KPI — December: Special Report: State of Business

Dec 18, 2020

Industry leaders reflect upon a challenging year, market conditions, new product development and a bright future.

Kyle Shiminski, vice president and general manager at Warn Industries and Factor 55

One can never truly plan for something as significant as COVID-19. However, having planned for many other possible business-disruption scenarios in our strategic planning, we were conditioned to logically and calmly think through the situations as they were unfolding.

Safety is and always will be our top priority. We took all necessary actions rather quickly and made a number of difficult decisions collectively as a team. No one predicted the market and consumer demand to return so rapidly, a positive sign for the industry at large.

Thanks to our hard working and dedicated team, we continue to ramp up our capacity to reach the output levels being asked of us in this new normal. The needs of our customers continue to grow, and we have been fortunate enough to support them with our reliable, high quality and durable WARN and Factor 55 products—whether it’s the trailblazer, adventurer, overlander or work professional who utilizes our equipment.

We have a lot to be excited about regarding the launch of new and redesigned vehicle platforms in the powersports, truck and 4×4 markets. All eyes are on the Bronco—and our products integrate nicely. For example, we launched our new HUB wireless receiver, a smart-device enabled winch controller for Warn winches (and even other brands). This product recently received the SEMA360 Best New Product award in the Off-Road/4WD category and is already selling in the market. Warn also launched its new XP truck bumper, which is sure to excite customers who want a premium replacement bumper without a winch-mount option. In addition, Factor 55 continues to introduce new products, all of which are geared toward safe, closed-system winching and rigging.

We are surely not the only ones ready to bid farewell to 2020 and welcome 2021. As we head into the new year, we have a lot to be thankful for and embrace every opportunity to improve as a business and as a team. Flexibility and adaptability are our keys to success, both now and into the future. As such, our businesses are positioned well to handle any new challenges.

Dan Guyer, wheel and tire category manager at Keystone Automotive Operations, Inc.

Small businesses need our support now more than ever. As a WD, we have a core responsibility to do everything possible to service the customer and find creative ways to not only keep them in business, but also really help them thrive in business.

We absolutely excel in inventory, delivery and customer service. Customers who have been direct with suppliers for years can’t get product, or the delivery dates are 6+ weeks out. You can’t do business without product. Our purchasing power as the leading and largest WD of automotive aftermarket and specialty equipment—our ability to have product on the shelves ready to ship—gives our customers a huge advantage during these difficult times. Plus, having our own fleet of highly reliable delivery trucks means our customers get their orders on time, so they don’t have to fret about making the sale. How’s UPS, FedEx and DHL working out? Delayed, delayed, delayed. Third, and most importantly, we have an obligation—a core value—to serve. When I see product lines being purchased by new customers that I haven’t even heard of, then I know we’re doing something right.

Justin Burcham, owner of JPC Racing

2020 has been a very challenging year for us. We performed a huge relocation starting in November 2019 going into January 2020. We increased our shop size, as well as reduced our overhead. Looking back, this ended up being a critical financial move not knowing what 2020 would bring.

Overall, our parts sales are down this year, which I primarily attribute to COVID and the election; the former of which prevented race tracks from opening and people from gathering at car shows and events. With people still out of work—and unknown political impacts—I feel a lot of people were/are reluctant to spend money.

Fortunately, our shop has stayed extremely busy with parts installations and overall builds. We’ve been blessed with a large customer base who really appreciates and values our work. We’ve had to schedule jobs 30 to 45 days out the majority of the year.

Aftermarket parts have been extremely difficult to get. I know a lot of aftermarket parts companies source their products/materials from overseas, and it has truly shown with the unavailability of parts in 2020. It’s been very difficult to complete jobs in a timely manner due to this issue. We sell a lot of packages on our web store, such as transmission swaps and fuel systems. These packages might contain 10 different items, and all it takes is one item to be on backorder to create a huge headache with filling orders and/or completing projects.

One of the valuable lessons I’ve learned over the years, and it definitely applies to 2020, is to avoid frivolous spending. You never know when a situation like the pandemic can impact you, and you must be financially prepared for tough times.

In 2021, we’re hoping parts availability improves significantly, more racetracks can open and everyone can get back to somewhat of a normal lifestyle, which should help the economy and, in turn, trickle down to the aftermarket performance industry.

Bryan Grigsby, off-road sales manager at Holley Motorsports Division

The words preparation, flexibility and perseverance come to mind when describing 2020. Ultimately, you have to be prepared in order to perform at the highest level, at any given moment. I believe we as a company were prepared to gear up and handle any situation put in front of us, and we continue to do so at this point.

Any hesitation from us was very brief, like a blip of the rev limiter between shifts. We ran through the gears in Q3 and Q4, and have been pulling like a big block on nitrous. Versatile product lines coupled with a steady stream of innovative product development have been [the] keystone to our success. As such, we’ve experienced growth across all product categories and will finish the year in a good position, with our sights firmly set on 2021.

Next year is all about what the OEs are bringing to the table. Ford releasing the Bronco. Jeep firing back with a Hemi-equipped Wrangler. Rumored changes to the Raptor platform to battle the Ram TRX. It’s exciting! Welcome to the performance truck horsepower wars, something typically reserved for vehicles like the Mustang, Challenger and Corvette.

It’s a great time for the performance aftermarket industry in general. The spirit of the vehicle modifier is alive and well and with the introduction of these vehicles, the possibilities are endless for modification. We have a constant stream of new product development that spans nearly every automotive or motorsport category. That allows us to connect our consumers with innovative and problem-solving performance solutions.

Billy Longfellow, vice president of design at AirDesign USA

We’ve spent this time repositioning ourselves for success. Instead of waiting for customer interaction at trade shows, we’re visiting the brick-and-mortar stores, setting up authorized dealers and teaming up with OEM partners for future vehicle programs.

Lawson Mollica, director of marketing and public relations at AEM Performance Electronics

I’m not sure this is a lesson learned from COVID-19, rather a lesson learned from the crash in 2008 and the prior recession in 2001, but we need to be nimble and react quickly to dramatic changes. Thankfully, we have an experienced leadership team so as soon as it became clear that there could be dramatic consequences because of the governmental restrictions that were coming, we adjusted our plans to ensure that AEM remained solvent.

We are expecting to finish out the year at our original expectations, which is above our revised projections. We are very excited about the performance/conversion EV segment and being the first aftermarket company to deliver a comprehensive Vehicle Control Unit for EVs that increases capability on the track, drivability on the street and safety in both areas. We practice continuous improvement, and we’re excited to announce some innovations to existing products, in addition to the release of a couple of new products next year.

Greg Randolph, vice president of marketing at DECKED

We’ve really turned lemons into lemonade during the pandemic—taking adverse conditions and adjusting to some new norms that, we believe, have positioned DECKED and our dealers for success no matter the political or public health climate. We’ve doubled down on our marketing sophistication, intelligence and spend, as well as invested heavily in our dealers with digital programs and in-store POPs. Our entire ecosystem of products and solutions are all growing. As such, we’re ending 2020 above plan and above anticipated growth rates.

Heading into 2021, we’re excited about our new toolbox. We’re confident it will solve a lot of problems that are experienced with current offerings available on the market. There is also a lot of growth opportunity in the overlanding and camping markets, with consumers snatching up our product as they shift from bigger vacation plans to road trips and outings in the great outdoors. We also see exponential growth in the fleet and commercial work truck market. Our efforts in this segment are starting to provide big wins with fleets realizing the value proposition of safety, efficiency and fleet right-sizing with DECKED.

Kevin Campbell, director of global marketing at Kicker

I realize it’s an understatement to claim 2020 has been a year like no other. We’re incredibly fortunate, and the lessons we’ve learned are significant. What’s the old saying? Luck has everything to do with good planning?

Before the pandemic struck, our management team was already focused on taking appropriate steps to assure we had a plan to support our most popular, most in-demand products with adequate inventories. This was, of course, based on recent history and educated forecasts. Although none of us were anticipating the pandemic, such planning helped Kicker respond to surprising demand for everything 12Volt that we build. It was key in enabling us to meet demand even as it outran all projections. Now, we’re working hard to beef up inventories to satisfy orders that exceeded our capabilities. Literally all of our categories—car audio, marine and powersports—outperformed expectations, and we will finish the year with sales well above projections.

We’re planning for, what we believe will be, an equally challenging 2021, and we’re approaching it with conservative expectations. The team at Kicker is particularly excited about the new products we’ve recently introduced in high-performance car audio, plus marine and powersports, which will hit the market in the first two quarters of 2021.

Andrew Briggs, vice president of marketing & product planning at Yokohama Tire

“Unprecedented” is a great way to describe the year, as the entire supply chain, from manufacturing through retail sales, suffered a disruption. What has been encouraging, though, is the resiliency of the tire industry. We’ve made significant strides to minimize any impact.  Adaptability was probably the biggest takeaway for Yokohama Tire. We’ve certainly developed new ways of doing business but, most importantly, we haven’t given up on the future. We remain deeply committed to the North American market and have been steadfast in our approach to new product launches, ongoing product development and sales programs to drive the business forward. We’re expecting to outpace the market again this year due, in large part, to the decisions we made at the height of the pandemic.

As a whole, the light truck category seemed to be less impacted than passenger car categories.  However, premium categories within both passenger car and light truck fared exceptionally well, which matches the trends we see across most automotive categories. Given the vitality of our product line, including several of our recent additions like the ADVAN Apex, ADVAN Sport A/S+, GEOLANDAR CV G058 and GEOLANDAR X-AT, we’re poised to capitalize on those trends and expect continued success in 2021 and beyond.

RJ de Vera, global customer engagement leader at 3M CHIM Division – Auto Care

2020 has been a tough year for everyone, but it has given many of us the opportunity to re-evaluate how to develop, launch and market our new and existing product lines. The car care category has performed extremely well this year, with above-average growth rates. Our brand has done well meeting the needs of car care customers who are doing more DIY work at home, and we expect to finish above expectations for the year.

With 2020 coming to an end and 2021 right around the corner, we’re excited to launch our new car care items—like the expansion of our Hybrid Ceramic line with a Hybrid Ceramic Wash & Wax, a new DIY Hybrid Paint Coating Kit, a few updates to our Ultimate Line, such as new and improved formulations for Ultimate Liquid and Paste Wax, as well as the expansion of our Ready-to-Use Professional Series with a DRTU Last Touch Detailing Spray.

We continue to focus on product innovation and building strong brand relationships with our customers. We look forward to continually fueling the passion people have for their rides and serve as the car care brand of choice for many enthusiasts.

Kathryn Reinhardt, senior marketing manager at 4WP

I think 2020 was a year of unpredictability—like the saying, “Expect the Unexpected.” We all had to make changes in order for our businesses to survive, or even thrive. For 4 Wheel Parts, we did a little bit of both. There were times when, like others, we made cuts—pulled back and re-forecasted our goals. Likewise, there were times when we couldn’t keep product on the shelf—begging vendors for inventory and/or all our bays were full. It’s been a wild rollercoaster of peaks and valleys, but I think what our company learned the most is how to come together as a team and weather the ever-changing conditions imposed on us, many of which were out of our control.

Jason Buckles, sales account manager at BOLT

Probably the most important lesson we learned in 2020 was making sure we could adapt quickly as things continued to change. As shows stopped happening and budgets shrunk, we had to come up with new ways to keep our customers engaged with the brand. This was even more important than normal as people shifted to more types of outdoor activities. They started towing more, and there was a strong demand for our locks.

We hope the trend of outdoor activities and adventuring continues into 2021 and beyond, especially with the popularity of the overland category, and the emphasis Ford Bronco is putting on being an adventure vehicle.

Melanie Hellwig-White, president at Hellwig Products

This year has been full of lessons, namely how to pivot and remain flexible. I’m so grateful for our team. Such a year has highlighted what a strong group we have, and how well we work together. We will finish the year above goal, something I didn’t believe was possible back in March and April.

We are having some supply chain issues but feel lucky for the demand. Fortunately, consumers are excited about getting outside, embracing the overland market via truck, 4×4 and trailer or RV—all of which are markets we serve. We love outfitting consumers with a better driving experience and feel so lucky to be doing it this year, in these unprecedented conditions. We expect to continue supporting such journeys in the year to come.

Pablo Peralta, director of marketing at ICI

ICI recently underwent a management change; therefore, the company could not entirely rely on a baseline from historical sales. That being said, we expect to finish at goal for the majority of our product categories.

In our opinion, 2020 made a notable impact on product launches and relationship management. We were looking to introduce the new ICI team and products at events that were, unfortunately, canceled. As a result, we believe that market penetration may have been hindered by an inability to exhibit our products to key players across the industry.

Looking to the future, ICI’s focus will once again be aimed toward product development. We have taken a step in that direction this year with the introduction of our Alumilite bumpers, which address a lot of the pain points in the current heavy-duty steel bumper market. In the upcoming year, we intend to capitalize on the robotics facilities made available to us by our parent company, Trophy Engineering—allowing us to deliver superior products to our industry. ICI was founded and built on the innovation of new products and, as a company, we’re ecstatic about going back to what we do best.

Scott Moyer, director of marketing at DeeZee

This year presented an opportunity to reflect on our business and further reinforce that our employees remain our greatest asset. As crazy as it sounds, the pandemic has given us all something in common, yet we realize it still affects everyone differently. All it takes is that common thread as a reminder that we all contribute to making Dee Zee great!

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