SEMA Indicators

SEMA News—April 2018

BUSINESS

By Amanda Gubbins

SEMA Indicators

Insights Into Today’s Marketplace

  New Products SEMA ShowThe SEMA Show offers many clues as to what’s ahead for the industry, including scan data indicating buyer interest at the New Products Showcase.
   

As the association representing the automotive specialty-equipment industry, SEMA offers a number of resources for members, ranging from research and product development programs to business tools and, certainly not least, the SEMA Show. It can be interesting to examine these programs for background data that might not normally be in focus but which can offer perspective about the current state and future direction of the industry.

Following are some recent SEMA marketplace indicators. While this “stray data” cannot predict the future with any certainty, looking at these indicators may unearth patterns and correlations relevant to member businesses.

Vehicle Sales Snapshot: Trucks Going Strong

While many headlines in early January focused on a drop in vehicle sales for 2017—a dip of 1.8% that was the first decline in eight years, according to CNNMoney—Automotive News was quick to point out that it was still one of the five best years on record. Tom Libby, manager of industry analysis for IHS Markit, also remarked to CNNMoney that 2017 was the third consecutive year of 17-plus-million sales.

For 2017, the top-10 vehicles as reported by Business Insider, based on Kelley Blue Book data, follow in units sold and the percent of change from the previous year.

Vehicle 2017 Sales % Change From 2016
Ford F-Series 896,764 +9.3
Chevrolet Silverado 585,864 +1.9
RAM Pickup 500,723 +2.3
Toyota RAV4 407,594 +15.7
Nissan Rogue 403,465 +22.3
Toyota Camry 387,081 -0.4
Honda CR-V 377,895 +5.8
Honda Civic 377,286 +2.8
Honda Accord 322,655 -6.5
Toyota Corolla 308,695 -14.4
“The 20 Best-Selling Cars and Trucks in America,” reported by Business Insider, January 20, 2018.

Looking closer at the data, SUV sales outpaced sedans, with the Toyota RAV4 and Nissan Rogue overtaking the Toyota Camry. Low unemployment rates and gas prices during the course of the year could be contributing factors in this shift.

SEMA’s most recent Vehicles in Operation (VIO) data (available through a partnership with Experian) also sheds light on the actual vehicles currently on U.S. roads. Following are the current top five categories:

  • 24% Mid-Range/Traditional
  • 20% Pickup
  • 15% CUV
  • 13% SUV
  • 11% Small Car

Taken together, the top-selling vehicles and VIO counts seem to confirm that trucks will continue to offer a steady source of opportunities for outfitters and customizers in the year to come.

Measuring Sessions: Interest in Trucks and SUVs

The SEMA Garage provides access to vehicles that have not yet been released or that may be difficult for member companies to gain access to on their own (such as models available only overseas). Manufacturers use the measurements obtained from these vehicles to ensure the proper fitment of their products when they hit the shelves and can utilize tools provided by the Garage to access the right parts and check the fit of their product prototypes.

In 2017, several SEMA-member companies participated in measuring sessions hosted at the SEMA Garage. Reflecting overall industry growth in the CUV/SUV segment, of those sessions, the most popular vehicles were the ’18 Toyota C-HR and the ’17 Mazda CX-5. These two compact SUVs were followed by the Audi Q5 and the ’18 Ford pre-production suite.

According to SEMA Garage team members, top areas of interest on those vehicles covered the accessories spectrum, ranging from wheels and tires and exterior components to audio systems and interior accessories.

Tech Transfer: UTV Data in Demand

SEMA Garage Tech TransferIn 2017, the SEMA Garage saw growing interest in the UTV market, with a record number of requests for UTV scan data through the Tech Transfer program.  
   

Over the past year, the SEMA Technology Transfer program also provided a few interesting indications of where the specialty-equipment market is focusing attention. This resource for manufacturers provides CAD data for use in product development. Some of the data comes directly from the OEMs, while other vehicles are periodically added to the repository using a FaroArm coordinate measuring device to generate scan data.

For 2017, the three most-requested scan files were for the Polaris RZR, Can-Am X3 and Toyota Tacoma, in that order. Notably, data for the RZR and X3 have only been offered since May 2017, so those UTVs became standouts in terms of popularity among members in a very short time. Requests for RZR files nearly tripled those of the X3.

“It’s obvious that there is high demand for UTV data and that this is an area where manufacturers will be putting their money into tooling,” said SEMA Vice President of OEM and Product Development Programs Mike Spagnola.

Following the top three, the rest of the top 10 requests were heavy on trucks and SUVs, although the combined UTV requests were almost three times those of the combined truck and SUV requests.

“The Tech Transfer membership categories that are showing the strongest growth are truck and SUV manufacturers,” said Vehicle Product Data Manager Gary Pis. “The next noticeable niche is the side-by-side or UTV market. A lot of members that are in the truck niche are jumping into this new niche at a fast rate.”

Both truck/SUV and UTV parts manufacturers seem to be designing bumpers, suspension, wheels, LED light pods and bars. Specific to trucks and SUVs, brakes, superchargers and armor protection also appear to be popular, while UTV parts manufacturers are also concentrating on rollcages, radiator relocation kits, seats and doors.

Emissions Lab Demand: Still More Trucks

Next door at the emissions lab, the SEMA Garage team completed more than 100 applications for EOs for member companies in 2017. Trucks topped the list of vehicles needed for testing, according to Compliance Center Manager Peter Treydte, who said the most commonly used test vehicle last year was a Ford F-150 with the EcoBoost engine. He added that SEMA recently purchased a 2018 EcoBoost F-150 for members to use for testing in the emissions lab.

It should come as no surprise that access to the F-Series truck would be in high demand among manufacturers. In eight years of presenting the SEMA Award—a measure of a vehicle’s popularity among customizers—SEMA Show exhibitors have seven times selected Ford’s F-Series as the hottest truck.

New Products Showcase

  Spy PhotosThe Ford Bronco Mule, which appeared in the August 24, 2017, issue of SEMA eNews, was the top-clicked spy photo for the year.
   

Barcode scan data from the New Products Showcase at the SEMA Show is an indicator of buyer interest, and thus growth on the retail side.

“Year after year, buyers tell us that their top reason for attending the SEMA Show is to see new products,” said SEMA Trade Shows Director Tom Gattuso. “Surveys indicate that the New Products Showcase is buyers’ number-one destination, where they can see nearly 3,000 new and featured products organized by category and scan the products’ barcodes to collect more information.”

At the 2017 SEMA Show, the three most popular product categories (measured by number of buyer barcode scans) were Performance-Street Product, Off-Road/4-Wheel Drive Product and Performance-Racing Product. The fact that three of the top six most-scanned products were mobile electronics products may reflect growth in this category as consumers gain interest in upgrading their existing fleet with new electronic infotainment and safety devices. Accessories for trucks and off-road use—particularly Jeeps—were also strong.

Overall, the top 10 most-scanned products were as follows:

  • VRN-DD7HB from Soundstream (Mobile Electronics Product)
  • Vector Full LED Grille for the Jeep Wrangler JK from Oracle Lighting (Off-Road/4-Wheel Drive Product)
  • GoNav Smart Mirror from Yosky (Mobile Electronics Product)
  • The INVent A/C Vent from Restomod Air (Street Rod/Custom Car Product)
  • Two-Piece Extra-Long 8-in.
  • Trailer Ramp from Race Ramps (Tools & Equipment Product)
  • Look-It from Voxx Electronics Corp. (Mobile Electronics Product)
  • Universal 6 Gauge Analog Bargraph Panel from Intellitronix (Interior Accessory Product)
  • 2-ton Big Wheel Jack from Austin International Mfg. Inc. (Off-Road/4-Wheel Drive Product)
  • AirBedz, The Original Camo Truck Bed Air Mattress from Pittman Outdoors AirBedz (Featured Product)
  • Up&Down3000 from Autolift Product (Tools & Equipment Product)
  New Products ShowcaseThe most-scanned product in the 2017 SEMA Show New Products Showcase was the VRN-DD7HB from Soundstream, a dual-display multimedia system that provides safety and infotainment features at the driver’s fingertips. This data point corresponds to studies that suggests that safety and connected car technology will grow at a faster rate over the next five years.
   

The impact of electronics products on the market is an interesting topic. In its 2017 Automotive Industry Trends report, PricewaterhouseCoopers identified high manufacturing costs due in part to connected car and autonomous driving tech, along with safety and environmental regulations, as factors that could drive manufacturing costs upward and pose a challenge for OEMs. The report indicated that “electronics could account for up to 20% of a car’s value in the next two years.”

However, advanced driver assistance systems (ADAS) are also projected to provide a significant opportunity for specialty-equipment businesses to outfit the millions of vehicles already on the road that lack those features. SEMA-commissioned research projects that the market for retrofitting vehicles with ADAS tech will grow at a 9.1% compound annual growth rate and reach $1.5 billion by 2021. The leading systems included in that estimate are blind-spot warnings, lane-departure warnings, passive park assists, passive forward-collision warnings, and heads-up displays.

Spy Photos and SEMA eNews Clicks

A different Spy Photo appears every Thursday in SEMA eNews (later appearing in this magazine’s “Industry News” story). The images are unofficial peeks at pre-production vehicles spotted during endurance testing. Usually among the top-clicked items in SEMA eNews, the traffic to particular vehicles can give clues as to consumer and aftermarket industry interest. Here’s a look at the top-10 spy photos from 2017:

  • Ford Bronco Mule
  • ’18 Corvette ZR1
  • ’19 Camaro
  • ’19 RAM 150
  • ’19 Chevrolet Silverado 150 Diesel
  • ’19 Ford Ranger FX4
  • ’19 Mustang Shelby GT350
  • ’19 GT500 With Supercharged 5.2 FPC Engine
  • ’18 Ford F-150 Chrysler 300 SRT Hellcat widebody

Beyond spy photos, an undeniably popular topic during the year was the ’18 Jeep Wrangler. As information became available throughout the year, SEMA eNews published stories previewing the vehicle, which made its official debut at the Los Angeles Auto Show. Each time it was covered in the newsletter, the story ranked among the most engaging for the week.

While it’s early for stats on the adoption of the new model, SEMA research does have a report that profiles owners of ’91–’17 Jeep Wranglers (TJ and JK) to help SEMA members understand the consumers who modify their Jeeps and to aid members in making better decisions in their sales and marketing strategies. The report includes information about the total number of registered Wranglers, along with stats about accessorization habits.”

The Jeep has also been SEMA Show exhibitors’ pick for hottest 4x4/SUV every year since the SEMA Awards were launched in 2010. For a more in-depth look at the Jeep and UTV markets, see “Jeeps and Side-by-Sides” on p. 22.

SEMA Education and Career Center

Ford F-SeriesNot just the top-selling vehicle in the U.S., the seven-time SEMA Award winning Ford F-Series is continually an exhibitor favorite and one of most-often customized display vehicles. Strong sales data suggests this model, and other pickup trucks, will continue to offer customizers raw material for some time to come.  
   

SEMA’s 2016 Employment Outlook Report revealed that specialty-equipment market employers anticipated being most in need of general labor and sales professionals over the next few years. In addition, manufacturers were most likely to have needs across all job categories. Overall, employers said that engineering, sales and skilled and auto trades were their most difficult positions to fill.

Looking to the SEMA Career Center, found at www.sema.org/jobs, the top three categories of jobs posted by employers in 2017 were sales and customer service, mechanical repair technician, and marketing and promotion. Similarly, the top three job types viewed on the site by job seekers were sales and customer service, marketing and promotion, and mechanical repair technician. On a related note, the job types garnering the most applications through the site were sales and customer service, mechanical repair technician, and marketing and promotion.

“A survey of our scholarship applicants typically shows a large percentage of students pursuing engineering and technical fields,” said SEMA Senior Education Director Zane Clark. “As we continue partnering with schools and offering career-fair-type events, the goal is to develop a talent pipeline that will benefit our members.”

While these data points can be interpreted a number of different ways, there do appear to be certain standout segments in terms of growth, such as electronics, trucks and off-roading, and powersports. Overall, the industry outlook seems sunny, and SEMA is anticipating many opportunities for members in the months ahead.

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