WHICH CONSUMERS TO FOCUS ON DURING ECONOMIC DOWNTURN

Discretionary income and a tightening economy is hitting close to home for many specialty-equipment companies. SEMA President and CEO Chris Kersting addressed the issue at the SEMA National Education Conference, April 10–11, in Nashville.

"With the economic downturn, our industry, like many other industries, is having a tough year,” Kersting said. “I am in a unique position to hear from a lot of different niches within the industry and I am pleased to say that we have some niches that are doing quite well. And even within some of the spaces where there are challenges right now, you have companies that are figuring a way to make sure that when we come out of this downturn, they will be well-positioned."

Despite the economic uncertainty, SEMA research shows that the overwhelming majority of enthusiasts have household incomes well above the national average. The latest SEMA Automotive Lifestyles study shows that the average income of enthusiasts that modified their car had a household income in excess of $96,000—more than 2.5 times the national per capita income.

Technometrica's March Economic Optimism Index showed some negative feeling about the future of the economy, although among the demographic group of most concern to the specialty-equipment industry there are optimistic opinions.

The Economic Optimism Index is a rating of Optimism/Pessimism on a scale of 1–100. Ratings below 50 are pessimistic and ratings above 50 are optimistic. The latest index showed that those with annual household incomes in excess of $75,000 were optimistic with a rating of 51.0. Men were also optimistic with a rating of 50.1. The SEMA Annual Automotive Lifestyles Survey reveals an overwhelming majority of respondents that are male and have a household income averaging $96,000.
 
Younger consumers appear more optimistic about their economic future, as well. The Economic Optimism index showed that consumers between the ages of 18–24 had an optimistic rating of 59.9, the highest of any group polled by Technometrica's TIPP Economic Index. During economic slowdown, the youth market may represent an opportunity for specialty-equipment markets to tap into for future sales growth.

For more industry insight, visit the SEMA Research and Information Center online at www.sema.org/research.