Auto Aftermarket Spending in U.S. Zooms, Study Says

American motorists spent almost $20 billion last year to improve the appearance, power and performance of the vehicles that inhabit their garages, a new study reports.

Fueled in part by a growing number of new enthusiasts whose loyalties lie with imported cars, the boom in so-called specialty automotive aftermarket spending has outpaced inflation for most of the last decade.

Retail sales have increased an average of 8% a year, according to the study, to be issued today by the Specialty Equipment Market Assn. at its annual convention. During the same period, the nation’s gross domestic product, a key measure of economic output, rose 2.36% a year.

Such healthy growth is particularly good news in Southern California, where the specialty auto equipment market is centered and where strong sales of import autos among buyers ages 16 to 35 has helped foster a new aftermarket segment catering to such owners, the study found.

“We haven’t had a wave of new people coming into our market for almost 30 years, so this is really hot,” said Charles Blum, SEMA’s president.

SEMA based its findings on several sources, including the association’s survey of 10,000 registered vehicle owners as well as data supplied by member companies.

The Diamond Bar-based trade group said that 52% of retail spending on cars and trucks in 1997 was for products that enhance or change appearance or improve upon the creature comforts provided by the factory. This category includes everything from decals, seat covers and higher-priced carwash liquids and waxes to body moldings and sunroofs.

Sales of racing and performance equipment, once the backbone of the specialty aftermarket but weakened in recent years by stricter safety and emissions rules, accounted for just 23% of the total. Purchases of custom wheels, tires and suspension products took care of the remaining 25% of sales, the SEMA report said.

Manufacturers of appearance and performance products abound in the Los Angeles Basin, where the hot-rod and custom-car crazes originated.

“It’s a Southern California phenomenon,” said Dick Wells, vice president of SEMA.

A demographic study in the SEMA report helps explain the aftermarket’s continuing strength. Today’s enthusiasts typically have more college education and thus tend to be more affluent than the population as a whole.

Almost 75% of automotive specialty product consumers have household incomes of $35,000 or more, in contrast to 42.4% of U.S. households overall, SEMA found. And 71% of aftermarket consumers have at least some college education versus 41% of adults nationally.

Automotive specialty product spending hit $6.85 billion at the manufacturer level and was increased by packaging, marketing and handling costs to $19.3 billion at the retail level, according to SEMA. That’s an increase of 72.5% since 1989, a decade in which the number of passenger cars and light trucks registered in the U.S. grew by just 14.3% to 201 million.

(The specialty aftermarket segment does not include the much larger market of parts and services that consumers purchase for the repair and maintenance of their vehicles.)

“The big surge has been in accessories for pickup trucks and sport-utility vehicles,” Blum said. “Their popularity has created tremendous new opportunities for specialty parts manufacturers.”

Relatively homogenous styling by the major auto makers has also helped the aftermarket industry, he said.

“The need to be different than our neighbors is basic to human nature,” Blum said, “and that goes for the vehicles we drive as well as the clothes we wear.”