How does the specialty business look for 2008?
The automotive specialty-equipment market has grown an average of seven percent per year for the last 10 years. This is significantly more than the general automotive aftermarket and more than the U.S. economy in general. That said, I expect the aftermarket to continuing growing in 2008 — at about five percent to six percent. I do believe there will be segments of the aftermarket that will see some of the softness realized in 2007 as a result of economic conditions, but it will not be because of waning demand or lack of innovation.
What is your biggest challenge as SEMA's new chairman, and how will you address it?
There are two issues that I see as equally challenging for SEMA members and the industry. Legislative/regulatory issues and complex vehicle technology are equal in scope and severity. Legislative/regulatory issues have become a moving target due to the sheer amount of harmful bills that present themselves from the state and federal level almost daily. The team at the SEMA Washington, D.C. office is focused on identifying and acting on any legislation that unfairly impacts our member companies and the industry as a whole. In 2008, SEMA will hold its semiannual SEMA Washington Rally. This is a perfect opportunity for SEMA member companies to sit face-to-face with their respective representatives to discuss issues that impact their businesses. But just as important in those meetings is to tell the legislators the story of what impact the aftermarket industry wields in jobs, votes and tax base revenues.
Complex vehicle technology also continues to present accelerating challenges to our member companies. Many of these challenges are a direct result of what vehicle manufacturers are doing to comply with legislative activity on the federal level. So you see, these two challenges are somewhat linked. Fending off progressive milestones in technology is not very practical or probable. What we have to continue to do as an association is work with vehicle manufacturers to ensure our members have access to advanced technology enabling continuing development of innovative products for the market.
Do you think the traditional aftermarket and specialty aftermarket are coming closer together? Why or why not?
Certainly, but one has to view them as a single market. The differentiation comes from the needs each fills, which is wants or needs. Considering that the challenges we spoke about earlier affect both facets, the only way to present a strong presence is to be united in resolve. From a marketplace point of view, I believe the two have come closer together over the years and continue to do so, especially in distribution circles.
How have high gas prices and a tight economy affected the specialty parts industry?
These are just two of the economic elements affecting the industry, and they have certainly not helped. Gas prices at $3 per gallon had a definite affect the first time this milestone was realized. Gas prices then fell back down for some time, until the current rise in Q4. My own sense is that this rise in gas prices is not having as severe of an impact, compared to the first time around, as the nation has become accustomed to these levels. Further increases in gas price levels, should they become reality, will have a negative impact. When we couple a presidential election year, high fuel prices, a mortgage crisis, falling home prices and a war, one has to consider that large growth is not a reality. Except, in the automotive specialty-equipment market, it continues to post seven percent growth averages year on year. That says a lot for car folks.
