SEMA News—March 2013

BUSINESS
By Mike Imlay

Racing Youth

Selling to the Young Motorsports Segment

	Attendees at the 2012 SEMA Show got a first-hand look at the Global Rallycross Championship in front of the Las Vegas Convention Center. The competition is part of the current type of motorsports being embraced by young racers today. If your company isn’t selling into this market, it may be missing a growth opportunity.

There is little doubt that motorsports has matured as a mainstream sporting genre in the last five decades, helping to grow the performance aftermarket into a stable, nearly $30-billion industry. Of course, the hope is that both motorsports and the industry will also stay forever young amid this maturation, with fresh new faces rejuvenating the racing scene and manufacturers continuing to revitalize their product lines. So which racing segments are “young” today, and how does the industry engage them?

According to David Wallens, editorial director of Grassroots Motorsports, the answers aren’t easy. Since its launch in 1984, Grassroots Motorsports has catered to hands-on enthusiasts, whether they are into autocross, track days or club racing or just want a neat street car. From his vantage point, Wallens has perceived some decline in youthful interest in motorsports.

“From what I’m seeing and hearing, fewer teens are into cars [and] just simply have no interest in getting a car,” said Wallens. “If they’re not into cars, then they’re not into motorsports. Fortunately, the slightly older enthusiasts tend to have the stability—and income—to truly get involved. Still, we need to get the next generation passionate about things that generate tire smoke. On the plus side, I regularly run into teens and 20-somethings—both guys and girls—who think cars are the coolest things in the world. I think part of it is culture and part is exposure. If you took a group of high schoolers to a motorsports event—and I don’t care if it’s a local autocross or the Rolex 24 at Daytona—I think they’d be hooked.”

Forever Changing

	Thanks to low attendance costs, Formula Drift events draw large crowds of young people, which in turn reflect the young drivers who act as effective brand ambassadors for industry sellers and sponsors.

Wallens noted that the youth racing scene is constantly in flux.

“In the ’90s, it was all about import drag racing,” he said. “Then reality set in: Drag racing a Honda leads to a lot of broken parts. In the ’00s, it was all about drift. Then reality set in: Drifting a 240SX leads to a lot of crunched fenders. Now, I’d say we’re seeing more younger enthusiasts back into autocross and track days. Track days have really become a huge part of our scene. For one, the car doesn’t have to be built to a certain set of rules. No one cares what camshafts or gearing you’re running. If the car is safe, you can run. Plus, it offers a solid thrill-to-dollar ratio. Last year, I ran two PDX track events sanctioned by the SCCA [Sport Car Club of America]—one at Sebring’s short course and the school course at Daytona. Cost per day: $90. That’s simply amazing.”

John Kilroy, vice president and general manager of Performance Racing Industry (PRI), echoed those comments.

“I don’t see a specific major segment of racing that is especially ‘young’ right now,” Kilroy said. “This kind of phenomenon can come and go quite rapidly. When it comes to number of participants, karting is the number-one way that young people are introduced for the first time to a motorsport. Quarter midgets and junior dragsters are also popular starting points for the next generation of racers. And Legends cars are an affordable way for a young person to start oval-track racing with the support of the parents.”

Add in Crapcan Racing along the lines of ChumpCar and 24 Hours of LeMons. It’s road racing with less emphasis on budget and more emphasis on fun.

	Aftermarket manufacturer Whiteline hopes to further penetrate the youth racing market with its new Watts link kit for the ’05–’13 Mustang.

“When you’re 25, do you really want to spend hours deciphering a rulebook?” Wallens asked. “Autocross is also still a huge part of our scene, no matter what the age. The cost of entry is even lower, and there’s really no chance of banging up anything. Plus, the skills learned while autocrossing transfer so nicely to track driving. Even more importantly, that car control makes for a better street driver.”

According to Jim Liaw, president and co-founder of Formula Drift, economics play a huge factor in youth motorsports involvement.

“Motorsports participants skew older in most cases because motorsports are more expensive than sports like surfing, basketball or even golf,” Liaw explained. “An older individual tends to have more disposable income. Yes, there are a lot of young drivers in development—kids that are go-karting, young drivers going through development series such as F2000, Indy Lights, etc.—but they are rare and few and are funded by family money.”

Along with the motorsports mentioned above, drifting not only remains a favorite of young performance enthusiasts, but has also developed a cultural following.

“Cost of entry is low,” said Liaw. “Participants are much younger. If you look at the profiles of Formula Drift Pro Drivers, they range from 21–39, representing a dozen countries and multiple ethnicities. The majority of them have Facebook, Twitter and Instagram accounts, which shows that they are social-media savvy and are early adaptors to these new technologies. In 2012, we had 38 drivers commit to the entire tour, showing that most of them consider Formula Drift a major priority—if not the priority—in their driving careers.”

While seemingly less likely to move up to, say, NASCAR or other traditional forms of motorsports, today’s young drivers are not exactly staying put, either. Take, for example, action sports champion “General” Brian Deegan.

	Action sports champion Brian Deegan (also known as “The General”) epitomizes today’s young driver, crossing over several race disciplines from motorcross to off-road truck racing to rallycross.

At age 17, Deegan left Nebraska for Southern California, armed with only a credit card, a dirt bike and an old truck. Becoming a decorated Freestyle Motocross rider, he moved on to championship off-road racing and now holds multiple rallycross medals as well. He has recently branched out into the aftermarket with his Metal Mulisha business, which creates and sells branded apparel and performance parts.

“Somehow rallycar has been able to capture the younger audience through X Games,” said Deegan. “I think there’s a pretty bright future for rallycar due to kids grabbing onto it.”

He observed that off-road racing also offers an attractive crossover from motorcross for young racers. Moreover, as opposed to more established forms of track racing, he sees rallycar, off-road truck racing and similar forms of motorsports getting “younger.”

“I know a handful of drivers now who are like 14 years old that are just really fast,” he said. “There are a lot of young kids coming up that are really good right now—it’s breeding the younger drivers. A lot of times, people think of motorsports as expensive. That’s changing now. With the small-car market emerging, [young] people now can go buy cars that are closely simulating the cars we race—they have a better ability to get involved.”

Product Appeal

		Executive Summary Entry points for young racers are constantly in flux, creating varying demands in the marketplace. Karting, autocross, drifting, off-roading and rallycross are among the segments currently popular with young drivers. There is broad demand for safety and performance products that aftermarket businesses can tap into. Selling to this market requires an authentic voice and a willingness to engage the audience through heavy social-media and face-to-face contact.

Now that we’ve identified the young motorsporting crowd, what products appeal most to them? Wallens pointed out that his Grassroots Motorsports ad base is heavy on the firms catering to the cars preferred by today’s younger drivers.

“For us, that’s the Subaru, BMW, Mazda, Nissan and Mustang market,” he said. “Still, there’s interest from the younger crowd for what they consider to be old-school cars: E30-chassis BMW 3 Series, Honda CRX, early Miata, etc. For parts, it’s the usual—wheels, tires, bolt-on speed parts, ECU tuning. As more are getting on track, safety gear manufacturers have to take note.”

In fact, a recent article in Performance Racing Industry magazine found that safety gear is a strong product category for the youth market.

“Parents are willing to spend the extra money on items that help their children race safely, such as drivers suits, helmets, gloves, shoes, head and neck restraint devices, fireproof underwear and more,” said author Christen D’Allesandro. “Carrying an inventory with a wide selection of sizes is important, as children can quickly grow out of their safety gear during the season and need replacements fast.”

Based in Santa Ana, California, SEMA-member manufacturer Whiteline specializes in sway bars, control arms and chassis control products featuring its synthetic elastomer bushings. According to account executive Jared Chavez, the company has had a lot of success in the youth-performance market with its anti-dive/anti-lift kits, adjustable sway bars and alignment-correction bushings. For the most part, products have been geared toward the sport-compact market in Nissan, Subaru and Mitsubishi parts, but Chavez said that the company has taken the American musclecar market by storm with its new Watts linkage system for the S197 Mustang, noting that it has “really been a big halo product for us in the United States.”

Calvin Chan is director of operations at GTSpec, another SEMA-member company that is based in Deer Park, New York. GTSpec specializes in suspension, bracing and performance engine products. The manufacturer has likewise found a receptive audience among the youth racing crowd.

“We cater to most Subaru, Nissans, Mitsubishi and Hyundai models,” Chan said. “Those have been our bread and butter. We’re now branching out to more domestic cars, such as the Camaro and Ford Mustang and Focus, covering the grassroots.”

	SEMA-member manufacturer GTSpec specializes in suspension, bracing and performance engine products. Pictured here is the company’s stainless-steel, equal-length manifold for the WRX/STI Impreza with a EWG 44mm setup. Small cars continue to be popular with young racers.

Meanwhile, Deegan has seen recent success with his own line of branded performance products, which he showcased at the 2012 SEMA Show. He views the parts as a natural progression from an apparel line he started several years ago, figuring that if sponsors were going to pay good money for his product endorsements, he could do even better by putting his own name on a line.

“I was able to spawn off and do Metal Mulisha off-road wheels and lift-kits,” he said. “Now it’s the new line of Deegan 38 Wheels and lifts and more personal products. I think small cars will be the next big thing, so we’ll see how that goes; but for now, off-roading has been my niche.”

PRI’s Kilroy observed that, similar to “adult” racing, there are plenty of youth product channels for aftermarket businesses to tap into.

“At the end of the day, the young racers, with the support of their families, are looking for a variety of specialized equipment in their chosen form of racing that will help them go faster or protect their investment in the race vehicle,” Kilroy said. “It may be specialized lubricants, suspension parts, chassis tuning equipment, exhaust parts or upgrades in tires. Racers are there to do what it takes to win, no matter what their age.”

Engaging the Market

Companies seeking to sell into the youth motorsports market will want to start by understanding the emerging culture and speaking its language. This often translates to a heavy social-media presence on sites such as Facebook and Twitter. However, even while engaging the young demographic, don’t forget that they don’t necessarily make their purchase decisions alone.

“I think there are two factors to consider in marketing to the youth motorsports market,” explained Kilroy. “The drivers are young, and the use of language, images and themes that appeal to the younger generation are appropriate if the young driver might be involved in the purchasing decision. However, a lot of the purchase decisions are made by the parents, who are seeking products that offer a matrix of value in performance, durability and price. It’s also important to review your advertising vehicles with this in mind. Young drivers may be connected to different motorsports media than the parents, including websites and social media.”

	Karting remains a popular entry point for young motorsports enthusiasts, and safety apparel and equipment remains a top priority for their parents.

Perhaps not so surprisingly, this also includes less trendy forms of online media, such as message boards and forums.

“Our own message board has become an animal that has spawned numerous friendships, local meets and instances of enthusiasts helping enthusiasts,” noted Wallens. “Post a question or cry for help on our message board, and someone will quickly come to your rescue. I know that message boards are seen as old-school versions of social media, but it’s still people acting social.”

The key to all messaging, however, is to remain authentic. For the aftermarket, said Wallens, this means offering good, solid products.

“If you pander to the market with cheesy ads, then you’ll be seen as pandering,” he said. “Today’s younger enthusiasts—at least the ones reading our magazine—can separate hype from honesty. If you can position yourself as the recognized leader while offering those solid, proven products, I think in the long run you’ll have a cradle-to-grave customer. Don’t look down on the younger enthusiasts as clueless chumps. Realize that they’re sponges ready to learn.”

Remember also, said Liaw, that today’s young motorsports drivers carry clout with the wider youth audience.

“They are brand ambassadors, influencers and trendsetters,” he observed, adding that recognizing and respecting this demographic will go a long way toward fostering brand-loyal relationships. “Most participants still feel that most manufacturers are unapproachable and that they do not care for them or respect them. As a result, they just stick to the brands that do support them, whether those brands’ products are good or bad.”

At Whiteline, Chavez believes marketing has to be fairly abstract, since the youth demographic is constantly changing.

“What is an effective form of marketing now may be almost worthless in six months, so it really comes down to a mix of coming up with new and innovative approaches and initiatives in combination with some good, old-fashioned community involvement,” he said. “One of the biggest things to understand is that being a car enthusiast is a lifestyle, and the youth lifestyle is drastically different from the older demographic.”

To Wallens, that includes getting out into the young motorsports community for the type of tried-and-true, face-to-face meetings that make strong first impressions.

“Welcome younger enthusiasts with open arms,” he advised. “We need new blood to replace those who leave us.”