about this report · 2020-02-27 · about this report 2 getting the specialty-equipment market’s...

ABOUT THIS REPORT

2

G E T T I N G T H E S P E C I A LT Y- E Q U I P M E N T M A R K E T ’ S P E R S P E CT I V E

Consumers spend more than $40 billion each year on products that make their cars and trucks look better, go faster, and do more. The companies that make and sell those products represent a diverse range of businesses that produce a wide variety of products and solutions for vehicle owners. The purpose of this report, which SEMA publishes twice a year, is to help these businesses—our industry—do the following:

Understand the health of the industry on a range of business metrics

Get the industry perspective on key issues and trends

Gain additional insight into specific current topics

Make its voice heard! (This report is based directly on industry feedback.)

TABLE OF CONTENTS

3

Key Findings 4

Business Metrics 8

Category Sales 17

Manufacturer Insights 26

Retailer/Installer Insights 31

Legal and Regulatory Issues 37

Additional Information 45

Report Background 46

Contact Information 47

4

-Which best describes how your company’s sales have changed over the past 12 months?-Which best describes how you think the size of the overall specialty-equipment industry will change in the next 12 months? Base: Total Per Group

58%

61%

64%

55%

59%

53%50%

44%

63% 62%

61%

46%

Spring 2018 Fall 2018 Spring 2019 Fall 2019

Share of Firms Expecting Industry Sales Growth

Over the Next 12 Months

Manufacturer

Distributor

Retailer/Installer

While most businesses report stable or growing sales over the past year, some are less optimistic about the overall industry’s prospects for the coming year

This recent decline in optimism seems to be driven by a few factors:

Negative impacts of tariffs and trade policy

Concerns about a potential recession in 2020

Additional burdens/challenges from regulations or taxes

Some manufacturers may already be feeling changes, causing a bigger drop in their expectations for the industry

5

-What is the biggest issue facing the specialty-equipment industry in the next five years?Base: Total Per Group

Top Perceived Challenges Facing the Specialty Automotive Aftermarket

Manufacturers Distributors Retailer/Installers

Regulations and Policy

• EPA, CARB, Nexus, etc.

• Tariffs, trade policy

Economy and Market-Related

• Possible recession

• Overseas competition

Shrinking Consumer Base

• Decline in vehicle ownership

• Young people not interested




Economy and Market-Related

• Possible recession• Competition from

online retail• Too many

players/products

Operational Issues• Hard to find

good talent• Rising costs/

eroding margins




Operational Issues• Hard to find good

talent• Rising costs/

eroding margins

Shrinking Market• Consumers

spending less• Possible recession• Decline in vehicle

ownership

Government policies and regulations are seen as a challenge by members of all business groups

A possible downturn in the economy is also recognized as a short-term threat

New sources of competition, including overseas suppliers and online retailers, are forcing the industry to adapt

Distributors and retailers may also find themselves squeezed on margins and facing a scarcity of qualified employees

6

-Which best describes how you think the size of the overall specialty-equipment industry will change in the next 12 months?-How has the total number of people employed by your company changed in the past 12 months?-Which best describes how your company’s spending on marketing and advertising has changed compared to 12 months ago?Base: Total Per Group

56% 61%42%

<$500k $500k-$2M >$2M

Percentage of Firms Expecting Industry Sales Growth in 2020

18%25%

56%

30%22%

59%

<$500k $500k – $2M >$2M

Investment Behavior inPast 12 Months

Added Employees Increased Marketing Spend

Retailer/Installer

Larger retailers are less optimistic about the industry’s short-term prospects, but are more likely to be investing in growing their business

Smaller retailers are likely more focused on core business operations, though some smaller firms are experimenting with paid marketing channels

Larger retailers may be more dialed-in to their suppliers’ concerns, or be more worried about policy changes like Nexus tax laws

7

-Which best describes how you think the size of the overall specialty-equipment industry will change in the next 12 months?-How would you say your company’s sales from each of the channels you sell through have changed over the past twelve months?Base: Total Per Group

41% 43% 42%

<$1M $1M – $10M >$10M

Percentage of Firms Expecting Industry Sales Growth in 2020

89%80%

63%

23%37%

57%

21%

39%

56%

<$1M $1M – $10M >$10M

Retail Channels Sold Through

Online Direct to Consumer Vehicle Dealerships

In-Store Auto Parts Chains

Manufacturers of different sizes have a similar level of optimism about industry outlook for 2020, but they often do business differently

Smaller manufacturers are more focused on direct-to-consumer sales channels, likely lacking relationships with distribution networks

Bigger manufacturers tend to sell through a variety of channels, including dealerships and more traditional retail

Manufacturer

BUSINESSMETRICS

Nearly six in 10 companies report sales growth over the last year

9

Note: Values may not sum to 100% due to “don’t know” responses.-Which best describes how your company’s sales have changed over the past 12 months?-You said your sales have increased. How much have your sales changed compared to 12 months ago?Base: Total Per Group

More than one in four manufacturers report sales growing by at least 15%

Increased Stayed Same Decreased

Manufacturer DistributorRetailer/ Installer

Less Than 4% 11% 13% 11%

4% – 6% 18% 28% 16%

7% – 10% 22% 25% 25%

11% – 15% 11% 10% 17%

More Than 15% 28% 22% 27%

Among Those Who Reported Increased Sales in Past 12 Months

16% 15% 14%

25% 25% 28%

57% 59% 57%

Manufacturer Distributor Retailer/Installer

Change in Company Sales Over the Past 12 Months

Company Sales Increase Over the Past 12 Months

Businesses are more optimistic about their own prospects than they are about industry growth

10

Note: Values may not sum to 100% due to “don’t know” responses.-How do you expect your company’s sales to change over the next 12 months?-Which best describes how you think the size of the overall specialty-equipment industry will change in the next 12 months? Base: Total Per Group

Increase Stay Same Decrease

Retailers are slightly more likely to expect the industry to keep growing


12% 11% 7%

37% 32% 31%

46%44%

55%


Expected Change in Industry Sales Over the Next 12 Months

4% 3% 3%

16% 21% 21%

76% 69% 72%


Expected Change in Company Sales Over the Next 12 Months

Nearly all businesses report a stable or growing customer base

11

Note: Values may not sum to 100% due to “don’t know” responses.-Which best describes how the size of your customer base has changed in the past 12 months? -How has the number of younger customers (under 30) changed for your company in the past 12 months? Base: Total Per Group

Many manufacturers and distributors may have less insight than retailers into who their customers are

8% 14% 8%

29% 26% 30%

60% 61% 61%


Change in Customer Basein the Past 12 Months

4% 11% 10%

29% 29%14%

40% 39% 46%

27% 21%30%


Change in Customers Under 30in the Past 12 Months

Don’t knowIncreased Stayed Same Decreased

88%

49%

21%

79%

40%

52%

69%

29%

61%

Added brand-newproducts

Added line-extensionproducts

Added products thatalready existed, but we

weren't selling previously

A majority of companies are carrying more product lines

12

Note: Values may not sum to 100% due to “don’t know” responses.-Has the number of product lines your company offers increased, decreased, or stayed the same over the past 12 months? -What factors have contributed to this increase? Base: Total Per Group

Factors That Contributed toIncreased Product Lines

This increase is driven primarily by adding brand-new products.

Manufacturer

Distributor

Retailer/Installer

Among Those Who Added Product Lines in the Past 12 Months

3% 7% 4%

32% 34% 36%

64% 57% 59%


Change in Product Lines Offeredin the Past 12 Months


2%

3%

3%

3%

3%

4%

6%

7%

7%

8%

17%

20%

Adapting to/competing with online retail

Finding and hiring quality staff or technicians

Too many players/product types to manage

Staying up-to-date on latest information, trends and technologies

Increasing business costs / eroding margins

More complex, harder-to-modify vehicles

Overseas competition / low quality imports

Engaging younger consumers/aging customer base

Unfavorable economic conditions/recession

Declining consumer involvement / declining vehicle ownership

Tariffs/trade policy and raw material costs

Unfavorable legislation or regulation (EPA, CARB, Nexus, etc.)

No single issue dominates industry concerns

13

Percentages may sum to more than 100% due to multiple themes applying to a response

-What is the biggest issue facing the specialty-equipment industry in the next five years?Base: Total Per Group

Concerns around regulations and trade policy are relatively common, but no one issue rises to the top across business groups


Biggest Issue Facing the Industry Over Next five Years

8%

8%

7%

4%

7%

4%

4%

8%

13%

7%

14%

11%

5%

8%

3%

4%

6%

4%

2%

3%

6%

7%

7%

26%

Manufacturer Distributor*Retailer/ Installer

Sales 59% 70% 51%

General Labor 56% 53% 36%

Business Management 43% 44% 24%

Customer Service/Call Center 40% 58% 35%

Automotive Trades 17% 19% 67%

Engineering / Product Dev 54% 12% 3%

Facilities / Operations 32% 23% 13%

Information Technology 24% 23% 15%

Skilled Trade 30% 9% 11%

Inventory Management 29% 28% 15%

Many manufacturers added staff over the past year, while most retailers kept head count stable

14

Note: Values may not sum to 100% due to “don’t know” responses.-How has the total number of people employed by your company changed in the past 12 months? -Which types of jobs have you hired for in the past 12 months?Base: Total Per Group

Leading Jobs Hired forin the Past 12 Months

Retailer/Installers are hiring in the automotive trades, distributors are hiring in sales and customer service, manufacturers are hiring engineers along with salespeople and general laborers

Among Those Who Added Employees In the Past 12 Months*small sample size

Blue numbers denote statistical significance compared to at least one other group

14%9% 9%

41%53%

63%

43%37%

27%


Change in Number of Employeesin the Past 12 Months


<1%

2%

3%

4%

6%

6%

6%

9%

12%

34%

Better understanding of younger consumers

More/better data and education on products for end-users

Better staffing and support

Stronger partnerships/expanded network of suppliers, reps, or retailers

Reduced competion or better pricing

Improve/expand product offerings or applications

Improved online/social media presence

Improve operations (e.g., logistics, strategy, distribution, funding)

More favorable government/regulatory or economic conditions

More effective marketing strategies

Some businesses feel savvier marketing is their best bet for more sales

15

Percentages may sum to more than 100% due to multiple themes applying to a response.

-What one thing could most help your company sell more products?Base: Total Per Group

Distributors think better prices or reduced competition would be just as helpful


What Could Most Help Improve Sales (Top Themes)

3%

6%

2%

14%

19%

12%

14%

8%

8%

27%

5%

6%

3%

11%

7%

11%

9%

7%

28%

2%

2%

9%

22%

55%

5%

1%

4%

7%

15%

49%

5%

2%

3%

7%

22%

42%

2%

More than20%

16% to 20%

11% to 15%

6% to 10%

1% to 5%

0%

Percentage of Company RevenueSpent on Marketing/Advertising

ManufacturerDistributorRetailer/Installer

Companies who feel marketing is key to boosting sales may be increasing their spend

16

Note: Values may not sum to 100% due to “don’t know” responses.-Which best describes how your company’s spending on marketing and advertising has changed compared to 12 months ago?-Approximately what percentage of your company’s revenue is spent on marketing and advertising? Base: Total Per Group

Marketing and advertising are typically a small part of company expenses, but some companies are scaling up

Median

4%15% 7%

13%

44%63%

50%

37%

28%34%


Change in Marketing/Advertising Spend in the Past 12 Months


CATEGORY SALES

Pickups, sports cars, and SUVs (including Jeeps) make up the top three vehicle segments for the industry

18

Percentages indicate the number of companies selling products in each segment.Colored bars indicate changes in sales in the past 12 months.

-How have your company’s sales changed in the past 12 months, if at all, for each of the below vehicle segments? Base: Total Per Group

Most are stable or growing, but racing and classics are a little more likely to be seen as under threat


Pickup

Sports Car

SUV

Mid Range Car

Racing

Classic

Upscale Car

Small Car

Van

CUV

Powersports

Alternative Power

Increased Stayed Same DecreasedVehicle Segments Sold to in the Past 12 Months

70%

64%

63%

54%

54%

53%

48%

47%

43%

43%

38%

28%

80%

75%

74%

65%

55%

72%

57%

56%

55%

54%

43%

38%

80%

70%

70%

67%

47%

60%

57%

61%

67%

67%

49%

41%

Independent specialty retail is the most common sales channel

19

Percentages indicate the number of companies selling products through each channel.Colored bars indicate changes in sales in the past 12 months.

-How would you say your company’s sales from each of the channels you sell through have changed over the past 12 months? Base: Total Per Group

Online direct sales to consumers is showing the most growth for manufacturers and distributors while a growing number of retailer/installers are using online classified sites


ON

LIN

EIN

-ST

OR

E

Increased Stayed Same DecreasedRetail Channels Sold Through in the Past 12 Months

35%

33%

39%

47%

62%

76%

57%

28%

49%

31%

44%

35%

46%

34%

53%

62%

44%

67%

81%

27%

32%

42%

38%

49%

41%

58%

29%

32%

43%

45%

55%

63%

83%

21%

29%

37%

39%

54%

54%

73%

Tire Shop

General Retail Chains

Auto Parts Chains

New Vehicle Dealership

Car / Truck Show

Direct Sales to Consumer

Independent Specialty

Online Classified


Online Auction Sites

Auto Parts Chains

Online-Only Retailer

Online Specialty Retailer


Independent retail also accounts for the largest share of specialty automotive distribution

20

-Roughly what percentage of your company’s product sales come from each of the retail channels below?Base: Total Per Group


Average % of Company Sales From Each Channel

ON

LIN

EIN

-ST

OR

E

2%

2%

3%

3%

6%

11%

21%

1%

1%

2%

2%

5%

7%

18%

Tire Shop


Car / Truck Show

Auto Parts Chains



Independent Specialty

Online Classified



Auto Parts Chains

Online-Only Retail

Online Specialty Retailer


6%

1%

2%

3%

10%

17%

24%

1%

<1%

4%

2%

5%

3%

12%

2%

2%

11%

6%

6%

30%

12%

1%

7%

3%

5%

4%

Online classifieds/marketplaces are used by retailers to supplement more traditional channels

Many retailer/installers report growth in lighting, wheels/tires, and suspension/brakes/steering

21

Percentages indicate the number of companies selling products in each category.Colored bars indicate changes in sales in the past 12 months.

-How have sales of these categories [this category” if 1 selected] changed in the past 12 months? Base: Total Per Group


25%

24%

22%

21%

20%

18%

16%

16%

14%

14%

13%

11%

10%

5%

Suspension / Brakes / Steering

Exterior Accessories

Exterior Body Upgrades

Interior

Intake / Fuel / Exhaust

Wheels / Tires

Engine Internal and Cooling

Engine Electrical and Ignition

Drivetrain

Lighting

Chemicals

Mobile Electronics

Safety Gear

Driver Assist Systems

Product Categories Sold in the Past 12 MonthsIncreased Stayed Same Decreased

37%

32%

31%

28%

32%

32%

28%

35%

28%

35%

44%

19%

21%

15%

59%

45%

49%

48%

50%

53%

38%

43%

41%

52%

29%

35%

21%

20%

8%

9%

10%

11%

5%

6%

8%

8%

8%

9%

6%

6%

6%

6%

Forced Induction Systems

Air Intake Products

Carburetor & Fuel System

Exhaust Products

Battery Products

Engine Dress-Up Products

Ignition Products

Engine Control & Computer

Internal Engine Products

Cooling System Products

Clutches & Related Products

Axles & Differential

Transmission & Sensor Products

Shifters

Exhaust, fuel system, and intake products are particularly strong for retailers

22


-Below is a list of more specific categories we have discussed. How have sales of these categories changed in the past 12 months?Base: Total Per Group

Manufacturer Distributor Retailer/InstallerIncreased Stayed Same Decreased

Detailed Product Categories Sold in the Past 12 Months

Dri

vetr

ain

En

gin

eIn

take

/Fu

el/

Exh

aust

17%

22%

25%

25%

23%

18%

26%

21%

25%

21%

23%

21%

22%

18%

33%

43%

40%

43%

35%

30%

38%

35%

33%

33%

36%

35%

34%

31%

7%

9%

10%

5%

7%

8%

9%

10%

10%

12%

13%

14%

Dash System & Gauges

Seats & Upholstery

Floor Mats & Interior

Truck Caps

Truck Bed Covers

Truck Bed Liners & Accessories

Trailer & Towing Products

Graphics & Body Finishing

Truck Accessibility

Exterior Appearance Upgrades

Racks & Carriers

Body, Trim, & Exterior

Manufacturers universally report growing sales across all exterior product categories

23



Manufacturer Distributor


Ext

erio

rIn

teri

or

Retailers report strong growth in graphics and body finishing products

15%

14%

21%

15%

20%

24%

21%

21%

23%

21%

23%

21%

Retailer/Installer

35%

33%

38%

21%

32%

32%

34%

35%

35%

40%

34%

40%


3%

4%

4%

4%

4%

5%

6%

7%

9%

4%

5%

6%

Alarms & Security Products

Wireless & Smart Phone


Navigation Systems

Mobile TV & Video Cameras

Sound System & Audio

Interior Lights

Head/Tail Lights

Accessory Exterior Lights

Touch-Up Paint

Maintenance Oils & Additives

Wax & Cleaning Products

Lighting products show growth across all primary business types

24



Manufacturer Distributor


Lig

htin

gM

ob

ile E

lectr

on

ics

Ch

em

ica

ls

11%

9%

11%

8%

10%

10%

26%

30%

30%

16%

28%

25%

Retailer/Installer

24%

23%

18%

23%

25%

27%

41%

44%

47%

12%

22%

19%


9%

9%

11%

10%

12%

17%

3%

5%

Off-Road / Plus-Size Tires

Performance / Special PurposeTires

Custom Wheels

Brake Products

Steering Products

Suspension Products

Racing and Protection Apparel

Roll Cage and Safety Products

Suspension and brake products are the most popular category for retailer/installers

25





Su

sp

ensio

n/

Bra

ke

s/S

tee

rin

gW

he

els

/Tir

es

Sa

fety

Wheel and tire products show strong growth

18%

21%

21%

24%

25%

32%

11%

15%

38%

42%

46%

48%

47%

54%

14%

19%


MANUFACTURERINSIGHTS

The majority of manufacturers are optimistic about their own growth

27



Expected Change in Company Sales Over Next 12 Months

Expected Change in Industry-Wide SalesOver Next 12 Months


While they are less optimistic about the industry’s prospects, only about one in 10 expect it to decline this year

11% 15% 19%

79% 81% 71%

1% 3% 6%

<$1M $1M-$10M $10M+

39% 37% 43%

41% 43%42%

11% 13% 11%

<$1M $1M-$10M >$10M<$1M $1M – $10M >$10M <$1M $1M – $10M >$10M

Smaller manufacturers sell through fewer channels and rely heavily on direct-to-consumer sales

28

Percentages indicate the number of companies selling products through each channel.Colored bars indicate changes in sales in the past 12 months.

-How would you say your company’s sales from each of the channels you sell through have changed over the past 12 months? Base: Total Per Group

Direct-to-consumer and online-only general are growing in popularity for larger manufacturers, but independent retail is still the most common channel

Manufacturer

ON

LIN

EIN

-ST

OR

E


Retail Channels Sold Through in the Past 12 Months

34%

40%

56%

57%

50%

55%

89%

48%

42%

61%

37%

20%

62%

63%

27%

31%

39%

37%

60%

75%

85%

39%

24%

61%

43%

18%

60%

80%

11%

17%

21%

23%

55%

63%

70%

14%

15%

31%

37%

37%

42%

89%

<$1M $1M – $10M >$10M


Online-Only General Retailer

Online Classified Ads


Online-Only Auto Retailer


Auto Parts Chains

Independent Specialty Retailer/Installer


Car/Truck Show


Auto Parts Chains


Tire Shop

<$1M $1M – $10M >$10M


Sales 39% 56% 65%

Engineering / Product Dev. 44% 40% 62%



Customer Service/Clerical 17% 29% 39%

Facilities / Operations 17% 22% 42%

Inventory Management 11% 16% 35%



66%

36% 37%

25%

40%48%

8%24%

14%

<$1M $1M-$10M >$10M

Larger manufacturers are more likely to be adding headcount, while some mid-size firms are streamlining staff

29


Change In Number of Employeesin Past 12 Months



Larger manufacturers are also more likely to be hiring for multiple roles, especially support staff

Among Those Who Added Employees In Past 12 Months


<$1M $1M – $10M >$10M

Percent of Sales Devoted to Advertising/Marketing

7%

38%

27%

11%

4%

8%

3%

50%

23%

9%

3%

2%

46%

19%

6%

3%

1%

0%

1% to 5%

6% to 10%

11% to 15%

16% to 20%

>20%

<$1M $1M – $10M >$10M

Small manufacturers report spending a higher percentage of their revenue on marketing than larger companies

30

Note: Values may not sum to 100% due to “don’t know” responses.-Approximately what percentage of your company's revenue is spent on marketing and advertising? -Which best describes how your company's spending on marketing and advertising has changed compared to 12 months ago?Base: Total Per Group

Change in Advertising/Marketing Spend in the Past 12 Months

14% 19% 15%

48% 41% 42%

38%36% 40%

<$1M* $1M-$10M >$10M


<$1M $1M – $10M >$10M

RETAILER/INSTALLERINSIGHTS

Larger retailers are less optimistic than others about the industry’s prospects for the coming year

32



Expected Change in Company Sales Over the Next 12 Months

Expected Change in Industry-Wide SalesOver the Next 12 Months


22% 21% 20%

70% 75% 68%

5% 2% 5%

<$500K $500K-$2M >$2M

27% 28%39%

56% 61% 42%

7% 6%10%

<$500K $500K-$2M >$2M<$500k $500k – $2M >$2M* <$500k $500k – $2M >$2M*

*small sample size

Most retailer/installers report a stable or growing customer base and increased sales

33

Note: Values may not sum to 100% due to “don’t know” responses.-Which best describes how your company's sales have changed over the past 12 months? -Which best describes how the size of your customer base has changed in the past 12 months?Base: Total Per Group

Company Sales Over the Past 12 Months

Change in Customer Base Over the Past 12 Months

8%10%

4%

29% 28% 26%

63% 63% 65%

<$1M $1M-$10M >$10M*

15%10% 9%

29% 25% 26%

55% 65% 65%

<$1M $1M-$10M >$10M*

Increased Stayed Same DecreasedIncreased Stayed Same Decreased

Smaller retailers are a little more likely to report a sales decline

<$500k $500k - $2M >$2M <$500k $500k - $2M >$2M

Larger retailers are more likely to sell a broad range of product types, particularly wheels / tires and exterior utility accessories

34

Percentages indicate the number of companies selling products in each category.Colored bars indicate changes in sales in the past 12 months.

-How have sales of these categories [this category” if 1 selected] changed in the past 12 months? Base: Total Per Group

14%

17%

23%

32%

33%

33%

33%

36%

39%

40%

44%

45%

49%

56%


Safety Gear

Chemicals

Mobile Electronics

Drivetrain

Engine Internal and Cooling

Exterior Utility Accessories

Engine Electrical and Ignition

Interior

Wheels / Tires

Intake / Fuel / Exhaust

Lighting

Suspension / Brakes / Steering

Exterior Body

Product Categories Sold in the Past 12 Months

20%

32%

32%

32%

54%

44%

53%

58%

59%

60%

64%

59%

68%

47%

32%

21%

40%

37%

40%

40%

60%

38%

52%

71%

44%

59%

65%

38%

<$500k $500k - $2M >$2M

Retailer/Installer

<$500k* $500k – $2M* >$2M


Customer Service 21% 25% 43%

Sales 21% 35% 71%





Engineering / Product Dev. -- -- 3%

Facilities / Operations -- 15% 20%

Inventory Management -- 20% 20%

77%58%

38%

18%

25% 56%

4% 17% 6%

<$500K $500K-$2M >$10M*

Fewer than one in ten retailer/installers report headcount reduction last year

35


Change in Number of Employeesin the Past 12 Months



Sales and automotive trades staff are in high demand for larger manufacturers

Among Those Who Added Employees In the Past 12 Months


<$500k $500k – $2M >$2M

NOTE: Small base sizes, be careful when interpreting results

*small sample size

7%

59%

21%

8%

2%

1%

4%

48%

31%

9%

3%

1%

56%

21%

13%

2%

2%

0%

1% to 5%

6% to 10%

11% to 15%

16% to 20%

>20%

<$500k $500k – $2M >$2M

A majority of larger retailer/installers have devoted more resources to advertising and marketing

36

Note: Values may not sum to 100% due to “don’t know” responses.-Approximately what percentage of your company's revenue is spent on marketing and advertising? -Which best describes how your company's spending on marketing and advertising has changed compared to 12 months ago?Base: Total Per Group

8%21%

10%

59% 56%

29%

30%22%

59%

<$500K $500K-$2M >$2M


*small sample size

<$500k $500k – $2M >$2M

Percent of Sales Devoted to Advertising/Marketing

Change in Advertising/Marketing Spend in the Past 12 Months

by Unknown Author is licensed under CC BY-SA

LEGAL AND REGULATORY ISSUES

https://creativecommons.org/licenses/by-sa/3.0/

Manufacturers are focused on tariffs and IP protection while retailer/installers are more concerned with taxes, healthcare, and job training programs

-Think about the below legislative/policy topics. Then, please rank them in order of how important they are to your business.Base: Total Per Group

11%

3%

24%

24%

8%

20%

7%

3%

25%

23%

44%

28%

17%

28%

18%

13%

33%

19%

8%

14%

13%

7%

5%

2%

34%

38%

35%

25%

18%

22%

13%

10%

Legislative/Policy Issue Ranking

1st 2nd or 3rd

25%

7%

21%

22%

10%

12%

4%

36%

19%

39%

32%

23%

31%

12%

9%

Trade policy and tariffs

Intellectual property protection

Taxes

Affordable healthcare

U.S. EPA and California Air Resources Boardenforcement

Job training programs (skills training,apprenticeships, etc.)

Off-Road recreational access for motorizedvehicles

Federal deficit

Manufacturer

Distributor

Retailer/Installer

23%

27%

28%

48%

49%

66%

64%

60%

44%

42%

11%

9%

12%

9%

9%

Warranty-denial concernsfor modified vehicles

Getting access to vehiclesystems and/or software

code

Getting access to vehicleschematics or CAD data

Tariffs on importedaluminum

Tariffs on imported steel

Policy Focus

Feeling an impact Not impacting us, but likely affects others Not affecting the industry

Tariffs are widely perceived as having an impact on the industry

-What impact, if any, are each of the following having on your business?-Which of these best describe how you feel about the new tariffs on international trade, given the stated policy aims of the current administration?Base: Total Per Group

16%

18%

22%

19%

25%

Strongly in favor

Somewhat in favor

Neutral on them

Somewhat opposed

Strongly opposed

Position on New Tariffs

However, only 25% of respondents strongly oppose the new tariff policy

Those affected by steel and aluminum tariffs are more likely to oppose them

Note: Percentages are an average of sentiment on steel and aluminum tariffs, which were measured separately but had similar results-What impact, if any, are each of the following having on your business?-Which of these best describe how you feel about the new tariffs on international trade, given the stated policy aims of the current administration?Base: Total Per Group

Businesses supporting the tariffs are more likely to see them not affecting the industry

15%

18%

33%

17%

18%

21%

24%

27%

18%

12%

18%

18%

32%

19%

10%

Don't think they're affecting the industry

They're not impacting us, but likely affects others

We're feeling an impact

Feelings About New Tariffs

Strongly opposed Somewhat opposed Neutral on them Somewhat in favor Strongly in favor

While manufacturers are less likely to feel directly impacted by the tariffs, they are at least as likely to oppose them

-What impact, if any, are each of the following having on your business?-Which of these best describe how you feel about the new tariffs on international trade, given the stated policy aims of the current administration?Base: Total Per Group

42%54% 53%

47%36% 40%

11% 10% 7%


Impact of Tariffs by Business Type

Don't think they're affecting the industryThey're not impacting us, but likely affects othersWe're feeling an impact

28% 28% 19%

23% 19%14%

18% 20%28%

16% 15% 21%

14% 18% 18%


Opinion of Tariffs by Business Type

Strongly opposed Somewhat opposed

Neutral on them Somewhat in favor

Strongly in favor

Aftermarket businesses are highly integrated in a partnership ecosystem, with nine out of ten sourcing from others

42

Note: Multiple mention responses sum to greater than 100%-Which of these does your company regularly purchase from other businesses? -For those items you selected, are they purchased from domestic suppliers, international, or both? Base: Total Per Group

One in four are exclusively or mostly sourcing from outside the US

Among Those Who Regularly Purchased

10%

4%

9%

75%

4%

16%

44%

82%

10%

64%

59%

42%

None of these

Processed raw materials

Finished components orsubassemblies

Fully manufacturedproducts

Sourcing from Other Businesses

34%

35%

33%

33%

19%

20%

13%

19%

18%

8%

17%

16%

5%

5%

7%


Finished components orsubassemblies

Fully manufacturedproducts

Point of Origin

Exclusively U.S. Mostly U.S.

Equal U.S. / international Mostly international

Exclusively internationalManufacturerDistributorRetailer/Installer

Most internationally sourced products, subassemblies, and materials come from Asia

43

Note: Multiple mention responses sum to greater than 100%-And where are your international suppliers located?Base: Those Who Regularly Purchased and Sourced Internationally

24%

11%

13%

4%

3%

4%

18%

18%

21%

20%

20%

23%

25%

25%

27%

55%

72%

65%


Finishedcomponents/subassemblies

Fully manufactured products

Country/Region of Origin(Among Those Who Source Internationally)

Asia

Mexico/CentralAmerica

Europe

Canada

Other

Don’t know

Manufacturers are particularly likely to source products and materials from Asia

44

Note: Multiple mention responses sum to greater than 100%NX19. And where are your international suppliers located?Base: Those Who Regularly Purchased and Sourced Internationally

29%

14%

22%

7%

4%

17%

29%

17%

15%

22%

32%

14%

24%

39%

43%

61%

Processed Raw Materials

Asia

Mexico/Central America

Europe

Canada

Other

I don’t know16%

10%

8%

4%

7%

2%

21%

30%

14%

13%

27%

23%

27%

17%

26%

62%

60%

81%

Finished Components/Subassemblies

18%

11%

6%

3%

7%

4%

24%

34%

9%

20%

30%

24%

27%

36%

23%

57%

57%

82%

Retailer/Installer

Distributor

Manufacturer

Fully manufactured Products

by Unknown Author is licensed under CC BY-SA

ADDITIONAL INFORMATION

https://creativecommons.org/licenses/by-sa/3.0/

46

Results in this report are based off 1567 interviews conducted with individuals from specialty-equipment manufacturers, distributors, retailers and installers conducted in late 2019.

SEMA conducts these interviews twice a year in conjunction with our independent research partner, MDC Research. If you are among the industry professionals invited to participate, please do.

We would love to hear from you!

REPORT BACKGROUND

QUESTIONS? Contact us

47

Comments and suggestions appreciated.

Happy to provide clarifications.

Open-ended responses available.

SEMA Market Research is here to help.

Gavin Knapp

Director, Market Research

[email protected]

Kyle Cheng

Manager, Market Research

[email protected]

Matt Kennedy

Manager, Market Research

909-978-6730

[email protected]

about this report · 2020-02-27 · about this report 2 getting the specialty-equipment market’s...

Documents