The Off-Road Market and the Economy

Dec 2, 2009

It doesn’t take much to realize the off-road market is particularly affected by the more precarious elements of our current economy. Gas prices go up and 4x4s get parked. Money gets tight and the bigger off-road trucks and SUVs are among the first to drop in sales.

In our world, retailers serving those markets were on the first wave and got hit immediately. But, as performance shops, we know to keep one eye open for opportunity and good news.

We kept those aspects in mind when we asked several major players in the off-road products industry for their input regarding today’s market. We also asked about any green thinking they may be seeing within the industry related to off-roading, and ways performance retailers can connect with customers and their fun in the dirt.

Still Out There

Our first question was, “How do you see the industry being affected by this economy?”

Tim Stewart of K&N Engineering says, “Sales of big-ticket items are soft; however, many lower-priced items are selling well. Enthusiasts are making adjustments but, by definition, they will find a way to race, go wheelin’ or whatever their particular passion is. There is less money on the table for consumers, so businesses are competing to bring value and sway those dollars to their door. This is the time to offer solid advice and invest time with every customer to fill his particular need.”

John Currie of Currie Enterprises says, “I think overall, the market is down somewhere around 20 percent. People I’ve talked to say 15 to 20 percent. Right now, they just want to keep their vehicles on the road instead of enhancing them. Our off-road focus is for Jeeps, and they are very popular. Years ago it was the TJ; now it’s the JK. But we’re probably down 17 percent overall.”

Rough Country Suspension Systems’ Chad Enochs says, “Our current economy and the associated media coverage has slowed down spending and affected the way everyone looks at their disposable income. We are not immune to these factors.But these same economic conditions have resulted in people holding onto their current vehicles longer and accessorizing. We believe this scenario has allowed our market to stay relatively healthy.”

Mike DeFord of Bully Dog Technologies adds, “I think that it really depends on the company you speak to-some are doing great and others are suffering. Overall, the (market) is down a bit, but that is overall. There are a lot of businesses that have really stepped up in the last 18 months and have taken a large part of the market share. We have embraced the off-road market and its enthusiasts. We are heavily involved in off-road racing, rock racing, supporting trail programs, four-wheeling clubs and all that. The hardcore enthusiast is still spending money on his truck or SUV.”

Daraugh “Bones” Flynn of OMF Performance Products notes, “The off-road industry definitely took a hit when the housing market and economy took a dive. The industry had been fueled for many years by customers pulling money out of their home and using it to purchase new vehicles and accessories.Even though we saw a significant decrease in sales when the housing market slumped, we feel as if the customers are still interested in customizing their vehicles and are spending as much money in doing so as any of us could expect or hope for.”

Respecting the Trail

On the issue of being green, we asked if our experts have seen any new types of environmental thinking that could affect the hobby.

Rough Country’s Enochs notes, “Off-road enthusiasts in general are great people that love their hobby and understand the importance of showing respect to the areas we have available to ride. I think we all understand that our ability to continue to enjoy off-road excursions is dependent on us taking care of these areas and leaving them in as good, if not better, shape than when we started.”

DeFord of Bully Dog says,I think everyone is trying to be as green as possible. Everyone cares about the world and wants it to be around for future generations. It is pretty evident when you go out to a desert race in the middle of Nevada and there are 200-plus pits set up and 1,000-plus people working those pits, but when the race is over, the only trace anyone was there is the tire tracks left in the dirt. Everyone picks up their trash, takes precautions to make sure they make the smallest footprint possible.”

Product development is another area where suppliers can enhance the off-road experience, he adds.

“There are a number of companies doing everything that they can to make a smaller footprint as well. Ten years ago, it was unheard of that an automotive aftermarket company would be working with government agencies, but today it is becoming more popular. The largest threat to the off-road market is the loss of available land. Each year we lose more and more. Luckily, we have the Off-Road Business Association (ORBA) that fights on our behalf.”

Bones of OMF adds, “The biggest impact we have seen to our business with stricter regulations has been in the sand buggy industry. The California Air Resources Board (CARB) has enforced regulations that have negatively affected the sand buggy builders, which in turn negatively affects our business.I wouldn’t consider that ‘green’ thinking, but being green and protecting the environment goes hand in hand.”

Stewart from K&N says, “Certainly, ‘green’ is heard throughout the media daily. As off-roaders, we need to continue responsible use of public lands and do everything we can to promote responsible access. The drive for products to lessen the impact on the environment will continue and potentially create new opportunities. In the meantime, we all need to continually evaluate how we manufacture and/or sell goods and do what we can to be efficient and create less waste, which in turn will lower costs.”

Currie points out the manufacturing aspect of thinking green when he says, “I’m not seeing any of that. Out hobby is not very green. We’re forced to think green. Anybody who is in manufacturing is forced to think green. Painting, packaging, etc., they have to comply. They don’t have a choice. People are forced to think green, and it’s usually with their checkbook. If we’re building off-road vehicles, we need a place to use them. As they keep closing our areas down, we use the same ones more and they get crowded and deteriorate.”

Have Some Fun

Finally, we asked how local speed shops can help customers have fun with their off-road vehicles.

Currie suggests joining them.

“If you are a speed shop or off-road shop working with retail customers, you can have customer appreciation runs. Show them trails and tell them what they can do and what not to do. If you have someone there that knows what is open and where the customers can go, if they are just getting into it, they don’t know where to go. They need to have that info.”

DeFord says, “Be aggressive. Go out of your way to support your local off-road enthusiasts. Each and every one of them wants a better-performing, faster vehicle. Service their needs.”

That means knowing what works and why.

“It’s not as simple as throwing product on your shelves or being able to order it for them,” he says. “The market wants to know that you truly support what they do; what they are in to. An easy way of showing support is to find your local 4×4 club and work with them to support their members, their local runs, etc. You can also have one Saturday a month that is an ‘off-road day.’ Feature some sale items and provide a place where locals can show off their rigs. If you are not servicing the off-road market now, it is no different than your current customer base-hey just drive different vehicles. Do what works for you and just put a different spin on it.”

Stewart notes, “Off-roaders are a savvy bunch, very independent and self-sufficient. Local shops can help by providing quality goods and services at reasonable prices and by offering good advice to people not familiar with the local trails, conditions, etc. Offering to hold events for clubs helps build a relationship and you can spice it up with a presentation by factory reps and some specials and door prizes.”

Enochs adds, “We attend events held by installers and think this is a great opportunity to get more people involved in the off-road community and spur interest in this market. We see most people focusing on value when purchasing off-road accessories-the most bang for the buck.”

Bones of OMF says, “The off-road crowd is alive and kicking, creating events for people to come together and enjoy our sport. We have seen local businesses host swap meets to help customers save a few bucks, and the customer can spend time with other enthusiasts. Some off-road shops have even started their own off-road club with organized events.Either option is great for the shop and the customer.”

So, it turns out that the off-road market isn’t up to its axles in doom-and-gloom. Show your customers that they can be responsible and still have fun, and it’s a market that can work for you.