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2002 SEMA: What Recession?


Get it all: 2002 SEMA Show Coverage (11/6/2002)

The line for credentials snakes through the grand reception hall, wrapping around itself to the point where it’s hard to tell where things begin and end. The economy may be in limbo, new car sales may be sliding, but you’d have a hard time telling at this year’s gathering of the Specialty Equipment Market Association (SEMA) in Las Vegas.

The annual event brings together the manufacturers, wholesalers and retailers of aftermarket automotive parts. In all, exhibitors set up a record 1568 booths this year—a 20-percent increase over 2001—to hawk an extraordinarily diverse list of products encompassing everything from performance parts to fuzzy dice.

Even before the ribbon was cut marking the opening of SEMA 2002, over 91,000 attendees had pre-registered, and with thousands more simply showing up, this will be the biggest convention in the organization’s history. In fact, SEMA may top the turnout at the other big Las Vegas trade fair, the Consumer Electronics Show, which drew a crowd of 97,430 last January.

Considering the slowdown of the U.S. new car market, that might seem hard to understand. But “it would suggest,” says SEMA Executive Director Chris Kersting, “that America’s love affair with the automobile remains quite torrid.”

Indeed, the automotive aftermarket is booming, in spite of the U.S. economy. SEMA members—who represent a majority, but by no means all aftermarket suppliers—rang up over $26 billion in sales last year. And while volumes have dipped in a few niches, sales remain solid in most segments, according to industry data.

“Some members expected a softening,” says Kersting. “It hasn’t happened yet.”

The light truck boom is clearly helping maintain the pace. Take Ford’s F-Series pickup line, America’s perennial best seller. On average, buyers spend over $2000 each to improve performance, add ding- and rust-resistant bed liners, personalize the exterior and customize the interior.

Power to the people

2002 Honda Civic Si MugenPerformance parts, ranging from high-output “crate” engines to twin exhaust systems, have traditionally been a major source of industry sales. The segment declined during the ‘80s, as new government regulations and sophisticated computer control systems made it difficult to work on automotive powertrains. But performance is undergoing a major comeback, especially in the sport compact segment, where young buyers are turning relatively low-cost imports, like the Honda Civic and Mazda Protégé, into so-called rice rockets.

Tires and wheels are also among the most popular sellers, and have become favorite accessories of the hip-hop crowd.

But the aftermarket is becoming more mainstream. Exhibitors at the two-week-long SEMA show have plenty of accessories, such as security systems, for the average family. A number of vendors are showing off video systems letting parents monitor what their kids are doing in the back seat without having to turn around.

The annual event attracts an assortment of products both innovative and wacky. Among the former: Rostra's heated windshield wipers that resist icing up. There are plenty that fit into the oddball category, but few are drawing more attention than the lighting accessories from StreetGlow, including LED tire valve covers that light up as you drive.

More show space

Women at SEMAThis year’s SEMA show had plenty of room to fit new displays, what with the Las Vegas Convention Center doubling in size. Sprawling across two million square feet, it’s a challenging task to take everything in—and for vendors to ensure the attention they feel they deserve. That may explain the big “cheesecake factor,” as one observer described it. There was virtually no room to move at the Toyo Tire booth on opening day, as a trio of scantily clad and showgirls seductively signed posters. “Maybe it’s the Maxim factor,” suggested a SEMA official, who asked not to be named, referring to the popular magazine that has revived the pin-up formula for a new generation of young men.

Some of the show’s biggest booths are occupied, not by aftermarket suppliers, but by automakers ranging from General Motors to Hyundai. A decade ago, you’d be hard-pressed to find anyone at the Big Three who’d admit to knowing what SEMA was. This year, a record dozen carmakers are participating, and 13 have reserved space for 2003.

For some, SEMA provides a real world learning lab, suggests Ford Motor Co.’s director of design, J Mays. “It reinforces that there are a lot of different types of customers, many of whom don’t share our taste.”

But quite a few do, especially as automakers put an increasing emphasis on “muscle.”

Chrysler’s “X-Men”

The lackluster performance of the PT Cruiser was one reason the car didn’t do as well as expected with young buyers, suggests Chrysler’s marketing chief, Jim Schroer. The automaker believes the new turbocharged PT Turbo will help, but Chrysler is also working with aftermarket suppliers to come up with a range of accessories that could improve the Cruiser’s appeal to the hands-on sport compact crowd.

That’s a key reason why Chrysler created its new VXT unit. Short for Vehicle Excitement Team, the goal is to “make our cars more easily adaptable to hang-on (aftermarket) parts right up front,” notes the team’s leader, Gordon Heidacker.

In the future, he says, VXT will play a role in product development right from the start. The team has a prototype 400-horsepower Super Cruiser on display at SEMA, as well as a turbocharged Dodge Stratus. It’s not clear if either will ever see an assembly line. But the new Pacifica crossover wagon that debuts next spring will be the first product from Chrysler to go under the VXT microscope.

To encourage aftermarket manufacturers to turn out accessories for its products, Chrysler is making available computerized specifications that had long been considered proprietary. Ford and General Motors are taking a similar approach, and are working with vendors to ensure approved aftermarket parts meet factory quality and reliability standards.

In an unusual move, Chrysler brought 4400 of its dealers to Las Vegas, using SEMA as a backdrop to show them products it will roll out between now and 2007. But there was another reason to bring the dealers along, said Schroer.

Traditionally, SEMA vendors have had little interaction with new car dealers. If you want an aftermarket part, you go to an auto supply store. But automakers like Chrysler now realize there’s a lot of money to be made in accessory parts, whether they be pickup truck bed liners or high-performance brakes. Having those parts at the dealership can improve profits—and enhance a carmaker’s image.

To underscore that message, the struggling company initially planned to bring 30 concept and “tricked out” cars to SEMA this year, double its normal showing. But when the doors opened, the count had climbed to 108. And Chrysler wasn’t alone. Other automakers brought hundreds more.

Gone are the days when SEMA was considered beyond the fringe of the automotive mainstream. These days, it’s become one of the industry’s most important events as automakers and vendors alike search for the formula that not only maintains, but enhances America’s love affair with the automobile.

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