It's still early in 2008, but already a trend is emerging. Automotive aftermarket companies are clearly assessing how the news of a U.S. economic downturn will impact their businesses. Low-cost service providers and companies that target late model vehicles are ramping up advertising efforts to attract vehicle owners who are looking to save money by extending the lives of their vehicles.
Additionally, the original equipment service channel is looking at strategies that retain customers through loyalty. Pricing is on everyone's minds. Aftermarket participants are trying to determine what North American vehicle owners see as discretionary spending and to what degree vehicle owners will cut back on vehicle-related discretionary spending.
Fenders, hoods, ground effects and spoilers are added and changed on vehicles purely for aesthetic reasons. Across the general vehicle owner population, only 7 percent report having performed exterior modifications during the previous 12 months.
However, further investigation into enthusiasts' behaviors produces much higher usage rates:
- 52 percent of modification enthusiasts report adding ground effects.
- 49 percent of modification enthusiasts report adding customized paint.
- 49 percent of modification enthusiasts report adding a spoiler.
Although the installation rates for these components are high among enthusiasts, they are typically installed later in the modification process. In fact, exterior modifications are the first choice for less than 1 percent of enthusiasts. Only 16 percent install a spoiler as one of the top five modifications.
Frost & Sullivan's research indicates that most body panel products are installed in year two of the vehicle's development phase. Enthusiasts report three key reasons for this decision process:
- Low impact on drivability.
- Cost.
- Access to professional painting and installation services.
Frost & Sullivan's research failed to yield any correlations among the purchase of body panels, ground effects, spoilers and other types of modifications (tires, wheels, engine and fuel management). Without these types of correlations, it's a challenge for the industry to drive sales through cross promotion.
Frost & Sullivan also researched enthusiasts' vehicle choices and demographics for insight into body panel purchase behaviors, producing the following profile:
- Male or female
- Age 20 to 59
- Annually spends in excess of $3,000
- Income in excess of $80,000
- Less likely to be a light truck owner
- Slightly more concentrated in the eastern region of the United States
- Show participants
Due to the broad range of enthusiast characteristics, the industry faces the challenge of identifying potential purchasers. What will be the impact of an economic downturn on the body panel segment? All vehicle modification components are discretionary items.
Body panels are a planned purchase, but occur very late in the modification process. Should the economic downturn continue, late stage modifications, especially those with a high cost, are susceptible to being eliminated from the development plan. The economic situation poses a real threat to body panel sales, and it's expected that sales will start to decrease later in 2008 if the threat remains.
Featured products
1 Ground effect kits
Bushwacker Inc. is now offering ground effect kits designed to complement the style of a vehicle while adding a special edition look and up-sale value. Formed and painted at Bushwacker's factory in Portland, Ore., the components of the ground effect kit install with 3M tape and screws for a dependable OE fit that will last the lifetime of the vehicle, says the company.
2 Lip kit
AIT now offers the DL series styling lip kit for the 2008 Scion xB. Made of urethane material, the kit will help drivers customize their xB to stand out from the crowd, the company says. Installation instructions are available with each kit.
Mary-Beth Kellenberger is a consultant with Frost & Sullivan's North American Automotive and Transportation practice. She focuses on monitoring and analyzing emerging trends, technologies and market behavior for services, personnel and component sales in the North American Automotive Aftermarket. For more information about Frost & Sullivan, visit
www.frost.com.
