Staying Above the Downturn

Dec 3, 2009

Everywhere you turn, the outlook seems gloomy: Soaring gas prices, new and used trucks and SUVs piling up on dealers’ lots – even the perennial sales leader, Ford’s F-series truck, has been displaced by the Honda Civic. Kelly Blue Book, the barometer of auto valuation and used vehicle sales has said the psyche of Americans has been profoundly altered by these changes, to the point where many believe these problems are here to stay.

So despite all the negativity and predictors of a long-term downturn, what are some of the top truck builders in the country doing to survive and even thrive in a truck-challenged economy?

A mixed blessing, mixed bag

At Trader’s Trucks in Santa Fe Springs, Calif., Simon Purves reports, “Business is good, very good. We still do mainly sport trucks and SUVs. We’re moving more ‘appearance’ products than suspension kits. Our clientele is after greater performance and economy out of their vehicles, and that’s what we provide. Out here, we’re both lowering and lifting trucks and SUVs. Of course, the number of trucks being lifted is down since fuel economy suffers somewhat when you go to larger wheels and tires, but we’re still doing quite a bit of them.”

Ed Federkeil, owner of California Custom Sport Trucks, in Fort Lauderdale, Fla., says, “You trim, trim, and trim some more.”

“What this did was force me to do more of the work myself, after losing part of my staff from normal attrition and not replacing them. I went from six employees down to two and a half, but the upside is that it made me see things that I had overlooked, that weren’t up to my standards or how I like them done. The current economic situation was a mixed blessing, since it made me more focused on the business than before.”

According to John Holmquist of Independence, Ohio’s, Stylin’ Trucks, “There is a lot of pressure now, there’s no denying that. But you have to really understand what’s working for you, and be true to your brand.” Referring to brand as the whole product of your name, image and persona to consumers and the trade, Holmquist says, “We see too many shops trying to be something they’re not, instead of playing to their own strengths and forgetting about the rest.”

“A lot of shops have forgotten who and what they are; we know that our strength is in sport trucks, and for us the category is doing fine. Some people look at us as part of JC Whitney, but Stylin’ is sport trucks, while Whitney is known for value. Just as we see ourselves separate from our parent corporation, stick to your brand, advertise where it counts, and resist the temptation to cram your ads full of stuff while still managing their productivity”.

Roll with the punches

Industry veteran Steve Elstins, owner of West Coast Mufflers & Sport Trucks in Concord, Calif., has seen a lot of changes occur: “We were doing primarily exhaust and tires when we started. Later, we began working on front ends, suspension and brakes. In 1989, we stopped selling tires because we couldn’t compete with the prices being offered by the chain stores. In the late ’90s, we got into trucks when they became real popular.”

“After the tragedy of 9/11, we went from doing a million dollars annually to around $550,000 a year. We had to regroup once again. It didn’t happen overnight, but we could see it. It was a gradual decrease that hit its lowest point two years ago. It hurt everyone, and there’s still work; only now you have to go out and get it -”there aren’t a bunch of new diesels lined up waiting for 8″ lifts.”

Jared Pugh, owner of Rock & Roll Offroad, Wichita Falls, Texas, counters by saying, “Our business is decent; out here our customers still need to have their toys. Offroad products, diesel performance, lift kits, accessories, they’re our top sellers. We see more Dodge and Ford trucks, and we’re continuing to build what we call ‘super trucks’ -” complete vehicle builds, for our clientele. Every year since we opened in 2003, we’ve seen an increase in sales, and we expect we will be up this year, too. Our edge is in styling, the way we build.”

California Custom’s Federkeil notes, “We went from lifting two or three trucks a day to one a week. Now, guys are looking at the adverse effect of lifting a truck and losing mileage in the process, so it’s definitely a tougher sell. We are concentrating on the things that improve performance and gas mileage; that’s what our customers want. As gas prices climb and the real estate market here in Florida continues to nosedive, it really takes a bite out of the discretionary dollars that enthusiasts, our core customers, have to spend.”

Trader’s Purves knows there are customers for his products and services: “We’re doing a lot of complete trucks and SUVs. Our outlook may be quite different than others in our market, or in other parts of the country. I would have to say we’re bullish on the truck/SUV market, and we believe there’s a customer for what we do. We just have to continue to seek them out wherever they are, and do a better job telling them our story and why they should have us do the buildup.”

Know your clientele

Most restylers’ customers, like any consumer today looking more closely at how they want to spend their tighter dollars, still want to put some discretionary money into the things that bring them pleasure. After all, many are enthusiasts. Restylers just need to understand where those customers’ thoughts are as they consider what they want to spend and where.

“Who are your core customers, what are they looking for, can we install it for them, and is the price in line with every other product they might buy for that vehicle?” asks Holmquist.

Rock & Roll’s Pugh agrees, saying that the difference between his shop and the one down the street “is mainly attitude. We live the lifestyle, and it’s reflected in the look and feel of the trucks and SUVs we build. We pay special attention to following a certain ‘theme’ in the buildup of the vehicles we do, such as a black-on-black scheme which we refer to as ‘murdered’-” you’re not likely to get this anywhere else you go in this area.”

Despite a downturn in the new truck business, West Coast Mufflers’ Elstins is confident business will improve. “I’m noticing an overall increase, mainly on older vehicles that are already paid for and whose owners have discretionary income to use in rebuilding and modifying them,” he says. “We used to get a lot more suspension work, but it’s trailed off over the years. We still do a fair amount of work overhauling front ends, primarily on pickups and SUVs. We also do a lot of lowering. But suspension makes up a smaller percentage of our workload than before. We do everything when it comes to exhaust -” from muscle cars to hot rods to trucks.”

Gloom and doom? Maybe for some. But the savvy restylers who look at their mix of offerings and understand their customers and what they want and how much they want to spend on it will keep moving forward, even if it’s a bit slower for a short while.

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Survival Tips

Each of these market leaders offer their take on what their fellow restylers might do in these tough times:

“I don’t look for things to change anytime soon, so you just have to be smart about how you conduct business, and be creative in ways to be more productive,” says California Custom’s Federkeil. “There are a lot of good products out there, and it doesn’t pay in the long run to sell customers things that don’t provide value or flat out don’t work.”

“The key is to stay true to the market; if you diversify, you run the risk of alienating your core customers and confusing potential buyers. Whether online or in your store, keep things fresh-particularly on the Internet. Review and change your pricing often, just as you would with images or any other information you have on it,” advises Stylin’ Trucks’ Holmquist.

“Our success over more than two decades can be attributed to our ability to change our business model and adapt to an evolving market,” West Coast Mufflers’ Elstins says. “Changes within the industry have forced us to regroup and adjust our focus on several different occasions. I believe it’s made us stronger every time it’s happened. I didn’t want to change, but if you want to stay in business, you will. There are opportunities for those willing to adapt. We get beat up, but once we get through it we learn. For example, some of my customers buy parts on the Internet, so I let them bring them in and if they’ve bought the wrong ones, they’ll have to pay to have them removed, buy the correct parts from us and have us reinstall them. That’s when they realize what they’re really buying is our experience, something you can’t get online.”

Trader’s Trucks’ Purves reminds shop owners to “stay focused on customer service. When things are tough, you’ll be fine if you’ve taken care of your customers all along. Remember, referrals and word of mouth are the most effective forms of marketing you could ask for. Advertising is OK, but customer service is more immediate and gratifying when done correctly.”