaro, Challenger, F-150, Silverado and so on—but the Measuring Session staff reported a few surprises for 2014. For example, even though the Corvette is a low-production vehicle, it was one of the largest draws. And even though trucks and musclecars are always going to be hot, there was also surprisingly high interest in measuring sessions for Volkswagen as well as several other “tuner cars.” SEMA is paying attention to this trend and is working on getting more of these sorts of vehicles into the measuring-session system.

Perhaps most predictable was the large turnout for the ’15 Mustang. The measuring session for that car was held in May of 2014, several months before the vehicle was released to the marketplace.

 

Both the SEMA Garage and SEMA Data Co-op have steadily gained usage since their inception. Each offers access to technological advances that aid in developing and disseminating products from SEMA manufacturers.
Both the SEMA Garage and SEMA Data Co-op have steadily gained usage since their inception. Each offers access to technological advances that aid in developing and disseminating products from SEMA manufacturers.

   

“We did two more Mustang measuring sessions over the summer, including two in the SEMA Garage,” said Rachael Salazar, senior coordinator for SEMA’s OEM and product-development programs. “The result was lots of ’15 Mustangs at the SEMA Show, with hundreds of aftermarket products available for suspension, body styling and all the various engines offered in that vehicle.”

The Mustang was also honored with the SEMA Award in the Hottest Car category. SEMA Award winners represent the models that exhibitors most often featured in their booths at the SEMA Show.

Technology Transfer

SEMA Technology Transfer is another program designed to increase speed to market for manufacturers that are developing new automotive specialty-equipment products. SEMA receives CAD files directly from Ford, Lincoln, General Motors/Chevrolet, Chrysler, Dodge, Ram, Jeep, Fiat and Scion, and the association is then able to offer the files to member manufacturing companies.

Since the advent of SEMA Garage, the association has begun augmenting its scan data files with its own FaroArm coordinate measuring machine. Without the CAD and scan data files, an aftermarket manufacturer would have to perform manual measurements, make its own CAD drawings and then go through a trial-and-error process to develop a correct prototype.

Nearly 340 companies requested files last year, with trucks and sports cars drawing the most attention. The most requested files were for chassis and suspension components, following by body and powertrain parts. The vehicles drawing the greatest interest included (by category):

  • Pickup—’15 F-150
  • Sports Car—’15 Mustang
  • SUV—’15 Chevy Tahoe
  • Luxury Car—’15 CTS V Series
  • Passenger Car—’14 Cruze
  • Compact Car—’14 Focus ST

The Technology Transfer administrators said that the truck and SUV segments are continuing to be popular, and there is particular interest in the fullsize Ford F-150 as well as the new Colorado/Canyon midsize pickup.

“Everyone is also going crazy over the new Mustang, so there is a lot of opportunity for accessorization,” said Gary Pis, SEMA vehicle product data manager. “There is also plenty of excitement about the new Corvette and Corvette Z06 with the next-generation LT1 and LT4 engines. They may present the additional possibility of transplants into older vehicles.”

Spy Photos

The Spy Photos feature provided to SEMA eNews by KGP Photography and carried over to SEMA News may offer another indication of vehicle popularity. SEMA tracks the number of instances when people click on a particular vehicle, and that—however informally—may provide a little insight into vehicle popularity. Granted, the clicks are made by industry professionals who subscribe to SEMA eNews (you can get your free subscription here: www.sema.org/sema-enews), but they’re enthusiasts, too.

The three most-clicked Spy Photos for 2014 were the ’15 Ford Focus ST, ’15 Ford Falcon and ’15 SRT Challenger. Outside of the Challenger, those results may seem surprising, considering some of the other vehicles that have been featured in Spy Photos. Check out the top three in each of the following categories:

 

The ’15 Ford Focus ST was, surprisingly to some, the most-clicked Spy Photo from SEMA eNews. The popular feature in SEMA’s electronic newsletter reveals many unauthorized “first looks” at newly offered or redesigned cars and trucks.
The ’15 Ford Focus ST was, surprisingly to some, the most-clicked Spy Photo from SEMA eNews. The popular feature in SEMA’s electronic newsletter reveals many unauthorized “first looks” at newly offered or redesigned cars and trucks.

   

Most-Clicked Luxury Vehicles

  • Cadillac El Mirage Four-Door Prototype
  • Cadillac ATS-V
  • ’15 Chrysler 300S

Most-Clicked Compact Vehicles

  • ’15 Ford Focus ST
  • MINI E Racer Coupe
  • ’16 Chevrolet Cruze

Most-Clicked Light Trucks

  • ’16 Ford Super Duty Prototype
  • Ford Ranger Prototype
  • GM Colorado/Chevrolet Canyon Diesel

Most-Clicked SUVs

  • Jeep Latitude “Jeepster” Prototype
  • Jeep Cherokee Diesel
  • ’16 Ford Explorer

Most-Clicked Performance Vehicles

  • ’15 SRT Challenger
  • ’15 Bullitt Mustang
  • ’16 Charger SRT8

Education

SEMA offers a variety of educational opportunities through SEMA Education, which encompasses all of SEMA’s educational efforts, both online and at live events. The most popular topics may provide some understanding about where the industry currently places its emphasis.

Attendance at seminars during the Education Days programs at the SEMA Show are a prime indicator of SEMA’s direction, which is spurred by member requests. For instance, digital marketing continues to be a topic of high interest, as are customer service/sales and vehicle technology topics. The SEMA Launch Pad program (see www.sema.org/launch-pad) also drew attention from association members.

SEMA Education InstituteThe SEMA Show education program typically includes more than five dozen sessions. Topics address basic business practices such as accounting, marketing and social media.

The best-attended seminars at the 2014 SEMA Show included “How to Make Facebook Work for You at $1 a Day,” “Building a Sustainable Social Media Strategy,” “The Next Great Business: How Entrepreneurs Pitch Their Ideas,” “The Pumpkin Plan: A Simple Strategy for Growing a Remarkable Business in any Field” and “99 Reasons Why Your Favorite Car Sucks: How to be a Successful Car Builder.”

To leverage the business perspectives offered by SEMA Show educational speakers, SEMA Education has produced SEMA Biz Tips—a collection of video vignettes. Typically two to four minutes long, they are available through SEMA eNews and at www.SEMAShow.com/biztips and will consist of business-focused video shorts. The idea is to share key tips and insights from business and industry experts who made presentations at the SEMA Show or from interviews at other industry events.

SEMA Membership

SEMA has 26 member categories that include everything from manufacturers and retailers to warehouse distributors and publishers. The association’s largest growth in 2014 came in the retailer categories, and the top three reasons new members across the board gave for seeking SEMA membership included business resources and solutions, research and information, and industry communications.

Two of the newer programs—SEMA Garage and the SEMA Data Co-op (SDC)—have also become popular among members. SEMA Garage provides member businesses with access to high-tech tools and equipment and is augmented through the Tech Transfer and Measuring Sessions programs. And the SDC allows manufacturer member companies to manage their product data while member retailers are provided with free access to the data.

The growing popularity and utilization of these programs suggests that the industry is not only embracing technology but is also investing in it. A look back only a few years reveals the wholesale changes in how business is now being done, with more and more members using technology to produce new parts faster and cheaper, and managing product data to bring these parts to market faster. 

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