It’s a new year and many feel it couldn’t have come quick enough. And we can’t help but wonder, after the roller coaster ride of ’08, what will happen in 2009?
To find out, we surveyed some industry suppliers with their finger on the pulse of the market about just what they think the new year will bring.
We started by asking Todd Ryden, director of marketing for MSD Ignition, ‘What areas of the street performance market will be hot in 2009?’ His reply: “2009 will be a tough year for our industry, but street rods and muscle cars will continue to be popular.The number of boomers continues to grow, and they arebuying the cars they’ve always wanted. Better yet, people are using these cars and are out at cruises and tours enjoying themselves despite fuel costs.”
Next comes Larry Norris, global VP of sales and marketing for Magnaflow who says, “Although the economy is in somewhat of a hole at the moment, we feel that things will start to pick back up again with the revival of the muscle car segment. With the recent re-release of the Dodge Challenger and the upcoming release of the Chevrolet Camaro and Ford Mustang, true performance-minded enthusiasts will continue to modify their cars regardless of what’s going on with the economy.”
He adds, “Another segment that we feel will get back on its feet is the sport compact market. Although times are tough, we feel that people will adapt and change their focus to driving more fuel-efficient cars. Compared to other performance modifications that may hinder (the) mpgs a car might produce, adding a cat-back exhaust and an intake will actually help increase a car’s performance in that area. Seeing the value in that, consumers will be less hesitant to go out and spend their hard-earned dollars on something that will actually benefit them in the long run.”
An Addictive Hobby
Holley’s Bill Tichenor goes for the basics when he predicts high spots will be, “anything that makes their carbetter ormore fun to drive.In tough economic times, the performance market hastraditionally fared better than others because this hobby is so addicting. It is a joy in good times and an escape in rough times.”
Looking to the future, Tichenor says, “In general, I expect the LS engine market to continue to gain popularity in all segments.”
Moroso’s Rob DiLella is also optimistic. “Moroso Performance Products is looking to 2009 for the good old days of everyone wanting to dress up their current muscle car or street rod with some performance and dress-up items.”
The next question we asked was, “What areas might not be as strong as years past?” Holley’s Tichenor brought up a segment of the market that was hit the hardest in ’08.
“Trucks and SUVs, although they could be a dark horse for 2009. The cost of gas has impacted the sales of these vehicles and plummeted the price of used ones. Right now you can pick up one of these vehicles for nearly 40 percent less than you could two years ago, which leaves plenty of extra money in your pocket for performance and accessory upgrades, plus gas. Right now we are seeing a slump in the price of oil and gas is coming down. If prices stay down, it could spark some buying of these vehicles and people spending money on them. Regardless of gas, a large part of America still needs trucks and SUVs to haul and tow stuff, whether it’s for work or pleasure, and in many families these vehicle serve both roles.”
Moroso’s DiLella says, “It’s tough to say because of the current economy, but the sport compact market looks to have faded some.”
Norris from Magnaflow notes, “With gas prices still at an all-time high, some diesel truck owners will look in a different direction when it comes to purchasing vehicles and the modifications they choose to do to them. Even though the prices are slowly decreasing, the way the economy is going right now, spending money in the truck and SUV markets won’t be as easy as it once was. The same goes for the sport compact market, where the younger enthusiasts will be more focused on the essential modifications to get the most out of the their money versus the previous generations that are bringing in more financially. Although the sport compact crowd might be cutting back on spending, that doesn’t necessarily mean that things will fizzle out, since many import manufacturers are starting to produce more mpg-efficient cars.”
MSD’s Ryden agrees, saying, “The truck area and SUVs will be a struggle as fuel prices continue to be a thorn in the performance side.”
Reasons for Optimism
We wanted to know what factors offer hope to performance shops for being successful in ’09.
Norris optimistically says, “With the election just completed, the economy should see some sort of resurgence, hopefully meaning that consumers will start to spend a little bit more money. Another factor that performance shops can look forward to is the release of several cars with new fuel options versus the conventional technology we’ve been working with in the past. New advances along with new models should give the performance shops some new business and hopefully, in turn, that means new avenues to explore.”
Ryden told us hope will come in the form of, “lower fuel prices, an improved economy andpositive media coverage.The new Challenger and Camaro are certainly helpingour industry and anyone that purchases one of these cars is going to start modifying and personalizing it right away. This new excitement from the OEMs should also help with the traditional side of performance components.”
Tichenor brings up an interesting element noting, “certainly, the introduction of modern muscle cars from the OEs (offer reasons for optimism). With the economy and gas prices, we are at a pivotal point here in America.We all know theAmerican OEs that gave us the world-famous Camaro, Mustang, Challenger, Corvette and many other muscle cars of the 1960s and ’70s are hurting.We should be very excitedthat these companies remain committed to building us modern-day iconic muscle cars.”
DiLella says, “With the many companies like Moroso still turning out lots of new products for current vehicles and still making advancements on the old tried-and-true products we have always made, we’re not going anywhere, so people out there can still make their rides do what they need.”
We asked for three things a street performance shop can do right now to increase sales going into next year.
DiLella tells of his company’s policy. “We always suggest (that shops) get all employees as knowledgeable as possible with all the products that are sold in the store and with all the productsof the manufacturers they carry. This is always helpful to customers looking to buy something and not knowing what accessories go along with the part. Nothing is more frustrating than buying something, going home to install it, then needing to go back to the store for another part to complete the job.”
Tichenor recommends, “advertise, but in this economy and with gas prices, you may have to be more targeted. Maybe it’s an advertisement that focuses on tune-ups or upgrades that will increase fuel mileage, reliability and performance. The ad needs to get them out of the house and into the garage rather than waiting for doomsday to hit.”
He also suggests the Internet as an effective tool.
“Make sure you have a Web site for your business.A recent survey that said 75 percent of all new cars purchased were researched on the Internet before the customer came to the dealership.Think about how often you find yourself researching something on the Internet before you pick up the phone to call. The Internet will reach your potential customers 24/7.”
Finally, he adds, be sure to carry a range of attractive items.
“Product diversification can be a game-changer for many businesses.Typically if one market segment is slow, another is on the rise. It’s important for businessesto watch for changes in the market. Peoplethat own cars and work on them do it because they enjoy the hobby, they enjoy meeting people and making friends.As a shop owner, you need to be the hobbyist’s best friend and treat their project car as if it were your own. Let’s face it-this is a hobby to them and they rely on you to give good advice on product recommendations and help them get the most for their money.If you show you honestly care, then you will earn their business.In the end, they will become a repeat customer and will recommend you to all their friends. No amount of money can buy this type of advertising.”
Ryden agrees when he recommends, “customer service and support. Nothing brings people back to your shop like a positive purchase or service experience. And that also leads to good word-of-mouth advertising, which is the most effective promotion you can get.”
He also recommends a full warehouse.
“Stock the parts. If you have it on the shelf and the customer is interested, it’s a sale. If he has to order it and come back, you may miss the boat.”
And suggests investing in training and education.
“Make sure you and your staff know what you’re talking about. Customers come in knowing what they want now more than ever. Make sure you can recommend products for their specific needs and application.”
Norris offers, “In the past, many shops have based their focus on a certain genre of the market. But in 2009, we think many of them will shift gears and broaden their clientele. Catering solely to one part of the market limits you and your business, but those that see this and begin to adapt by supplying other segments will prosper.”
Next, he adds, “Aside from carrying products for multiple genres, being knowledgeable about what you’re selling is just as important. Knowing the ‘ins and outs’ of what you’re offering your customers will give you the upper-hand on those businesses that just have a rack of catalogs in their showroom with no knowledge of what they’re trying to sell.”
Finally, he notes, “having product that’s readily available is a key part to making sales, meaning (having) a solid WD to get you what you need, when you need it is crucial. Most customers don’t want to come into your shop to order parts, only to have to wait weeks for their product to come in. Find a good WD that supplies your area, get set up (if you aren’t already) and shift things into high gear.”
Bang for Your Buck
Our last question was a loaded one: “Why is this a good time to be in the street performance market?”
Norris notes, “many consumers are trying to find ways to get the most ‘bang for their buck’ when it comes to the cars they drive. And a lot of aftermarket companies are finding new ways to help them do that. With a lot of aftermarket products providing horsepower and torque gains, many of them are also helping increase gas mileage in the process and those are the products that are helping to keep the market going.”
Tichenor speaks of opportunity when he says, “The market is so diverse now. There are companies out there now, large and small, that make performance products for almost any make or model of vehicle. As a shop owner selling street performance, you can pick and choose which markets you wish to perform in and if the markets ever change, it’s easy to diversify.You don’t have to compete for business if there is one shop in town that is only interested in muscle cars. You can concentrate on late-model cars and trucks and sport compacts, or the diesel market, or street and hot rods.’
Ryden notes there are positive developments within the market. “Though the media and news may be all doom and gloom, the performance market is still a great place to be. People still want to enjoy their cars and their passion. They may not be buying everything they want for their car or truck, but they’re still looking. We also have an aftermarket that is full of cool and unique performance goodies. Manufacturers are making it easy to build horsepower with affordable aluminum heads, late-model blocks, and even crate engines. Overdrive transmissions are all over. You can make an old car drive like a new car and use it every day. People still dig old cars, performance and speed.”
DiLella maybe sums it up best: “It’s a hell of a lot better than wearing a suit and working on Wall Street!”