According to the Specialty Equipment Market Association (SEMA), 1999 manufacturer sales of specialty equipment totaled $8.17 billion, which turned into retail sales of $23.24 billion. (You can pick your chin up off the floor, now.)
As a collision repair shop owner, you can cut yourself a slice of that multi-billion-dollar pie by offering restyle products to your current customer base and to customers you never targeted before.
Statistics show that the average driver is involved in an accident once every seven years. So even if the quality work and high customer service you offer keep customers coming back for repeat business, you probably won’t see that business for several years. In addition, there’s a saturation of collision repair shops across the country. Open your local Yellow Pages and count the listings for autobody shops. You’re all competing for the same business – and not everyone can emerge a winner.
On the other hand, the specialty equipment market has experienced an average annual growth rate of nearly 9.5 percent throughout the last decade. To give you a frame of reference, in the same time, the overall automotive aftermarket grew by an average of only 3.4 percent annually.
Not sure your technicians are up for the challenge? Consider this: Nothing you do in the way of restyling will require as much experience as repairing collision-damaged vehicles. Why? Because you’ll be working with something new. In addition, most of the restyle products sold are bolt-on and made for easy installation. (Sounds like you’re out of excuses.)
The standard definition of the specialty equipment market includes all products and services used to modify the performance, appearance or handling of vehicles and related equipment. But there’s an important distinction to keep in mind when defining the market: Specialty equipment products are purchased by choice rather than necessity.
Within the specialty equipment market, there are a number of product and service niches. According to SEMA, the seven principal ones are light-truck, restyling, street performance, restoration, off-road, street rod and custom, and racing.
From 1990 to 1999, the accessories and appearance products segment of the specialty equipment market grew from $1.85 billion in sales volume at manufacturer’s selling price to $4.44 billion – a 140 percent increase in just nine years. The drive behind this increase is consumer enthusiasm for light-truck products, electronics and general restyling products.
This restyling segment consists of dress-up and creature comfort items, including such products as air dams, bed rails, bedliners, body decals and graphics, bumpers, camper shells and caps, cargo racks, convertible tops, dashboard covers, deflectors, fender flares, floor mats, grille guards, ground effects, headliners, light bars, luggage carriers, push bars, running boards, seat covers, spoilers, sunroofs, tailgate nets, taillight lens covers, tire covers, tonneau covers, visors and window film. (Phew!)
According to SEMA, 75 percent of the accessory market is dedicated to trucks, with domestic models accounting for most of the spending. But don’t overlook compact performance vehicles – mostly imports, like the Honda Civic, Acura Integra and Toyota Celica. They account for 18 percent of the accessory market and are dominated by 18- to 25-year-olds, says SEMA. This segment of the market grew an incredible 152 percent from 1997 to 1999. Specializing in one of these segments may be just the ticket your shop needs for increased profits.
"Shops have to be realistic about what they can offer their customers," says John Jeffries, editor and publisher of "SEMA News." "Floor space considerations and shelving issues aside, trying to be all things to everyone usually ends in failure."
Rather than attempting to offer every possible combination of products available, Jeffries suggests that retailers expand slowly. "Maybe launch into window tinting first, and concentrate on that," he says. "Once they’ve created a name and some recognition, then they might consider branching out to painting or lifting."
Setting Up Shop
As a collision repair shop, you’re in a great position to start your own restyling business because you already have customers in your shop every day. So why not upsell them on a rear spoiler, window film or ground effects? You also have files on customers whose cars you’ve repaired in the past. Odds are good that many of those customers would be interested in giving their cars a facelift.
Interested? If so, one good move would be to join a trade association like SEMA, the Motor and Equipment Manufacturer’s Association (MEMA) or the Automotive Aftermarket Industry Association (AAIA). The purpose behind groups like these is to help members’ businesses succeed. For example, SEMA basically works as a network to help establish a restyling business. The organization can put you in touch with accessory manufacturers and show you how to install the equipment once you’ve decided what to offer. If you’re not sure what accessory items would sell best to your customer base, SEMA has a market research department that can give you statistics on how many rear spoilers were sold in Spokane in 1999, how much the sale of bedliners increased in Omaha, etc.
"Retailers need to be sure there’s enough interest in the market in their area to keep a business growing," says Jeffries. "By joining SEMA, they can request specific demographic information and sales trends on a number of parts. The key is to educate themselves before they commit any funds."
Jeffries also suggests that would-be retailers attend related trade and consumer events, subscribe to related magazines and visit other shops that already offer restyle products.
Once you’ve determined whether there’s enough interest in the market in your area, how should you market your new offerings?
"The best way is to create well-written, informative press releases and to invest in professional-quality photos," says Jeffries. "Then go to a local newsstand, buy every market-related title out there and send out press releases for each magazine. These are free services, and once you start getting responses back, you can see which magazines tap into your market and then concentrate your advertising there."
Jeffries warns against trying a "shotgun" approach – where you advertise in every magazine out there hoping to hit something. Instead, find out which ones reach the serious enthusiasts and spend your money there.
You can also market your restyling business by displaying in the waiting area of your shop the actual products you have to offer. Since people come into your shop eager to pick up their newly repair vehicles, why not upsell them and suggest a sporty new spoiler or a sleek sunroof as a way to make them look even better?
"Just about any automotive-related business could easily expand to include restyling services," says Jeffries. "It just makes sense. While you’re repairing the damage, why not add that ground effects kit [your customer] always wanted or that spoiler [he] saw last week. It’s just a natural progression."
Restyling Your Business
Today, the automobile is becoming less and less of a mass-market product. Vehicle owners want their Jettas, Jeeps and Jaguars to stand out in the crowd of other similar makes and models. You can help them achieve individuality – and help yourself achieve increased profits – by offering restyling products in addition to your current services. Your technicians are capable of bringing a twisted and mangled lump of metal back to pre-accident condition, so they’re more than capable of installing a bolt-on accessory item.
According to "Automotive Marketing," total sales of light vehicles (cars and trucks) reached a new record of 17.4 million units in 2000. And when new car sales are strong, says Jeffries, restyling sales are strong, too.
"Americans love their vehicles and Americans love being different," he says. "Whether it’s a trick color-shift paint job or a complete off-road design, we want our vehicles to reflect ourselves. Restylers are really in the driver’s seat because they can tailor the jobs to meet any budget. [Whether consumers] spend $500 or $10,000, there’s a way to make their daily drive a little more exciting."
Writer Melissa McGee is managing editor of BodyShop Business.
Photo courtesy of SEMA.
1999 Specialty Equipment Market Sales