2002 SEMA: News in Brief

November 6, 2002

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


SEMA SETTING RECORDS
What if you threw a recession and nobody came? That seems to be what’s happening in the aftermarket industry, according to SEMA officials. Initial figures suggest that member sales continue to climb this year, on top of 2001’s strong, $26 billion in volume. “Some members expected a softening,” said SEMA Executive Director Chris Kersting. “It hasn’t happened yet.” Meanwhile, with the Las Vegas Convention Center’s big expansion this year, SEMA was able to fill 25 percent more exhibit space for this year’s gathering, with more than a quarter of the 1568 exhibitors in the show for the first time. With a record 91,000 attendees pre-registered and thousands more paying their entrance fees on site, SEMA’s 2002 event just might surpass the attendance of the annual Consumer Electronics Show, officials noted, to become the biggest public event held in Las Vegas.

MARKET FRAGMENTATION DRIVING BIG CHANGES
The more the competition, “the more a customer expects exactly the product he wants,” said Chrysler CEO Dieter Zetsche. And that, he and other industry executives said, is driving a rapid fragmentation of the U.S. new car market. In response, automakers are likely to flood the market with an array of specialty vehicles and low volume spin-offs of more mainstream products.

PASSENGER CARS STAGING A COMEBACK?
A growing share of the parts and accessories at this year’s SEMA show are targeted at the booming light truck market. But a surprisingly large number of sedans, coupes, wagons and sports cars were among the concepts on display. “We are convinced” of the need to shift the focus at Chrysler back to passenger cars, said CEO Dieter Zetsche. But not everyone sees a real revival. Why have sales of passenger cars, and sedans in particular, fallen so sharply in recent years? The answer is simple, according to Ford design chief J Mays. They’ve become as boring as milquetoast and don’t inspire people like the sedans “prevalent in the ‘50s and ‘60s.” To bring back the sedan, he added, new designs will have to “come back with a lot of strength…and a lot of desire.”

2002 Ford FR100 concept

2002 Ford FR100 concept

FORD GOES FORWARD INTO THE PAST
While most of the show cars on display in Las Vegas are spin-offs of current production models, Ford took a look in the rearview mirror with its FR100 concept truck. It began life as a 1953 F-100 pickup, noted Dan Davis, head of the automaker’s Racing Technology team. Six inches were cut out of the bed, while the cab was stretched an equal amount. Under the hood, the FR100 featured the new 5.0-liter Cammer crate engine, a high-performance spin-off of Ford’s mainstay 4.6-liter modular V-8. The new powertrain puts out an estimate 425 horsepower, and will be offered in packages for use in a variety of racing configurations.

2002 Jaguar racing concept

2002 Jaguar racing concept

WILL JAGUAR RETURN TO U.S. RACING?
That’s the idea being tested by the first-ever concept vehicle the British automaker has brought to SEMA, a high-performance version of the compact X-Type sedan. “There is a lot of interest in getting back on the track in North America,” revealed Jaguar spokesman Simon Sproule, most likely in the TransAm racing series. A decision could be made in the near future. And it would not be linked to any decision on the future of Jaguar’s struggling Formula One efforts, Sproule emphasized. Even if the automaker doesn’t return to U.S. racing, the new prototype could pump up interest in high-performance custom parts for Jaguar production vehicles.

SALES BETWEEN IRAQ AND A HARD PLACE
Booming demand for performance parts and vehicles could come to a screeching halt should the nation’s oil supplies be curtailed by a war with Iraq, conceded Mike Zevalkink, Ford’s performance chief. “There’s uncertainty” as war talk continues, “and yes, we’re concerned,” he said. And that is affecting—and in some cases delaying—decisions about new products that might be more prone to problems should oil prices rise or fuel supplies become scarce. But Zevalkink insisted Ford won’t put high performance plans on hold until the Bush Administration finally acts on Iraq. “You can’t put things off forever,” Zevalkink stressed.

AUTOMAKERS TO WORK MORE CLOSELY WITH AFTERMARKET
Cooperative efforts between automakers and aftermarket suppliers are expanding, industry officials noted. Both Ford and Chrysler revealed they are now offering partsmakers access to once-proprietary information, including detailed CAD data. The reason is anything but altruistic. Chrysler officials believe the lack of aftermarket parts may have reduced demand among young buyers when the PT Cruiser first came out. They hope that as more performance and appearance parts become available, demand among Gen-Xers will grow. Meanwhile, Ford hopes to prevent a similar problem. “When we come out the (next-generation) F-150 pickup, we want to have the hardware there” for buyers, said North American product development chief Chris Theodore.

BUDGET? WHAT BUDGET?
This year’s SEMA show has attracted a record 12 automakers who are displaying hundreds of prototypes and tuner vehicles. That includes the official, “honored” marque for 2002, the Chrysler unit of DaimlerChrysler. The show is a way to enhance appeal, especially with young buyers, noted the automaker’s marketing chief, Jim Schroer. “It shows off what an OE can do with its gearheads when it lets them,” he said. And show off, Chrysler intended to do, by doubling the number of concept vehicles it usually brings to SEMA, typically about 15. But instead of stopping at 30, it wound up with 108, Schroer confided. And “you might even see some of them in production,” chimed in Chrysler’s product planning director, Mike Evans.

HYUNDAI PLOTTING LIGHT TRUCK, 1 MIL SALES?
While many in the crowd at Hyundai’s press conference were just waiting for their Troy Lee-designed Tiburon Rally Car Hot Wheels, Hyundai product planning director David Ossenmacher surprised them with two real bits of news: one, that Hyundai’s goal is one million sales in the U.S. by 2010, and two, that they’re plotting an all-new product in the light-truck area. Then he reminded people that in 1999, just before Hyundai’s first SEMA appearance, the company ranked only ninth among import nameplates. “Now we’re behind only Toyota and Honda, and we’re creeping up on Nissan for third,” Ossenmacher said. “As we move to Tier One status, we have to improve our resale values, so we’re selling on product attributes beyond low price and warranty.” —Bob Hall

GM OPENING ITS ACCESSORIES BOOK
As GM gets ready to issue its first SS specialty trucks and shows off plenty at the 2002 SEMA show, it wants to make sure no one misses one of its best-kept secrets: its specialty accessories catalog. "We've got 60 percent of the crate engine business...but a lot of people don't know that," said Doug Harberger, GM's service and parts operations veep. "We're going to offer three new crate engines next year. We're going to come out with the 8.1, the 5.72 and the ZL1." Harberger said GM needs to double performance aftermarket participation among its 7,400 U.S. dealerships. Currently, only about 250 to 300 countrywide are doing the bulk of those sales. They are the ones who best understand the bits and pieces of performance equipment selling, he says, since they're most heavily involved in racing or are near racing events, or have owners who have given them the green light. That also means thinking beyond the front-loaded V-8 market and moving down to capture tuner wannabes who can't afford a $2000 supercharger for a four-cylinder Chevy Cavalier or Pontiac Sunfire that could add 25 horsepower, boosting it to 200-plus ponies. But, he said, they probably could swing the $700 it would take for a "plug and play" cam to jack up horsepower another 10. --Martha Hindes

WJR AUTO REPORT: 2002 SEMA SHOW

Listen to this WJR Auto Report

The action in Las Vegas this week isn’t at the casinos. It’s at the convention center where the Specialty Equipment Marketers Association is holding its annual conference, where SEMA members will show everything from high-performance engines to automotive security systems.

In all, Americans will spend more than $25 billion to improve the performance or simply to dress up their cars this year. And that figure has grown almost every year for decades, even during economic downturns. A large number of the players in this business are small, Ma-and-Pa firms.

But there’s going to be a big showing by the major automakers this year, both domestic and foreign. Companies like General Motors, Chrysler and Honda have discovered there’s a lot of money to be made selling aftermarket parts. The average Ford F-150 owner will spend $1000 or more on accessories. And there’s a growing market for performance parts for small cars like the Honda Accord. In the current economic climate, automakers know that’s money that can help prop up their sagging bottom lines.

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