🤫 The Biggest SEMA Secret
What’s behind those shiny booths? Industry uncertainty.
HAPPY RACE DAY! especially to the World Endurance Championship, or WEC, hosting its season finale this weekend for the title. It’s Porsche vs. Toyota for all the marbles. Toyota will likely need a win and some luck to claim first.
Here’s a season recap to get you in the mood for the 8 Hours of Bahrain this Saturday. It’s long, but click around for some awesome action:
In today’s email: 👇
Dusty Delights: Reports from RM Sotheby’s controversial auction
SEMA Show Preview: What to expect from next week’s convention
Auto Media Earthquake: New ventures and where to find them
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Next week the SEMA Show begins in Las Vegas. It’s the aftermarket industry’s biggest showcase, and I’ll be there providing coverage. Articles from the show will be paywalled, so upgrade your subscription to get the latest scoops as they happen.
FIRSTHAND REPORT: RM SOTHEBY’S
One Collector’s Trash, Another’s $9.4M Treasure
THE DUST HAS SETTLED on the barn find sale of the year. RM Sotheby’s The Junkyard auction, held in Los Angeles last weekend, totaled an astounding $29.6 million and doubled pre-auction estimates.
Site-specific sales always do well for the big auction houses, whether they consist of barn finds or concours-quality items, but this one dazzled with its extravagance.
Autoweek’s Mark Vaughn marveled at the 1962 Porsche 356 B 1600 Twin Grille Cabriolet, which sold for $1,050,000 when, as Vaughn noted, the same auction house shifted a “perfect condition” example in Monterey for $362,500. DuPont Registry, always a sucker for supercars, highlighted the 1968 Lamborghini Miura P400 by Bertone, which sold for $1,325,000. Men’s Journal devoted an article to a one-of-twenty-nine 1956 Mercedes-Benz 300 SL with an alloy body, which sold for $9,355,000, the highest value ever achieved for the model.
(Full disclosure: I used to work for RM Sotheby’s, and I still occasionally freelance for them. I’m thrilled for the team, and equal parts jealous that I didn’t get to work on such an exciting project as well as relieved I was spared many hot hours laboring in a junkyard in South L.A.)
Three days prior to the sale, I was having lunch with an old colleague who now works for a competing auction house. He was visiting Los Angeles for a sit-down with the company lawyer. This auction house held a successful sale of marque-specific parts earlier this year, and the attorney was expressing anxiety about the results. “How can you prove that these parts were not stolen or didn’t come from a chop shop?” he asked. “If someone puts them on their car, what if they cause an accident?”
Certainly if this lawyer worked for eBay, their business model as a used parts superstore would be in question. And it cast our minds back to The Junkyard, where alongside all of the headlining cars, RM Sotheby’s sold hundreds if not thousands of individual parts. Becker radios and Ferrari transmissions, Gullwing doors and full Porsche engines. Shelves of Porsche 356 parts.
These items were technically sold as memorabilia, with a higher percentage buyer’s fee and lower expectations of operation. Their originality (not to mention that magic barn dust) added an extra layer of mystique—and value.
But I’m curious what you think—should auction houses sell used parts, or is there too much risk of theft or mishap? The buyers certainly didn’t seem to mind.
SEMA PREVIEW 2024
Who’s Winning SEMA This Year?
BY THIS TIME next week the SEMA Show will be fuller than a Dodgers bandwagon. I talk about SEMA a lot because it’s the clearest window into the strength of the aftermarket. And its annual convention in Vegas is the closest thing there is to an automotive circus.
People go to the circus to be amazed. At SEMA, that means wowing people with the latest technology and flashiest products—sleek black fuel injection systems or lowering springs for the new Camry. SEMA is a chance to peacock unabashedly.
But this year, there’s an undercurrent that can’t be hidden by the latest turbochargers, coilovers or 28-inch rims. The aftermarket has struggled in a post-COVID economy. Sales boomed during the pandemic. Reality has set in since then.
SEMA says the industry grew about 1% to more than $52 billion in sales in 2023, and should crest $53 billion this year. Those are big figures, but they’re relatively stagnant when you consider thousands of companies are fighting for tiny shares of that pie.
Brands are feeling a pinch. Several insiders have told me sales are soft this year:
High interest rates slowed new car sales, which means fewer people are customizing their new rides.
More working from home means fewer miles driven overall, decreasing the need for replacement parts.
Inflation across the board cut into discretionary spending.
Aftermarket brands still have their diehard customers. There are always racing teams and amateur track drivers that need parts. Every day in America, a teenager turns 17 and acquires their first Civic or Corolla. They’re gonna need parts. But it isn’t easy.
Wheel and tire companies have struggled. SEMA is flooded with these brands showcasing impressive builds across the convention floor, but only 25-percent of performance tire brands reported growth in 2023. With fewer miles being driven in 2024, that number may be the same. Or lower.
Remember that Wheel Pros—the company that owns Hoonigan and filed for bankruptcy in September—relied heavily on sales from its wheels and tires brands. Their difficulty adapting likely hastened the financial situation.
Recent earnings calls for AutoZone and O’Reilly Auto Parts also noted a slow aftermarket. American Tire filed for bankruptcy last week. A report on Motorcar Parts of America stated things plainly:
“Sluggish demand in the tire industry is hurting this outlook. When consumers put off tire replacements, MPAA loses key cross-selling chances for brakes, slowing growth.”
Now look, sales may be slow. But companies know that industry slowdowns also provide huge opportunity. The brands that can innovate their products, streamline distribution and build a dedicated fanbase will be poised for growth.
SEMA is a great place to build a fanbase. A flashy build can go a long way. As retail locations struggle and customers become more comfortable buying direct-to-consumer, having a large in-house following is worth its weight in gold plated rims.
There’s a huge opportunity this year. While Toyota, Kia and Jeep figure to have a major presence, other automakers like Ford and Chevrolet have relinquished floor space to specialty part makers. I’ll be watching to see who makes the biggest splash.
MEDIA UPDATES
With all the shake-ups in automotive media recently, journalists are launching their own platforms to keep their careers going. Here are three to follow:
Seyth Miersma (formerly Motor1.com, CarID) announced Cars Fancy which reviews new cars, covers watches and fashion, and starts hot-topic debates.
Rory Carroll (formerly Jalopnik, Autoweek) launched the Tired podcast with deep dives into motorsport and industry insights.
Chad Kirchner (formerly EVPulse) started the Kirchner Report newsletter and has a great article on why dealerships hate the Scout sales model.
And Finally…
If you click on one link from this newsletter, make it this one. Galpin Motors has released several short films with Porsche enthusiasts in recent weeks. But the story of the late Nicole Ryan is beyond touching—it’s a wonderful tribute to her memory.
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