By Ashley Reyes
The new "2024 SEMA Market Report" is helping industry members make more informed business decisions by spotlighting new insights into the size and scope of the automotive specialty-equipment industry.
Produced by SEMA Market Research, the report is filled with detailed market sizing, information on where consumers shopped for aftermarket parts and accessories in 2023 and key industry trends that are currently impacting the market.
Here are three ways that SEMA members can leverage the report to help their businesses grow:
1. Strategic Planning
Developing an effective business plan can be cumbersome without the data needed to make informed decisions. The "SEMA Market Report" addresses this challenge by highlighting which products and segments are thriving, and which are falling short, empowering companies to set goals based on data rather than speculation.
For example:
- Pickups have some of the highest accessorization rates of all vehicles, and sales for pickup parts topped $16 billion in 2023.
- The light-truck sector continues to drive the specialty-equipment industry, with pickups (32%), CUVs (15%), and SUVs (12%) accounting for more than half of accessory and performance parts sales.
- Crossover utility vehicles (CUVs) represented 46% of all new vehicles sold in 2023 and have grown to become the largest vehicle segment in the United States.
- Traditional cars (sedans and coupes) have been declining in sales; this drop in cars on the road is reflected in the segment's falling share of specialty part sales as well.
2. Marketing Strategy
Knowing your customers and how to connect with them is imperative for building a successful marketing strategy. The "consumer profile" section of the market report highlights spending patterns based on consumer age, including where consumers are researching and shopping for parts and what type of parts are being bought. This information can help your company better align your messaging, improve your online presence and boost sales and brand awareness.
For example:
- The percentage of accessorizers that look for parts information on search engines and review websites is 51%.
- YouTube remains the top social-media source to find more information on new products.
- Young people continue to drive the market, with half of accessorizers under the age of 40. Younger accessorizers are also likely to do more extensive builds, such as suspension and engine performance mods.
3. Business Expansion
Before expanding business, companies must first evaluate the market's landscape and the needs and preferences of its consumers. The "SEMA Market Report" offers insight into how various segments are doing so that companies can use that information to identify untapped market opportunities, whether that be offering a new product or expanding into new sales channels.
For example:
- Many people, particularly younger shoppers, are turning to purchase online, pick up in-store options that have become available. These options combine the benefits of shopping from home, while also giving customers the immediacy of store pickup and the option to have a part professionally installed.
- Drivers are accessorizing their alternative power vehicles, such as electric vehicles (EVs) and hybrids, which brought in $2.5 billion in sales in 2023.
- While EV sales have climbed year-over-year, consumers aren't flocking to this technology as some have predicted and many automakers are adjusting their transition plans. SEMA has lowered its forecast for EV sales, with the expectation that internal combustion engine (ICE) vehicles will make up the majority of sales over the next decade.
- More than half of accessorizers (56%) own a powersports product, such as a trailer, UTV or motorcycle, which can offer opportunities for cross-selling and promotions.
Overall, automotive specialty-equipment market sales grew to $52.3 billion in 2023, an increase of about 1% over 2022. Over 90% of specialty-equipment businesses surveyed also expect their 2024 sales to equal or exceed 2023. This is positive news as the industry prepares for the SEMA Show later this year, where more than 2,400 brands are set to exhibit and reveal their products and services to thousands of qualified buyers.
SEMA business members can download the new "2024 SEMA Market Report" for free at www.sema.org/research. To learn more about SEMA membership, visit www.sema.org/membership.