Examining Specialty-Equipment and Automotive Market Trends

SEMA News—August 2013

BUSINESS
By Steve Campbell

SEMA Indicators

A Look at Specialty-Equipment and Automotive Market Signposts

	The search for marketplace information is never-ending. The SEMA Show is a prime indicator of market trends, revealing both attitudes and new offerings.

The search for marketplace information is never-ending. As the economy fluctuates, new technologies emerge and changing tastes shape sales, savvy industry professionals constantly look for indicators that will aid them in making business decisions based on more than mere supposition. While no one can accurately and consistently predict the course of things, knowing which way we’re going can confirm whether we’re facing a sunset or the dawn.

Exhibitors

The SEMA Show is a prime indicator of market trends, revealing both attitudes and new offerings. The majority of exhibitors at the 2012 SEMA Show generally felt that attendee traffic showed not only diversity, but also increased numbers over 2011, which suggests further recovery in the economy. In addition, exhibitors said that buyers seemed to be more willing to spend money at the 2012 Show, perhaps even approaching pre-recession levels.

Exhibitors said that the quality of buyers—those who were actual decision makers—had also increased over the previous year. While many companies use the SEMA Show as a networking event that is not necessarily focused on making direct sales, 34% of exhibitors reported receiving orders in 2012, compared with 30% the previous year, and about 40% were optimistic that post-Show orders would increase compared with 2011. More than 50% of attendees sampled by SEMA Show organizers—both exhibitors and buyers—said that they planned to increase their trade-show attendance in 2013, which is another indicator that business is on an upward track.

Buyers

The impression that there was more spending at the 2012 SEMA Show was reflected in a post-event survey of attendees who indicated that they were buying at the 2012 SEMA Show. That sampling said that average purchase amounts had risen from $21,416 at the 2011 event to $35,738 at the latest SEMA Show. Nearly 90% of buyers at the 2012 Show said they would place orders with exhibitors in the next 12 months, with almost 60% saying they would be purchasing a product that was newly introduced at the 2012 Show.

The percentage of new or first-time buyers was also up from 25% of those in attendance in 2011 to 27% in 2012, though the largest number—about 40%—had attended between two and five previous SEMA Shows. (Interestingly, 33% had been to more than six SEMA Shows, and a full 5% of those in attendance had been to more than 20.) The first-timers said that word of mouth and the search for new products brought them to the event, and that was also the reason most often given by frequent attendees to the Show. But 64% of attendees also cited business conditions ranging from “some positive” to “significantly positive” as the reason they’d come to the Show.

While buyers were ready to spend, both before and after the Show, they were also drawn to the event by specials and discounts. Nearly 75% said they had taken advantage of exhibitors’ SEMA Show deals—up from 68% in 2011. And a significant number of attendees said that they would be sharing the information they gathered at the Show with their business colleagues and customers as well as family and friends.

New Products

	The new products on display at the SEMA Show are naturally a substantial reason for the event’s continual success, so the popularity of product categories and specific products may provide indications of where the markets are headed.

The SEMA Show New Products display is naturally a substantial reason for the event’s continual success, so the popularity of product categories and specific products may provide further indications of where the markets are headed. Many buyers who study the more than 2,000 displays use electronic scanners to tag items for which they are interested in obtaining additional information. The scans provide an indication of where particular emphasis might be placed.The “Exterior” product category drew the greatest number of scans at the 2012 SEMA Show, followed by “Performance Street,” “Off-Road” and “Tools & Equipment.” But the number-one and -two most-scanned items—and five of the top 10—were housed in the Mobile Electronics section. The top-10 most-scanned products were:

• Capacitive Touch Rear View Mirror With GPS from Intraphex (Mobile Electronics Products)
• Gentex Rear Camera Display Mirror With OEM Camera Options from Mito Corp. (Mobile Electronics Products)
• Wheel Bands by RimPro-Tec North America (Featured Products)
• Kiwi 2 Wifi from PLX Devices (Mobile Electronics Products)
• SunSpot Infrared Heater H-300 from Cool-A-Zone (Tools & Equipment)
• Classic Car Sequential Taillights from Easy Performance Products (Street Rod/Custom Car Products)
• Kiwi 2 Bluetooth from PLX Devices (Mobile Electronics Products)
• Square-Style Patented Custom Smooth Door Handle from Kindig-It Design (Engineered New Products)
• Digital Instrument Cluster from ID4motion (Engineered New Products)
• DashCommand from Palmer Performance Engineering (Mobile Electronics Products)

It’s also instructive to take a look at the most-scanned product in each of the display categories. The only double top-scanned company was Putco Inc. with its LED Interior Stick Festoons in the Interior Accessory category and its G3 LED DayLiner Point-of-Purchase Display in the Merchandising Display grouping. The individual top-scans items in the 17 product categories were:

• Soft-Sanders Six-Piece Set from Style-Line Corp. International (Collision Repair & Refinish Product)
• Square-Style Patented Custom Smooth Door Handle from Kindig-It Design (Engineered New Products)
• TruXedo B-Light BP from Extang/TruXedo/UnderCover (Exterior Accessory Product)
• Wheel Bands by RimPro-Tec North America (Featured Products)
• LED Interior Stick Festoons from Putco Inc. (Interior Accessory Product)
• G3 LED DayLiner Point-of-Purchase Display from Putco Inc. (Merchandising Display)
• Capacitive Touch Rear View Mirror With GPS from Intraphex (Mobile Electronics Products)
• KC Race Bar from Bulldog Lighting-KC Hilites (Off-Road/4-Wheel Drive Product)
• MSD Atomic EFI, Master Kit Packaging from MSD Performance (Packaging Display)
• TrackMat from BedRug Inc. (Performance-Racing Product)
• DashCommand from Palmer Performance Engineering (Performance Street Product)
• Flushmount Dually, SRM and SRQ LED Lights from Rigid Industries (Powersports Product)
• Classic Car Sequential Taillights from Easy Performance Products (Street Rod/Custom Car Products)
• LAC Tire Printer from LAC Corp. (Tire and Related Product)
• SunSpot Infrared Heater H-300 from Cool-A-Zone (Tools & Equipment)
• AirBedz Lite Truck Bed Air Mattress from Pittman Outdoors “AirBedz” (Van/Pickup/Sport-Utility Product)
• 17-in. Steel Artillery Wheel from Wheel Vintiques (Wheel and Related Product)

New-Vehicle Sales

Recent new-car sales data also show some rather uplifting trends. The New York Times reported that 2012 U.S. sales were up about 13% over 2011, with a total of about 14.5 million vehicles moving out of showrooms, and the good news seemed to be continuing into the new year. In figures before we went to press with this issue, The Wall Street Journal said that total light vehicle sales were up 14.2% in January 2013 compared with January 2012. The top category was midsize cars, which slightly led the crossover utility vehicle (CUV) segment in popularity, 255,772 units to 225,163. In fact, CUVs showed the largest year-over-year January percentage gains at 20.2%, with small cars next at an 18.1% increase.

The only category losers, it appeared, were large cars, large SUVs and minivans. Large cars—whose sales have been declining for some time—suffered the greatest January damage at -9.3% (only 239 units for the month), while large SUV sales were off by -7.5% at 3,667 units. The minivan slippage was a mere -1.7%, but it may lend credence to the idea that the vastly more popular CUV segment is overtaking the category.

The Ford F-Series remained the number-one selling vehicle in January 2013 with 46,841 units sold, a 21.7% increase over the previous January. Ford’s lead was followed by the Chevrolet Silverado with 35,445 units sold, up 21% year over year.

The first car on the top-20 list was the Toyota Camry (31,897 units, a 12.7% increase), followed by the Honda Accord, which was up a whopping 75.2% over the previous January with 23,924 units sold. The only other vehicles to score similar percentage gains were the Ford Fusion in the number-six spot with 22,399 sales (up 64.5% over last January) and the Ford Explorer with a sales increase of 52.6% at 15,207 units.

General Motors held the greatest market share overall for January with 18.7%, slightly up from the previous year, with Ford claiming the number-two spot with 15.9%, Toyota in the third slot at 15.1% and Chrysler holding fourth with 11.3%.

For more on this story, read the full article in the August issue of SEMA News.