Well, it’s mid-September as we write this the National Bureau of Economic Research has just announced that the longest recession on record since World War II “officially” ended in June 2009.
It was a very long 19 months, and many may argue that it still feels as if we are in a recession and that very little has changed since last June. We have made it quite clear in our past submissions how we feel about the macro environment and initiatives underway by the current administration to make things better. All we will say about it this month is if you will be at the Automotive Aftermarket Product Expo (AAPEX) Show in November, please make sure you have filed for your absentee ballot.
On the subject of AAPEX, however, it’s hard to believe that it’s almost time for the show again. Time flies, and it’s even better when business is good. We thought the tone from last year’s show was relatively upbeat as many participants (vendors, consultants, distributors, etc.) were benefitting from some of the more favorable industry trends experienced in some time, and heading into the show there was much more optimism than we would have anticipated given the prevailing macro backdrop.
One difference this year will be the absence of the collision repair (NACE has moved to October) portion of the show that was typically held during the same week each year. In our opinion, this is an unfortunate development, as we believed that the overlap of the two shows was helpful in bringing together more participants from two key industry segments.
We expect AAPEX and the Specialty Equipment Market Association (SEMA) shows to be strong this year. We were disappointed with the overall showing at SEMA last year, as sluggish demand for accessories and performance products and the lack of participation from many of the major tire manufacturers led to a level of enthusiasm and excitement that was much below that of prior shows. We anticipate the tire segment of SEMA to be much better this year — as replacement shipments have begun to recover and many tire company profits and losses have dramatically improved — however, until consumers regain confidence, which likely comes with job growth and lower unemployment, we believe the tuner and specialty equipment market segment is likely to remain under pressure.
Given the strength in trend seen by many in the aftermarket this year, we think AAPEX attendance will be up as will participation by vendors. We are not talking about the downstairs of AAPEX either, as what has perhaps been most encouraging so far this year is how well the traditional aftermarket suppliers have fared, with their sales closing the performance gap with their customers as destocking has finally run its course.