SEMA Indicators

SEMA News—April 2014

SEMA INDICATORS

A Look at Areas of Interest for Specialty-Equipment Companies

	At the 2013 SEMA Show, more than 60,000 buyers joined nearly 50,000 exhibit personnel as well as thousands of media and other visitors to bring total attendance to more than 140,000 industry professionals and their guests.

For this story, we have drawn upon information from a variety of sources that, taken together, may suggest business trends. SEMA’s trade show data, new-vehicle sales, educational tendencies and other indicators are some of these often-overlooked sources. What follows is a look at some of the areas of interest that may show where business is headed in the near future.

SEMA Show Buyer, Exhibitor Behavior

For professionals in the automotive specialty-equipment industry, the SEMA Show data can be a goldmine of trends. It’s everything from a barometer of economic health and an indicator of the hottest vehicle segments to a portent of rising product types and a guide to vehicles that are most likely to be accessorized.

At the 2013 SEMA Show, more than 60,000 buyers joined nearly 50,000 exhibit personnel as well as thousands of media and other visitors to bring total attendance to more than 140,000 industry professionals and their guests. The totals were well above those from the 2012 Show, which was itself a banner trade event. The industry is showing record-level support of the Show, and the buyers are there to do business.

This year, we saw significantly more buyers make purchases or place orders than at the 2012 SEMA Show. Still, the majority do their research at the trade event and then buy later in the year. About 87% of the buyers in attendance said that they planned to make a purchase from an exhibitor in the next 12 months, and more than half of all buyers at the Show said that they would purchase a product that is either new to the market or at least new to their company. About three-quarters of those who made a purchase at the Show said that they took advantage of SEMA Show specials or discounts in doing so. They also said that they planned to share the information they gathered at the Show with more business contacts than they had in past years.

The single most scanned product at the SEMA Show’s New Products Showcase was the Utility Light Bar With Two Rechargeable LED Flashlights from AnzoUSA. Second most popular was the 3in1 Truck Ties from PipeMaster Tools, and the OBDLink LX Bluetooth from ScanTool.net was the third most scanned.

Buyers said that product displays were the biggest stimulus in getting them to visit exhibitor booths, and nearly all of them said that they were influenced to attend the SEMA Show by their desire to see new products. Though most said that they come to the Show with a list of companies to see, 88% said that simply walking by an exhibitor’s booth was what drew them in. More than half were also influenced to visit exhibitors by displays in the New Products Showcase and by listings in the SEMA Show Directory.

Objectives for exhibitors center around generating leads, networking with existing customers and increasing awareness of their companies within the industry. A substantially larger number of exhibitors said that they had more than 500 visitors this year than in 2012.

Exhibitors also said that they were taking more orders on average than they did at the 2012 Show, and 44% of Show sales were to new customers. Exhibitors were also more optimistic about the number of future sales and orders than they were in 2012, with many estimating 100 or more post-Show sales.

One method of gauging interest in new products is the number of scans by buyers and media at the New Products Showcase. Electronic scanners that read and record information from bar codes on each Showcase display allow users to quickly and efficiently gather information. At the 2013 SEMA Show, products in the Exterior category received the greatest number of scans, Performance Street products were second, Off-Road products were third and Performance Racing Products were fourth. The top 10 most-scanned products were:

Utility Light Bar With Two Rechargeable LED Flashlights from AnzoUSA
3in1 Truck Ties from PipeMaster Tools
OBDLink LX Bluetooth from ScanTool.net
JDM Series Gauges from Prosport Gauges Inc.
Arc Bar from Bulldog LED Lighting
OBDLink MX Wi-Fi from ScanTool.net
FAST EZ-EFI 2.0 Engine Control System, Base Kit Packaging from COMP Performance Group
SmartNav 5 from App-Tronics LLC
Espresso Veloce from Espresso Veloce
OE Fit Third Brake Light Rearview Camera from Auto-i (Canada) Corp.

New-Vehicle Sales

For most of 2013, new-vehicle sales were an economic bright spot as they continued to rebound, but they hit a bit of a stumbling block in December and early in 2014. Even though the 2013 full-year numbers were strongly positive, delivering gains that took the industry over 15 million units sold for the first time since 2007, GM and Toyota missed their December forecasts, and Ford had only a moderate gain. Every major automaker reported year-over-year improvements compared with 2012, and Chrysler even bucked the trend to perform well in December. But a February 10, 2014, story in Automotive News was headlined “Clouds on the Auto Sales Horizon.”

“Supplies of unsold vehicles have ballooned to the highest level since the recession,” the story’s lead said, “and U.S. sales growth has slowed significantly in the past five months. It’s an ominous combination that could mean a return of bigger discounts and lower profit margins throughout 2014.”

While bad weather may have been at least partly to blame, the Automotive News report quoted Morgan Stanley analyst Adam Jonas as fearing that the market may be shifting.

“The industry stands at a crossroads,” the Jonas quote read. “We really think the best of the U.S. auto replacement cycle is over. The incremental buyer is moving from someone who needs to replace their car to one who just wants to, making financial willingness to lend and credit availability more important than ever.”

Still, the succession of nasty winter storms that froze much of the Midwest, the Southeast and the Eastern seaboard undoubtedly put a crimp on the public’s willingness to go shopping. The weather forced many consumers to stay inside and also hit them in the pocketbook as the cost of home heating escalated.

	The Ford F-Series took the top sales slot for 2013 with 713,960 units. The Chevrolet Silverado was second at 480,414, and the Toyota Camry was third with 408,261. However, Automotive News reported that vehicle inventories are building significantly, which may not bode well for the industry.

Auto manufacturers, dealers and specialty-equipment companies will have to keep a close eye on sales figures as the year progresses and the weather becomes less of a factor. For 2013, these were the top 10 best sellers, according to WardsAuto:

Ford F-Series—713,960
Chevrolet Silverado—480,414
Toyota Camry—408,261
Honda Accord—365,986
RAM Pickup—344,772
Honda Civic—334,805
Nissan Altima—320,723
Honda CR-V—303,827
Ford Escape—295,993
Ford Fusion—295,280

Measuring Sessions

SEMA’s Measuring Sessions programs may be seen as an adjunct to new-vehicle sales data. Manufacturing companies attend these sessions, which allow SEMA-member manufacturing companies to use both electronic and traditional tools to measure for new parts and accessories and to check component fitments on near-production prototypes of new vehicle releases. The sessions provide the attending manufacturers with advance product-development opportunities before the vehicles hit showroom floors.

In 2013, more than 300 companies took advantage of measuring sessions, which are generally held for vehicles that are projected to be the most popular and best-selling models. The top three categories of member interest were suspension, engine and interior components, and the three most requested vehicles were the Chevrolet Silverado, the Toyota Tundra and the Scion FR-S.

Measuring-session vehicles also appear frequently at the SEMA Show each year, reflecting the manufacturers’ beliefs that products for those vehicles will be popular with buyers and, eventually, consumers. For the 2013 SEMA Show, vehicle models that were the subject of measuring sessions and subsequently showed up at the SEMA Show in significant numbers included the Chevy Silverado, the Acura RLX, the Mazda3, the Ford TransitConnect, the Jeep Cherokee, the Ram 1500, the Honda Civic, the Ford Focus and the Ford Fiesta, among others. In fact, almost all of the vehicles that SEMA offers sessions for end up at the Show because of the tendency to feature popular models that offer the possibility of product sales.

Spy Photos

SEMA also tries to keep abreast of pre-release vehicles that are under development. Through the services of outside spy photographers, the association offers readers of SEMA News and SEMA eNews preview images of developmental vehicles captured during test runs. The number of clicks on these images in eNews may indicate the level of industry interest in the vehicle and, by extrapolation, an indicator of how popular the vehicle may become.

The three most clicked spy photos for 2013 were of the ’15 Ford Expedition and Lincoln Navigator (13,576), the ’15 Dodge Charger SRT8 (13,009) and the ’14 C7 Corvette (10,560). The most popular overall category was performance cars.

The three most clicked spy photos for 2013 were of the ’15 Ford Expedition and Lincoln Navigator (13,576), the ’15 Dodge Charger SRT8 (13,009) and the ’14 C7 Corvette (10,560). Perhaps indicative of an enthusiast bias, the performance car category was the most popular, including not only the Charger and Corvette but also the ’15 Dodge Challenger, with 8,264 clicks. Next in overall category popularity were light trucks, including a top-three list that featured the ’15 Nissan Titan (5,004), the ’15 Ford Raptor (4,878) and the ’14 GMC Sierra Denali (4,551).

The most clicked luxury vehicles included the ’15 Porsche Cayenne (2,293), the Lamborghini Aventador (2,164) and the U.S. Spec Hyundai Equus (2,083). In addition to the Expedition/Navigator, the top SUV selections included the ’14 Acura MDX (2,494) and the ’15 Audi Q7 (2,469).

Education

SEMA offers a variety of educational opportunities through the SEMA Education Institute (SEI). SEI encompasses all of SEMA’s educational efforts, including both online opportunities, such as webinars and the eLearning center (www.sema.org/sei/library-courses) and live events such as Education Days at the SEMA Show and the SEMA Product Development Conference. The most popular topics at these offerings provide some insights about where the industry currently places its emphasis.

The most popular seminars during Education Days were those focused on marketing, business management, customer service and sales. The single best-attended session at the 2013 SEMA Show was “Are You a Boss or Leader?”

SEMA members are requesting more educational sessions on automotive technology. The best-attended SEMA webinars deal with customer service, sales and online marketing.

Attendees are asked to suggest future topics and provide feedback on topics of interest in all SEMA post-event evaluations. Typically, the responses are reflective of the session topic being presented, but there appears to be a specific trend for more sessions on automotive technology. That notion has been buttressed in recent SEMA-member commentaries such as those contained in this issue’s “Truck, SUV & Off-Road Gear” (see p. 24) listings, and this issue contains an extensive look at the topic featuring many insights from SEMA Vice President of Vehicle Technology John Waraniak (see p. 84).

The best-attended webinar topics deal with customer service, sales and online marketing. The single most downloaded webinar for 2013 was “The Psychology of Search and The Find-ability Formula: What Is Really in the Mind of the Online Searcher?” And a recent SEMA Town Hall in Sacramento, California, revealed that online marketing continues to be an area of high interest for the industry.

SEMA also gathers information from the industry in various types of surveys. Recent findings show that the most challenging issues facing the industry continue to be hiring qualified employees, concerns about the economy, increasing costs and regulatory issues.

SEMA’s councils and networks also provide feedback that is used to develop relevant educational topics. In recent months, for instance, the Motorsports Parts Manufacturers Council (MPMC) took on minimum advertised pricing (MAP) issues through a seminar entitled “Debunking the Myths: Resale Price and MAP Policies to Control Resale Price Erosion.” The Professional Restylers Organization (PRO) helped develop sessions for the Auto Dealer Track at the SEMA Show and sponsored a webinar from the Automotive Industry Action Group about working with top auto manufacturers.

SEMA Membership

SEMA has 26 member categories that range from manufacturers and retailers to warehouse distributors and publishers. Since 2009, the restorer category has seen the largest growth, with a 48% increase. On the other hand, the number of truck accessory retailers declined by about 43% during the same period, but that category had been decimated during the recession and is now trending upward again.

The top reasons member companies give for joining SEMA are the association’s business resources and solutions, access to its industry communications and its market research. The most popular programs among all members are SEMA’s freight savings, now administered through UPS, and the CarCareONE credit-card program through GE Capital Retail Bank.

While no one can precisely predict the future of the industry, we hope that these indicators at least serve as food for thought within member companies and for executives charged with future planning.