The Diesel Performance Market

Oct 15, 2010

Diesel Market Dynamics

• Strength in the diesel pickup truck accessories market is linked to a customer base with relatively high income; and to demand for diesel work trucks.
• Diesels excel in areas of performance, longevity and cost.
• Diesel performance is a growing niche market segment.
• Owners tend to keep vehicles longer;
• Owners demand power and performance;
• Significant growth in youth market suggests long-term interest.

Leading diesel pickup truck OEMs:

• Dodge Cummins
• Duramax
• Power Strokes

Diesel market includes passenger cars as well:

• Volkswagen Jetta and Golf;
• Mercedes
• BMW
• Subaru

Leading power-adding accessories:

• Chip
• Intake
• Exhaust

Additional demand for “deep engine” parts:

• Clutches
• Pumps, etc.

Consumers are interested in upgrades for:

• Performance
• Economy
• Towing
• Hauling
• Drag racing
• Sled pulls

Diesel shop challenges

• Staff education
• Internet sourcing
• Market differentiation
• Fewer new truck purchases
• Fewer products for new trucks
• Access to inventory and wholesale pricing to compete with the OE dealer
• Consumer concerns
• Fuel costs
• Emissions, especially in California
• Reduced efficiency due to emission standards
• Government involvement and regulations
• Future impact is unknown
• California Air Resources Board rulings on emissions testing
• EPA restrictions

Opportunities for diesel performance shops

• Competition diesel market is tied to street performance diesel market.
• New products are shown at events.
• The diesel racing market:
• Becoming more defined;
• Using more engineered technology;
• Reducing trial-and-error.
• Manufacturers are developing clean diesels for passenger cars.

Future Outlook

• Research suggests hybrid vehicles may become diesel-electric.
• Research and development of diesel half-ton pickup trucks may expand accessories aftermarket further.