Wednesday, November 23, 2011

Tough economy gives boost to auto ‘aftermarket’


Handout / Reuters

A Camaro concept car was among the new models introduced at last week's trade show for the automotive "aftermarket."

By Paul A. Eisenstein

Car manufacturers might still be struggling to emerge from the depths of the industry’s worst downturn since the Great Depression, but the so-called “aftermarket” is firing on all cylinders — perhaps in part because of the weak economy.

Forced to hang on to their cars longer than normal, American motorists are spending more on maintenance, and that’s a big portion of the estimated $30 billion in annual revenues generated by some 6,700 car parts manufacturers, distributors and retailers who make up the Specialty Equipment Market Association.

Car owners can shake off their boredom by dressing up their old car with some new features, perhaps some new alloy wheels, a custom grille, sports seats or even an entirely new, high-performance crate motor, like the one introduced by Chevrolet at this year’s SEMA trade show.

The annual event is a showcase of just about everything automotive — everything from air fresheners to wild (and sometimes wacky) concept vehicles.


Nearly 2,000 different exhibitors crammed into the sprawling Las Vegas Convention Center last week to pitch their wares to more than 135,000 wide-eyed attendees from over 100 countries.

“It certainly demonstrates there’s a reason to be optimistic about the future of the auto industry,” said Peter McGillivray, the trade group’s vice president of marketing, as he stared out at one of the convention center’s crowded halls.

With one of the largest stands at the million-square-foot show, Chevrolet created a life-size “Hot Wheels” track to show off a custom Camaro painted in an eye-popping metallic green. Dubbed the “Chevy Hot Wheels Camaro Concept,” it’s currently a one-off for the annual automotive extravaganza, though executives of the carmaker hinted they could find a place for it in the growing Camaro line-up.

The Chevrolet display also featured a dozen different concepts based on its new Sonic subcompact — from the Sonic All Activity Vehicle, designed by racing great Ricky Carmichael, to the Sonic Boom, a prototype featuring two large subwoofers and 10 six-inch midrange speakers mounted in the rear hatch in a pair of turbine engine-like clusters.

The annual SEMA show was originally designed as a showcase for automotive suppliers and vendors, and sure enough there were plenty of exhibitors who’ve come up with a great idea, cobbled together a prototype in their garage and showed up hoping to sell some of their new widgets.

But automakers like Chevrolet have also ramped up their presence in recent years.

Chris Perry, Chevy’s vice president of marketing, suggests the show provides “a great canvas” to pitch its products to those who influence market trends. Indeed, SEMA’s McGillivray contends that the show and other organization events “can influence as (many) as one million vehicle purchases a year.”

That’s why the roll call for automakers has steadily expanded over the years, with 11 manufacturers attending this year’s event, including Chevrolet, Ford and Toyota.

The Japanese automaker’s luxury brand, Lexus, used the 2011 SEMA Show to reveal its all-new GS F Sport. In years past, that introduction would likely have been staged at a more traditional event, like the upcoming Los Angeles auto show.

Hyundai, meanwhile, unveiled a half-dozen concept vehicles, including the ARK Performance Veloster, a prototype of the turbocharged hatchback that it will bring to market next year.

“SEMA is a place where two worlds collide,” said John Krafcik, chief executive of Hyundai Motor America. “And when they do some amazing things happen.”

Officials at Kia, the Korean carmaker’s sibling brand, agree, suggesting that appearing at SEMA has helped transform the maker’s image, putting an emphasis on styling and performance, rather than just rock-bottom pricing.

The SEMA Show has evolved in other ways.

While performance parts — like fast-shifting gearboxes and supercharged motors — were the show’s original focus, there has also been what McGillivray calls a “mind-boggling” growth in the number of vendors showing off their mobile electronics gear.

That’s no surprise. With roads more crowded than ever, fuel prices hovering just below record levels and tough new mileage standards going into effect, motorists are looking for other ways to improve the performance of their cars.

Like completely updating a car’s interior.

“We’ll manufacture the interior in a day” and install it a day later, suggested Brooks Mayberry, the CEO of Katzkin — a SEMA member that produces customized replacement leather seats and finishes for more than 2,000 different vehicles.

The firm recently signed a deal with national dealer chain CarMax to offer both used and new car buyers the chance to upgrade their vehicles. And the company was at SEMA hoping to drum up even more business.

Insight on the automaker's plan to bring back the Chevy Colorado pick-up truck, adding jobs, with Daniel Akerson, General Motors chairman/CEO and CNBC's Phil LeBeau. Ackerson adds GM is cautiously optimistic about 2012 projects.

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