Paradigm Shift

Dec 3, 2009

Reality stinks. But, then, what’s really real?

Overall car sales are dramatically down; dealerships have been paring sales, service and secretarial staffs; fleet business to rental car, government and commercial buyers has slumped; automakers have been running on a fume and a prayer desperately looking for the right formula to nudge consumers onto their lots and into their showrooms; and Washington has been devising tax breaks and other dollar-saving incentives to catch the auto nation public’s eye. Plus, in the wake of the $50 billion Madoff ponzi scheme, more questionable investment machinations that for years had garnered great returns, often for the well-heeled, have collapsed, revealing their inner-workings’ failings.

That’s on the one hand. On the other are carmakers Subaru and Hyundai that bucked the downward trend in North America with January sales in the plus column of 8% and 14% respectively. Then early last month the up-and-down stock market momentarily went upbeat because December sales of existing houses spiked in the South and Midwest as those with deep enough pockets grabbed homes that had deep enough discounts somewhere, banks are offering credit, and some cash is beginning to pulse through the economy. Adding to the market’s upward tick were drug companies reporting better-than-expected earnings. Plus, some of that government stimulus should prod parts of the economy forward, and there’s no doubt the auto industry has been front and center as one of the most stimulated.

It’s a mixed bag all right, and I’m just hoping that whoever is holding it can make good use of it.

Like you all, I’m tired of the barrage of bad economic news and the divergent opinions of economic pundits, some saying we’ve bottomed out and are movin’ on up, others warning that we’ve yet to hit the nadir, so keep those seatbelts fastened.

It’s driving me nuts, and I bet it’s the same with you. For some, too many perhaps, such constant bi-polarizing news simply paralyzes.

Yet what’s the effect on our aftermarket businesses? How paralyzed are we? Suppliers I’ve talked with tell me they’re doing “OK,” that sales continue, even though at a slower pace than a year ago but not enough to leave these businesspeople quaking in their boots. They are optimistic, especially for the second half of the year. And restylers have told me they’re clearly benefiting from car owners who currently opt to renovate their older vehicles rather than buy new ones. Even the straightforward, no-nonsense reports I receive on the activity of Restyling‘s readers’ actual responses to companies’ ads and product mentions in this magazine clearly demonstrate that restylers are looking at a diversity of aftermarket goods to provide automobile enthusiasts.

Maybe, despite, or even because of, the financial hit the truck and SUV markets took last summer when fuel prices surged to as much as $5 a gallon, the restyling industry began to assess itself and adjust business to reflect what was then a rapidly changing economic world confined, it seemed, to the auto industry. As such, even while this reeling economy abruptly consumed us all, our industry already seemed to be preparing for a better way of doing business: for example, not committing time and money into creating aftermarket products for vehicles that would sit on dealer lots, or be wooed by the big automakers to develop kits and parts for vehicles whose production was questionable.

It may have been just the luck of the draw or providential timing but we certainly seem better prepared to recover sooner than other parts of the economy.

Reality stinks? Sometimes. But it just might be that our industry already is shifting reality.