Now Remodeling
It’s been a crazy few weeks on Machine Drive, where the flow of exotic-looking cars and trucks has been endless and the sharp tang of fiberglass resin prickles the sinuses.
It’s time for the world’s largest trade show for companies that sell performance and customizing accessories for automobiles. And, as usual, many of the vehicles on display at the Specialty Equipment Market Assn. show in Las Vegas this week were first sent to Huntington Beach to get their final customizing touches at Pacific Auto/Truck Accessories Inc.
The 19-year-old company, tucked away in an industrial complex just west of the giant Boeing Co. Space Division, is one of the nation’s premier designers and manufacturers of what the industry calls ground effects--wraparound plastic or fiberglass parts that are added to the lower portion of stock vehicles to give them a ground-hugging appearance.
The trade show rush always makes October a hectic month at Pacific. But this year, the frenzied atmosphere has been amplified. Pacific, bouncing back from a slump in the early 1990s, is in the midst of a major expansion.
Riding high on the resurging U.S. economy, Pacific founder and chairman Bob Richards is adding a new facility to make molded plastic parts and is installing a retail showroom. He’s making plans to expand his core wholesale business, which is now concentrated in California and Japan, into a nationwide supplier for auto styling shops. He also is researching the feasibility of opening a chain of retail stores to sell and install Pacific’s ground-effects kits and other products.
Richards said he believes his company must expand on several fronts to increase its visibility. “Now that the economy is improving, I have a reason to grow this company again,” he said. “And it’s making the business fun once more.”
It may sound overly ambitious, but industry watchers say Richards’ strategy is fine, as long as he focuses on compatible areas of the $17-billion worldwide market for performance and customizing parts for cars and light trucks.
A handful of ground-effects makers serve a small niche in the $2.3-billion restyling segment of the so-called aftermarket, industry insiders say. Ground-effects manufacturers generate only about $50 million in sales, said Eric Scharff, chairman of Georgia-based Razzi Corp., the industry’s leader. There are fewer than a dozen ground-effects companies, and half of them are in Southern California.
But there’s a lot of growth potential for companies that can feed consumers’ appetites for goodies that make their cars and trucks stand out from the pack.
Pacific has stayed alive by identifying and adapting to changes in a fickle market where the sleek sports car can be king one day, only to be deposed by lumbering four-wheel-drive trucks the next. Indeed, the company started out as a maker of “T-tops”--removable rooftops--for early Toyota Celicas.
Often, Pacific is forced to change after major car makers see a popular aftermarket product and start offering it themselves. Pacific no longer makes T-tops for that reason.
Other ground-effects makers have suffered by being too slow to change, said John Rettie, a Santa Barbara-based industry consultant. “Usually, one company would latch onto a segment, like small Asian imports, and do well until that segment slowed, then there’d be another company that would rise up and take the business in the new segment,” he said. “But Pacific has managed to shift focus and keep going.”
Richards said the privately owned company should do about $7 million in sales this year, up 15% from last year. The target for 1998 is $10 million as Pacific pushes into retail sales and begins marketing its new molded parts for accentuating the otherwise mundane lines of a vehicle’s wheel wells.
Richards also expects to boost employment by about 25% over the next year, adding 20 or so new workers to his current payroll of 75.
Pacific soared through its first dozen years, as Richards quickly shifted from his initial product into rear spoilers, ground-effects parts and special suspension products for lowering cars and trucks. “I saw there was a market there, and I tried to fill it,” he said of his decision to begin designing and manufacturing ground-effects kits.
The lower body skirts, which close the gap between the road and the bottom edge of the vehicle’s body, are considered appearance items with little practical function. They were adapted from the auto racing world, where ground effects are a critical performance item that increase speed and stability.
In the early 1980s, Pacific was one of the few ground-effects makers that packaged its parts into kits, which were sold wholesale to customizing shops that handled the installation.
Richards added his own installation shop in Huntington Beach after being approached by local new car dealers who discovered there was a profit in displaying and selling cars already customized with spoilers, glass roofs, front air dams, side skirts and other ground-effects parts.
Pacific also branched into selling and installing other manufacturers’ custom tires and wheels, custom interiors and electronic gadgetry ranging from security systems and fancy stereos to liquid crystal television sets that hide between the seats or flip down from overhead consoles.
Richards was an early convert to the sport-utility markets, falling in love in the early 1990s with General Motors Corp.’s king-sized Suburban. He developed a special line of products to spruce them up and boosted the huge vehicle’s already impressive load-hauling capacity by putting a pair of wheels--”dualies”--on each side in the rear.
He also designed and patented a system for the Suburban that does away with exposed running board steps, increasing the visual appeal of the vehicle and blocking out the snow, ice, mud and water than can make an exposed step dangerous to use.
This Smart Step system now is available for most pickups and sport-utility vehicles.
Pacific sells the concealed step system to several companies that convert stock passenger vans into campers. It also is talking with one of the “Big Three” domestic auto makers about adding the Smart Step as a factory-installed option on its trucks and sport-utility vehicles.
At its peak in 1991, the company was doing $10 million a year in sales and had 140 employees. From 1992 to 1995, though, Pacific was a shrinking business, falling to a low of about 50 workers and $5 million in revenue in 1995.
“Bob has a tremendous handle on the Southern California market and he really knows what sells in the West, but for a while there he didn’t focus his efforts very well,” said Razzi chairman Scharff.
Pacific has pulled out of its slide now, Scharff said, “and could easily dominate the smaller players.”
Richards blames Pacific’s slump, in part, on a national economy that was gripped by recession. Competitors, especially the small customizing shops in Southern California, started slashing prices and Pacific wasn’t able or willing to match them.
The company also suffered because its market was so geographically limited--a factor that is pushing Pacific’s expansion.
One of the things that kept Pacific going was its Japanese business, which began almost as soon as Richards left Mazda Motors, where he was a marketing executive, and started the company.
Richards’ removable tops for the popular Chevrolet Camaros and Pontiac Firebirds of the 1980s coincided with a hot Japanese market for the cars. Camaros and Firebirds were shipped to Japan in large numbers in the early 1980s by a cadre of auto exporters in Southern California. “It gave us some name recognition and a reputation that stuck,” he said. As a result, he said, Pacific now does 24% of its business in Japan.
Pacific hasn’t done much marketing, relying--as many small automotive businesses do--on word of mouth.
But that’s about to change, as the company expands its wholesale and retail businesses.
“We’re going to go into advertising in the trade and auto enthusiast magazines in a big way,” said Richards. His initial advertising budget for next year is “in the low six figures,” almost five times what he has spent in past years, Richards said.
“You’ve got to have the products people want, but you’ve got to get the word out too,” he said. “We saw that when sales slowed a while ago.”
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Pacific Auto/Truck Accessories
* Headquarters: Huntington Beach
* Founded: 1978
* Owner/president: Bob Richards
* Business: Designs, manufactures and installs automotive accessories including moon roofs, ground effects, electronics, wheels and spoilers
* Estimated 1997 sales:
$7 million
* Employees: 75
Source: Pacific Auto/Truck Accessories
