MARKETING TRENDSDiesels Create Opportunity for Specialty Equipment Sector DIAMOND BAR, CA (Sept. 6, 2006) - They're powering street trucks running quarter-mile times under nine seconds. They power Opel's Ecospeedster GT, producing an astounding 113-plus mpg and a top speed of more than 155 mph. Audi conquered Le Mans with them, another just ripped though Bonneville at 325 mph, and there are several national race-sanctioning bodies dedicated solely to them. Diesels have come a long way, and according to the Specialty Equipment Market Association (SEMA), they're opening doors of opportunity for specialty equipment sellers. Today's diesel engines offer race-proven performance and exceptional fuel economy, thanks to technological advances from both the original equipment manufacturers and the aftermarket.
What's the buzz? Today's diesel technologies are starting to look mighty good to a large cross-section of inspired people. R.L. Polk & Co. reported a 9 percent average annual increase in diesel registrations from 1994 to 2006, and J.D. Power & Associates predicts U.S. diesel sales will more than double to a 10 percent market share by 2012. Currently, more than 50 percent of diesel owners have performance exhausts, upgraded air intakes, performance chips/computers, performance wheels and tires, and tinted windows. Thirty-five percent of the remaining diesel owners plan to buy these items - and this doesn't even take into account all of the other diesel products available. Today's performance diesel market is often typified by the deep-roaring diesel pickup - often with a modified suspension and/or towing another "toy" behind it - ripping down the highways. New horsepower-boosting performance products, along with a positive buzz in the media, have helped expand the diesel enthusiast market. With modern diesel trucks becoming quieter and more powerful, industry experts say the diesel market is growing. Most expect diesel sales to increase in the coming years. Emission standards are changing too, with cleaner, ultra-low sulfur fuel mandates giving the aftermarket opportunities for retrofits and upgrades. This past summer, SEMA surveyed automotive enthusiasts through an online survey that was e-mailed to subscribers to 21 different automotive enthusiast magazines during the month of June. After collecting nearly 5,000 responses, the association released the results, which can provide a business owner seeking to expand service offerings with some food for thought.
Preferred products and accessories Exhaust kits dominate the list of the Top 20 performance parts diesel enthusiasts purchase. Over the past two years, about 53 percent of those surveyed have purchased exhaust kits, which generally increase horsepower and torque by reducing back-pressure and exhaust temperatures at a reasonable price.
Table 1. Top 20 Diesel Parts and
Accessories PurchasesRANKACTIVITY200620051Exhaust kit: muffler, pipes, etc.53.1%53.8%2Performance air filter50.1%38.5%3Cold air intake conversion45.6%20.5%4Engine performance chip/computer42.9%35.9%5Window tinting/lamination38.3%43.6%6Custom floor mats33.7%38.5%7Plus-sized tires33.7%N/A8Alarm system33.4%17.9%9Custom gauges32.6%28.2%10Satellite radio28.3%15.4%11Custom wheels24.8%33.3%12Suspension: shocks, springs, etc.24.5%33.3%13CD stereo24.5%25.6%14Exterior lighting24.0%15.4%15Turbocharger22.4%17.9%16Custom grille22.1%17.9%17Lift kits20.5%17.9%18Performance tires20.2%N/A19Custom fog lights19.4%30.8%20Stereo amplifier19.1%23.1%(Table source: SEMA) Air intake performance filters also have increased in popularity among diesel enthusiasts. Several companies that manufacture both diesel exhaust and air intake kits have indicated that the demand for their products has grown over the past couple of years. Engine performance computer tuners are also among the most popular diesel upgrades. According to the Automotive Lifestyles survey results, around 42 percent of diesel enthusiasts have purchased engine performance tuners.
Where do diesel enthusiasts shop? While the No. 1 retail channel in 2005 was the custom shop/installer - those independent shops that sell and install various restyling and performance parts and accessories - more diesel enthusiasts are turning to the Internet to purchase their performance parts.
Table 2. Where Do Diesel Enthusiasts Shop?RETAIL CHANNEL20062005Internet retail Web site28%13%Custom shop/installer17%36%Independent parts store/installer13%13%Do not know10%5%Brand/manufacturer Web site7%10%Catalog/mail order7%5%Auction Web site (e.g. eBay)6%5%Chain auto parts store4%8%Magazine mail order4%0%Vehicle dealership1%5%Auto/truck show1%0%Retail department store1%0%Not applicable1%N/ANewspaper classifieds0%0%(Table source: SEMA) This could be a result of consumers spending more time on the Internet. According to Advertising Age magazine, consumers are spending an average of 30.5 hours per month online this year versus 27.8 hours per month last year. This year, 28 percent of diesel enthusiasts surveyed said that they purchased a majority of their specialty-equipment parts and accessories on the Internet.
Where do enthusiasts play? SEMA asked these enthusiasts to indicate the activities and hobbies that they participate in most often. Both in 2005 and 2006, diesel enthusiasts indicated that they prefer to work on their cars or trucks more than any other activity.
Table 3. Top 10 Hobbies That Diesel Enthusiasts Participate InRANKACTIVITY200620051Working on car or truck72%67%2Off-road driving57%46%3Hunting or fishing56%36%4Camping or hiking54%38%5Driving for pleasure47%59%6Reading auto enthusiast magazines47%N/A7Driving vacations45%46%8Going to car shows44%49%9Watching live racing/auto events42%36%10Motorcycling39%33%(Table source:
SEMA) Many of the other top activities, including off-road driving, camping and hunting, could indicate that owning a diesel-powered vehicle fits these enthusiasts' lifestyles. Knowledge of what their existing and future customers do for fun could help give specialty-equipment manufacturers and service providers a more educated idea of how to effectively target these consumers.
Profiling the enthusiast The number of diesel enthusiasts has grown over the past two years: Just 3.3 percent of the survey's respondents in 2005 were diesel enthusiasts versus the 9.6 percent in 2006.
Table
4. Diesel Enthusiast DemographicsFACTORSEGMENT20062005GENDERMale
Female
Declined to respond97%
2%
1%97%
0%
3%AGE16 - 24
25 - 33
34 - 42
43 - 51
52 - 58
59 +
Declined to respond14%
27%
27%
15%
8%
7%
1%11%
10%
10%
16%
31%
13%
0%EDUCATIONSome high school
High school graduate
Trade/Vocational graduate
Some college
College graduate4%
22%
16%
29%
28%5%
13%
18%
23%
41%TOP 5 JOBSSkilled trade
Technical profession
Police, fire, postal, military
Business owner: non-automotive
Middle management: non-automotive20%
17%
10%
8%
5%13%
16%
3%
8%
3%HOUSEHOLD INCOMES$15,000 - $45,000
$46,001 - $75,000
$76,001 - $105,000
$105,001 +
Declined to respond18%
30%
24%
18%
10%16%
26%
26%
18%
15%(Table source:
SEMA) Demographic characteristics of existing and potential future customers are key pieces of information to understand a company's
target market, says SEMA. According to the survey's respondents, the diesel market may be shifting to consumers in their mid-20s to early 40s - a sign that the younger generation of long-term consumers is embracing diesels. The association says a number of exhibitors specializing in diesel technologies will be exhibiting at this year's SEMA show, providing an opportunity to find diesel-related performance products that consumers will be buying. In addition, the show will feature the latest installation techniques and sales strategies through seminars and demonstrations by exhibitor technical and marketing experts.
(Source: SEMA) 
