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%.

SEMA eNews “Spy Photos”

Another new-vehicle trend indicator—and perhaps even more telling for SEMA-member companies—is the number of clicks drawn by the various “Spy Photos” supplied to SEMA eNews and, subsequently, SEMA News by KGP Photography. Of course, it could be that the natural curiosity of an industry full of car guys and gals contributes to the draw, but there is also probably an element of business research invested in the selections.

Two of the three highest-interest “Spy Photos” during 2012 were light trucks, and all three at the top of the list were Chevrolet models. The ’14 Silverado pickup drew 14,957 page reads; the ’14 SS (an Australian model spotted in the states) captured 9,268 sets of eyes, and the ’14 Silverado HD photo was selected 9,190 times. Next up on the hit parade was the ’14 Dodge Durango SUV with 6,434.

A luxury vehicle, the ’14 BMW X5 CUV, captured the next slot in the top clicks countdown with 4,749 selections, followed by another SUV, the ’13 Mercedes GL63 AMG, at 4,353. Following next was the first passenger car (at least, the first one available in the United States), the ’13 Dodge Challenger SRT8 392 with 3,601. In the compact segment, the three top spots went to the ’13 MINI Cooper (3,549), the Volkswagen MK7 Golf (3,218) and the Ford Fiesta (2,325).

Measuring Sessions

	Things are looking up. Exhibitors at the 2012 SEMA Show said that buyers seemed to be more willing to spend money and that the quality of buyers—those who were actual decision makers—had also increased over the previous year.

While “Spy Photos” may draw an audience based partially on enthusiast fervor, the next indicator—SEMA Measuring Sessions—reflects directly upon how manufacturers feel about their product prospects for participating vehicles. These sessions allow SEMA-member manufacturing companies to use both electronic and traditional measuring tools to check real-world dimensions on near-production prototypes of new vehicle releases to ensure that fitment will be correct when the car or truck becomes available at the showroom.

An average of 20 to 30 companies attend each session during the course of the year. The best-attended sessions are those for trucks, SUVs and sport compacts, and the data most sought after includes wheels, suspension, interior, audio electronics/entertainment systems and body components.

Highly attended measuring sessions are an indicator of aftermarket manufacturer interest, and a show of confidence as to how a vehicle might fare in the marketplace. Savvy manufacturers take advantage of the opportunity to front load the development of products that offer the greatest sales potentials. High attendance at a measuring session is also indicative of vehicles that will probably find favor at the SEMA Show. Those vehicles that have had very successful measuring sessions over the past few years have included the Chevrolet Camaro and Silverado/Sierra trucks, the Ford Mustang and F-Series trucks, Chrysler’s Dodge Dart, Ram and Jeep Wrangler and the Scion FR-S. Note the number of those vehicles that went on to claim awards as Hottest Vehicles of the SEMA Show.

Two SEMA Measuring Sessions involved trucks that—while popular throughout the rest of the world—are not available in the United States. The first was for a ’12 double-cab 4x4 Toyota HiLux. The pickup is a best-seller in Mexico, parts of South America, throughout Europe, South Africa, southeast Asia, the Middle East, Australia and New Zealand. The second, a Ranger T6, is available throughout the world except for the United States and Canada.

The two vehicles were shipped to the United States through a partnership with the U.S. Department of Commerce as part of the SEMA International Vehicle Measuring Program. The Measuring Sessions for these two light trucks were so popular that another session for each was scheduled early in 2013. That fact alone makes it apparent that SEMA members are interested in and ready to take on global markets.

(SEMA members can request access or sessions with specific vehicles. Generally, SEMA schedules sessions for the most-sought-after and highest-volume vehicles. Contact SEMA Senior Director for OEM Relations Bill Wolf via e-mail for more information about domestic sessions and SEMA Director of International Relations Linda Spencer concerning international sessions.)

Technology Transfer

	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. The Chevrolet Silverado followed Ford’s lead with 35,445 units sold, up 21% year over year.

The SEMA Technology Transfer program is another way for SEMA-member companies to proactively advance their product-development programs, and the vehicles and types of products involved can provide further insight into market emphasis. SEMA companies involved in the program request computer-aided design (CAD) or 2-D drawing data provided by participating automakers. That information is then used to develop new products tailored specifically to the individual vehicle without the need for reverse engineering.

During 2012, just over 320 SEMA companies took part in the program, with the overwhelming majority (98.6%) requesting CAD files. The vehicles that drew the most requests, in order, included the Corvette C6, Ford Mustang, Ford F-150, Chevrolet Silverado, Jeep Wrangler and Ford Super Duty pickup. Typically, suspension, engine and exterior files are the most requested, and there were nearly 1,700 files provided last year.

SEMA Vehicle Product Data Manager Gary Pis oversees Technology Transfer as well as the association’s Rapid Prototyping program, which facilitates the creation of ABS plastic prototypes of designs at reduced, members-only pricing. Product validation can be accomplished sooner thanks to the ability to produce prototypes without the need of a casting mold or CNC programming.

The Rapid Prototyping program is indicative of how quickly this type of technology is entering automotive specialty-equipment manufacturing processes. There was a 40.5% increase in prototype orders during 2012 and more than 30% growth in the number of companies taking advantage of this service.

More and more members are using the Rapid Prototyping service and are returning for additional prototypes because of the versatility and relatively low cost of the SEMA process. Pis said that the program has resulted in the production of a wide variety of parts, including truck bed cover brackets, engine valvetrain components, intake manifolds, electronic module casings, pedals, alternator connectors, throttle bodies, ring-and-pinion sets and more.

Educational Offerings

SEMA’s educational programs include both online and live presentations by acknowledged experts in a variety of fields. Generally, however, the most popular topics center around online marketing, product sales and customer service. The power of the Internet has become a relevant trend in all three areas. For instance, approximately 900 people attended the online marketing sessions at the 2012 SEMA Show. Topics included Facebook marketing, using online forums and blogs, search-engine optimization, pay-per-click advertising and more. Business-management sessions were also very popular, with top-attended sessions including presentations on management and leadership skills, sales training and customer-service strategies.

The single best-attended seminar at the 2011 SEMA Show was “Increase Sales: Change Your Attitude,” which was presented by Nancy Friedman, the author of seven books on communications, sales and customer service. Another top draw was “Are You a Boss or a Leader?” Presented by Christine Corelli author, keynote speaker, business columnist, facilitator and entrepreneur, this session was targeted at developing dynamic leadership, applying mental self-leadership techniques and obtaining employee engagement.

These programs and others like them indicate that SEMA members are particularly concerned about how to keep pace with and best leverage the rapidly evolving digital world, including how to effectively sell online and foundational elements of business management.

New SEMA Members

The final indicator in our brief overview is the SEMA membership itself. The association offers memberships in 26 categories ranging from manufacturers and retailers to warehouse distributors and publishers and they have remained consistent over the years.

SEMA began as a manufacturer’s trade group, and while the membership categories have expanded dramatically since the association’s inception, manufacturing remains a core constituency and still makes up more than 40% of new members. During the past year, the category that displayed the largest percentage of growth was restorers, although that may be a result of entrepreneurs making a business out of what starts as a hobby.

Regardless of their category, though, members cite specific reasons for wanting to belong to SEMA. Among the top items are business-resource solutions, SEMA Show exhibitor discounts, industry communications and the association’s research and information services. We hope that this look at trends within the industry might be included in that final category.