The car industry surges and sags like the real estate market, with sales bobbing u and down with the hearing power and spending willingness of the driving consumer. And, that retail automotive world is more than just new cars driving off of dealership lots across the country. There is an entire collection of businesses supporting the dedicated gearheads of car culture — tuning companies dedicated.
And, as the automotive sales numbers go, so do the collective bottom lines of the companies that make everything from exhaust upgrades, to bling’d rims to auto body paint kits.
Mopar Tunes for Performance
For example, Mopar (the successful auto tuning company partnered with Dodge and SRT to produce enhanced versions of those OEM’s performance models) believes car lovers hold the purse strings tighter when money is tight and car sales dip.
Mopar spokesman Scott Brown said the amount of downturn isn’t always in direct proportion, but, any car market stumble is “certainly felt in the aftermarket as consumers tend to watch spending when there is uncertainty around the economy.”
“There are people out there who spend significant amounts on extreme builds,” Brown explained. “That crowd tends to have disposable income that isn’t as impacted by dips in the economy.”
Related: Complete NAIAS 2015 Coverage
“There are significantly more people out there who do light modding: cold air intakes, cutback exhausts and pump gas tunes . That group tends to prioritize tuning as part of their overall budget, and may be more likely to hold off on modifications until times get better when the economy is slow.”
Brown added that a lot of tuning and related spending is more personality-driven than economy-centric: “Some people just like playing with cars. They get what they can afford at the time and build on as they can to make their vehicles their own.”
Galpin Sounds from Los Angeles
Brandon Boeckmann, General Manager of Galpin Auto Sports in Los Angeles, agreed that any car sales slump touches on his company’s car personalization and upgrading business.
“You still have those who continue to buy cars as well as those who continue to restore or customize their cars, but the volume definitely drops off similarly,” Boeckmann said. “ Somewhat different from the automotive industry when it comes to car sales, the customizing or tuning industry is primarily a ‘want’ type of product, compared to a “need” like buying a car could be.”
“Those who enhance their cars come from all walks of life, effected by the slowdown in the economy or not. However there are those who are fanatical about customizing and cars who may just take a little extra time between visits to the custom shop.”
Perhaps surprisingly, kits that can transform an old car into a better looking machine don’t sell better when tighter budgets are en vogue — despite the assumption that such a kit would be significantly cheaper to buy and easier way to improve a consumer’s ride.
“I believe (those kits) trend with the economy as well,” Boeckmann said. “Those who are the major car guys who may not have any disposable income at the time would typically want to wait to do it right. However, the DIY tuning kits would be more attractive to the younger audience who may not have the money it may take to do what they want.”
Larte Makes Automotive Art
One company that sells strictly to the luxury market is Larte Design – a Russia-based firm that focuses exclusively on upmarket makes such as Lexus, Mercedes-Benz and Range Rover. CEO Alexey Yanovskiy said his firm focused on more exact numbers to deduce how car sales affect their high end kits.
“The sales numbers are not directly proportional,” Yanovskiy said. “Say if the decline in sales is 50%, than the decline in sales of tuning packages is approximately 30%.”
“The customers with high and stable income remain loyal to customization. It’s not as it was 10 years ago when people were often buying tuning packages for their own used cars. It is because the gap between the launch of new models then was around 8 years. Nowadays, it’s five to six years.”
“Definitely, with the general decline in sales, the tuning industry also has some difficulties,” Yanovskiy added. “Important issue here is that we have to clearly separate luxury, premium and budget segments. Same as in the other fields, the least recession impacted is the luxury segment because the clients are artists, sportsmen, and big businessmen. The budget segment is more sensitive because it’s clients are more burdened with credit payments and other financial challenges.”
Brown at Dodge and Mopar added that, like all businesses, the turning companies need to be (no pun intended) “in tune” with the mood of their consumers.
“The key is to find what you’re good at as a company and what you can do better than anyone else and focus on that.”
Yanovskiy agreed: “Everybody tries to recognize new lines in the design, looking around to the new working projects with the industry leaders. No one can estimate or calculate it. Design is such a tricky issue. Either you get into the trend or you are out of the game. It’s built mainly on intuition.”
