The Path to a $50 Billion Aftermarket
The latest aftermarket industry report from SEMA projects a speedy recovery from the pandemic based on demand for new products. Is it realistic?
A weekly newsletter by Ryan K. ZumMallen | @zoomy575m
Happy Race Day, especially to whatever is happening here:
I have a confession. Back in May 2020, when I spoke with SEMA Vice President of Events Tom Gattuso about the state of the automotive aftermarket and he told me “Our industry is going to be okay,” I was a little skeptical.
Remember. We were in the early stages of lockdown, with little evidence that things would get better (they wouldn’t) and a lot of evidence that they would get worse (they would). SEMA canceled its massive annual convention just a few weeks later.
That doesn’t mean enthusiasts stopped spending. In fact, after initial drops, aftermarket companies quickly saw sales recover and even exceed pre-pandemic levels. According to a SEMA report released in January, auto-related sales reached record highs by the end of 2020.
Further, the report projects that the automotive aftermarket will see 4% growth from 2019 figures to reach $48 billion in annual sales by 2023, and in a best-case scenario it could hit $50.9 billion for the first time.
One excerpt from the SEMA report that caught my eye said the following:
In 2020, many specialty-equipment businesses were buoyed by enthusiasts who spent more on their cars, as other spending options were unavailable. If the virus situation continues longer than expected, can our industry continue to draw on enthusiasts elevated spending or will the continued uncertainty tighten purse strings?
That’s a critical question. And I don’t have an answer. But I know what I’ve seen with my eyes, which is no slowing down in the collective enthusiasm of automotive enthusiasts for the culture that fuels those sales.
For the past year it’s certainly seemed that interest in car culture has only increased, whether you measure by social media posts or the size and attendance and variety of events that are held in new, exciting, distance-safe ways. It seems now that SEMA has figures to back that up.
One chart showed that 80% of the automotive jobs initially lost at the beginning of the pandemic have already returned. It took eight years for the industry to fully recover from the Great Recession, by contrast.
SEMA is now projecting a return to in-person events by September, and a return to normal business by late 2021 or early 2022.
I guess we’ll see. One can hope.
Culture
Remember the Super Bowl? During the halftime show, the singer The Weeknd (XO for lyfe) made his debut in a custom Mercedes in the signature style of L.A. fabricator @Slang500. He posted several behind the scenes posts on IG you may enjoy.
It’s the 10-year anniversary of Frank Ocean’s album Nostalgia:Ultra, which A) is incredible and B) featured iconic cover art of a BMW E30 M3 that set the vibe for a generation of cultural influencers and slow car fast enthusiasts. This is not an exaggeration.
Go listen to it as tribute.
I fully love this thread by auto journalist Alanis King of her recent photos of diecast model cars and their real-life surroundings. The mail truck made me laugh out loud.
“A Bit Much” should probably be the title of my second book, right? Right.
Video Reel
This is largely a video about the dangers of social media, but at the same time, these problems have existed in the car world long before the rise of social media. Resisting and rejecting them is one of the key theses of Slow Car Fast — that your passion should be about what you enjoy rather than what conventional wisdom dictates. I would love to write more about this later. Perhaps the topic for another essay one day.
Ask A Millennial! Alan Gomez, 33
The impromptu, local cars and coffee car meet has become the de facto high-profile automotive event of the COVID-19 era. They’re quick, cool, and you have to be in to know where and when they’ll appear. In my hometown of Long Beach, that means Commodity for the All Makes Welcome meet. It has a perfect name and an excellent roster of participants. In January, I brought my friend and the editor of Slow Car Fast there to show her first-hand how car culture is changing and evolving. She loved it. I spoke with Commodity owner Alan Gomez about the influence of the show and his plans for the future. Here is an edited version of our conversation:
We want everyone to come and hang out. We started with just German cars and it’s pretty cool but after a while it’s just our same 10 friends that show up. All Makes was wanting to see all sorts of variety in cars, and all the weird stuff people have in their garages.
There could be super raced-out Honda CRX right next to a Ferrari, or an E30 next to a Land Cruiser, and they get equal attention. One time a guy brought a Bug that was faster than anything else here. It’s fun to see what people build.
I just like that people show up and want to hang out. In the car world, people already have a common denominator. Whether you have an Integra or a Westfalia, there’s a built-in, “Let me see your car.” It’s great for people who are socially awkward. If you don’t know what to talk about, just talk about the cars. “Ooh, these are cool wheels,” right? It’s an easy way to come out of your shell.
Social media helps a lot. Back in the day your business depended on location. Now people like to go out of the way, they want to be seen at the place that’s hard to get to. This is the meet that’s out of the way for a lot of people but it’s picked up enough momentum that it’s not all the way down in Orange County or up in L.A. It’s a really fun one — but I’m biased.
Auction Block
The title of Most Expensive Rally Car now belongs to a 1988 Audi Sport Quattro S1, sold at auction for the US equivalent of $2.44 million. The legend of Audi Quattro during this period is well-known among enthusiasts. Still, an astounding figure.
Speaking of the golden era of rally racing, the automotive clothing line Period Correct, featured throughout Slow Car Fast, released a new line of diecast cars with Hot Wheels that honors the Ford RS200, Lancia 037 and other champs of the era.
On Your Radar
Word is that the Pebble Beach Concours d’Elegance and associated car shows and events is back on and scheduled for the weekend of August 15. We’ll continue to monitor and report back when possible.
And Finally…
The running facade that Matthew McConaughey is incredibly passionate about Lincoln will never not be funny.
Drive hard and be safe. Black Lives Matter.
Want your event included? Shoot me a note with subject line “Race Day” at ryan@carrarabooks.com.
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