Beauty on the inside

May 7, 2010

The love affair we have with our vehicles is a diverse stew of emotion and function. Accessories serve all elements of this stew, acting to spice up the experience of vehicle ownership and use. But for all the fantastic exterior accessories, performance and ride equipment that exist, there is a very powerful segment of restyling which speaks purely to the emotions of a vehicle owner – and that’s interior trim accessories.

Obviously there is function in items like leather and protective seat covers, sunroofs and other trims; but the interior is where drivers spend the most time with their vehicle, and there is great value making that space theirs. Accessorizing the interior of a car, truck or SUV enhances the comfort, security and appearance that consumers demand of their vehicles. This is a restyling segment loaded with great opportunities for growth and profit.

‘Tis the season

Seasonality directs so much in the automotive world, and interior accessorizing is no different. With spring already begun and the summer driving months ahead, there are restyling opportunities. Ron Leslie, national sales manager of Katzkin Leathers, Montebello, Calif., notes that interior accessories “all peak with car sales season, April through August.”

Mike Cioffi, general manager of Automax-BeneVento, Mount Vernon, N.Y., observes that demand for his company’s wood trim products is part of the seasonal excitement.

“Once we get into the spring time we see a major boost,” he says. “You see this throughout all the aftermarket. People get excited to buy cars, to hook up their cars. Especially on the East Coast. As soon as you get some nice weather, all the trim shops are full; people get their tax refund checks and people can’t wait to hook up their cars a little bit.”

Director of sales and marketing for Bestop, Jim Chick, says that “as our interior items are for the Jeep Wrangler platform, there is definitely a selling season to trim accessories – primarily in spring.”

Spring, indeed, is “a very busy season for interior restyling,” adds Mitch Mikoda, from Sherwood Innovations Inc., Toronto, Ont. “Similar to spring cleaning, customers are cleaning up their vehicles for the upcoming summer season and want to ‘spice it up.’ Some people choose to buy new vehicles, but others may tend to hold on to their vehicle longer and invest in a dash kit to revitalize its interior and make it feel just as new as the car still drives.”

For those buying late-model used cars, “where they save on the cost of the vehicle, they may choose to spend more on accessories,” Mikoda adds.

And though spring is an especially active time for interior makeovers, Mikoda notes that fall, and three to six weeks before Christmas are good selling seasons, too.

Creating luxury

But weather is far from the primary motivation for consumers to seek interior accessorization. A fundamental purpose of interior trim is the appearance and experience of luxury. Every model of vehicle has any number of trim and accessory packages that feature various options addressing performance, functionality, entertainment, personalization and luxury. From a restyling perspective the large price gap between the lower model and the high-end model offers a price-point opportunity for sales and installations of aftermarket interior trim accessories.

Tops and sunroofs which, although having exterior exposure, essentially affect the interior experience of a vehicle, thus falling under the heading of interior trim. These types of accessories’ functionality have a direct relationship to the weather and consumers’ use of their vehicles in the outdoors.  These types of accessories’ functionality have a direct relationship to the weather and consumers’ use of their vehicles in the outdoors.

Miles Hubbard, director of marketing for Katzkin and marketing partner with Webasto Product North America, Fenton, Mich., gives a clear explanation: “In most cases a consumer has already made up their mind before they walk into a dealership what vehicle they want. The smart dealer will not order models loaded to the teeth. Rather, they will put leather and/or a sunroof in, making it look like the top-of-the-line model so the consumer sees what looks like the same car as they saw at another dealership for $35,000, only this one is $28,000 and they buy it.”

Hubbard continues with, “At a new-car dealer most customers want leather and sunroofs, which are the most-sought options. The problem for the consumer is that auto manufacturers bundle those options into option packages that cost up to $8,000. If you want leather you also have to get the wheel and tire package, and GPS, and this and that. You can buy a base or mid-level vehicle and just throw leather into it for $1,295 – you just saved [the consumer] $6,000-$7000 for a car that basically looks like the luxury group. Because it is something that the consumer wants, the dealer will put the leather or sunroof in, making the sale, the margin on the accessory and its installation, and the customer is happy.”

This is also achieved on an even more economical scale through wood trim kits. Automax’s Cioffi gives a specific example of how his company’s BeneVento wood trim kits, which might cost the consumer only few hundred dollars, can achieve a luxury upgrade for a buyer at a dealership.

“Take, for example, the Honda Accord,” Cioffi offers. “The base model might be around $24,000 and the more exquisite model is over $30,000. The guy that can only afford the baseline car can still have the beautiful look and interior of the upscale model at a fraction of the cost.”

Over at Sherwood, Mikoda agrees, adding,” Our product is mostly an impulse buy,” he says. “Some people want their base model to look like the upgrade, but don’t want to pay the big option price at the dealership, so our product is the obvious choice.”

Dealership clientele

These examples illuminate a clear opportunity for restylers in serving their car dealer clients while reinforcing the fundamental basis for the restyler/dealer relationship: to help your dealer clients make money.

Pricing pressure on vehicles comes from a slow economy and an evermore educated customer base that uses tools like the Internet, the Kelley Blue Book and Edmunds data, and can essentially ‘know’ the invoice price of a car. Dealers’ profit on the vehicle sale is often eroded to a very low margin. Providing interior trim upgrades allows the dealer a profit channel they might not otherwise have.

Most accessory manufacturers and restylers see the dealer relationship as a bright spot in the challenging economic climate that we’ve seen for the past 18 months and for the seeable future. Leslie explains that “dealers are really starting to understand that if they do some custom stuff to vehicles on their lot, one or two that are unique using, say, Tuscany or Barracuda or some of the custom options Katzkin offers, the customer literally buys the car from that dealership because that’s the only place they can get it. And locking in those customers has become so valuable to the dealership.”

Dealers, Mikoda adds, remain “a great source of business for interior restyling products, especially for our many installers. Dealers will use the dash kits as incentive for customers to buy their cars over competing dealers and are able create larger margins on the sale of an accessorized vehicle.”

Service departments are also opportunities for interior trim sales. Service writers are in unique positions with car owners where the consumer is often receptive to improvements for their vehicle. As a restyler expediting for your dealership customers – and you are only working through the sales department – using the existing relationship to expand your presence into the service and parts departments can often reach a market that was missed. Here again there’s an opportunity for the restyler to realize business growth while creating an additional revenue stream for their client, a win-win scenario with little to no additional investment cost.

Interior trim accessories also can provide function and profit for the used-car dealer. Gaah Automotive’s interior accessories include seat covers, headliners, door panels and carpets. Marketing manager Martin Brown notes that “Our products are less about personalization and more about function. Generally our customer replaces the seats/interior when they get worn out or start looking poorly. Our customers (trim shops) have always relied on used-car dealers for a source of business.”

In some cases, trim products can not only improve the appearance of a used vehicle but can function as a customization tool that build an appetite for used-car buyers Covercraft’s Rick Messemore explains that “we provide interior products to dress up interiors – products like DashMat, SeatSaver, SeatGloves and Premier Floor Mats. These are all custom products and items like the [dash and floor mats] can be personalized with embroidery or embroidered logos. All of these products can provide protection for new vehicles or cover up any wear and tear of older vehicles.”

Retail space

The retail market for interior restyling remains a major underserved segment. Speaking for both Katzkin (leather seat covers) and Webasto (sunroofs), Leslie notes that, “nine out of 10 people don’t even know you can have leather or a sunroof put into their car. As we continue to grow consumer awareness, retail sales will become the largest segment of our business.”

He continues: “One of the tactics that has been successful by restylers for starting the retail side of the business has been to partner up with other accessory companies in their area that have retail traffic and manage them much like they manage their dealership customers with displays and point-of-sale marketing materials.”

This partnering with other, non-competing, accessory shops is another example of a win-win scenario.

But growth into interior trim products might simply be an extension of services your shop already offers. As Automax’s Cioffi observes, “Restylers have to remember to look at other products like wood kits that are so easy to install. You are already in the car, say, if you are a chrome guy or a pinstriper, and a wood kit is so easy to install. You don’t get dirty and the learning curve is so flat. -¦ Why not add more to the package?”

Dash kit maker Mikoda notes that the way of doing business “has changed in the current market in that you need to work harder at making a sale; sometimes a picture will not do. Often, kits need to be installed in the showroom in order to generate interest. Customers want to see and feel what they are purchasing as opposed to simply viewing a generic picture.”

And, Mikoda, notes, “sometimes it is also necessary for the dealers to step up and include the dash kit as an accessory on the options sheet, or include special fliers or eye-grabbing mirror hangers to illustrate that this car is unique and has greater value than the other vehicles on the lot.”

Friction with the DIY crowd can dissuade restylers from attempting profitable retail business. The Internet can create competition, with non-brick-and-mortar shops that sell accessories for less than a restyler can offer. But as restylers, we are the experts in knowledge and installation experience, and this should be capitalized on and, indeed. marketed as such. Jim Chick from Bestop encourages restylers to confront this head on.

“Sell an affordable package for installation to compete against low-price Internet retailers. Removing the inconvenience, wait and barriers to installing an after- market part is a value to consumers.”

Vehicles that do well

Who’s buying interior trim accessories and for which vehicles is important data to have knowledge of. Restylers generally know their clients, but manufacturers often have a broader data collection and analysis function and they should be consulted for tips on who you might be missing.

Cioffi explains that in his urban New York City area, “we see less dash kit installs; but in the boroughs we find lots of hunger for the product. In the suburbs and more rural areas we see very little installs. Then you look at regions like Texas, where everybody loves wood dash kits. We sell a majority of our kits for Tahoes, Rams and F-150s. What is exciting for us in 2010 is our introduction of the Hyundai Sonata kit.”

Ron Leslie says the most popular segment for both sunroofs and leather continues to be the mid-size car segment – your highest volume vehicles: Camry, Accord, Altima and Sonata, followed closely by the full-size trucks and SUVs, which are huge segments.”

“Vehicle segments,” Leslie continues, “are typically defined by price, size of vehicle and target consumer. Those vehicle segments tend to be very open to leather and sunroof upgrades. It fits the demographic and psychographic profiles. “Anytime there is a new car coming out, it tends to be an opportunity and an exciting time. The new GM SUVs, like the Equinox and Traverse, and the perennial all-star, the Tahoe, have seen great improvements and continue to be great users of our products. Toyota continues to be the biggest brand out there for leather and sunroof upgrades.”

Such luxury vehicles as Lexus, Lincoln and Infiniti, notes Mikoda, are leading the way in interior restyling… Factory-match kits are very popular for people who would like to add more wood grain to their elegant interiors, and the dash kits are a great match.”

“Other popular vehicles include base models of any brand for individuals who do not want a high-end radio or all the gadgetry that comes with the high-end models, “Mikoda says. “A customer buying a base vehicle will select interior accessories that make them feel as if they bought the high-end model, except at a fraction of the cost.

“The luxury cars are selling, and the aftermarket parts are selling for those vehicles. The economic downturn affects the poor first, then the middle class, very seldom affecting the wealthy.”

And remember, Mikoda notes, that even while the aftermarket is dependant on cash flow from financial institutions, “as soon as the banks relax the credit again things will return to normal.”

All the manufacturers consulted offer a range of marketing assistance and training that can help launch your entry into the interior trim segment, or to improve on what you are already doing.

Emotion commands so much of the restyling market and interior accessories are as exciting for the consumer as it is for the bottom line.