By Kevin Smith, San Gabriel Valley Tribune
Southern California’s car culture is big business, and the Specialty Equipment Market Association in Diamond Bar helps drive that business both here in the U.S. and across the globe.
Want to see ground zero for the aftermarket automotive products industry? Head out to Las Vegas next month and you’ll see more than you could ever imagine.
SEMA is gearing up to host its annual trade show Nov. 5-8 at the Las Vegas Convention Center. The event will showcase the latest in aftermarket performance auto products, ranging from brake discs and catalytic converters to gearboxes and oxygen sensor components.
The event isn’t open to the public but it’s still expected to draw 120,000 people, including buyers, distributors, media representatives and a host of other industry professionals.
“It’s the largest annual gathering of small businesses in the United States,” said Peter MacGillivray, SEMA’s vice president of events and communications. “We’re running on adrenaline right now. We work throughout the year to put on this blockbuster event. We have a comprehensive international relations program to help U.S. manufacturers connect with buyers in the most relevant markets.”
MacGillvray said SEMA serves as both an advocate and steward of the industry.
“We share a lot with other trade associations and do research and education,” he said. “We also act as a liaison with state and federal officials on behalf of the equipment industry. That includes businesses that are involved in the manufacture, distribution and marketing of automotive products that enhance the styling and performance of cars, trucks and sport utility vehicles.”
The aftermarket industry is divided into two categories: One segment involves repair and replacement and other is the specialty end that focuses on high-performance products.
High-performance aftermarket product sales generate about $31 billion a year in revenue, according to MacGillvray. And that segment accounts for just 10 percent of overall automotive product sales.
“The total sales get into hundreds of billions of dollars,” he said.
Jeff Latimer, who manages JGM Performance Engineering in Valencia, attended last year’s SEMA show. JGM does everything from replacing stock parts like broken belts or dented bumpers to customizing auto and boat engines with high-performance upgrades.
“Last year I was at the SEMA show for the entire week because the racing team I’m on had a car on display in the NASCAR booth,” he said. “The car wasn’t affiliated with our business, but we did do the engine work.”
Latimer said the aftermarket industry has changed in the last 10 to 15 years as more and more consumers have turned to the Internet for automotive products.
“Customers used to rely on your expertise, but now they tell you what they want and how they want it,” he said. “They are more opinionated.”
For many consumers, the bottom line is money. But Latimer said there’s a big difference between buying a stock “crate engine” that literally comes in a crate and one his business has hand-assembled.
“We look at the blueprints,” he said. “Everything is checked and all of the machining is done with a higher degree of accuracy. It will cost more money to do that, but most of my customers are willing to pay the extra money. I have 65 to 100 work orders open at any given time. We’re so busy I have turn work away.”
Mike Hymes, who works at Rydell Chevrolet in Northridge, is also a member of the Vintage Corvettes of Southern California car club. The club meets the first Saturday of every month at the dealership. Needless to say, many of the club’s members have purchased aftermarket parts to customize their vehicles.
“Damn right,” the 75-year-old Northridge resident said. “It’s really important. I bought 22 Corvettes over the past 30 years and I have a red 2003 Corvette now that’s been redone. I put new wheels on it and a new top. A lot of people are changing out the black wheels for chrome ones and they also change out the mufflers. The specialty market is really important.”
SEMA, which is celebrating its 50th anniversary this year, began “when bunch of guys in the performance industry got together and started it back in 1963,” according to MacGillivray.
“It was originally in Los Angeles, but we’ve been here in Diamond Bar for close to 20 years,” he said. “We’re active in business development events in emerging automotive markets like China and the Middle East. When we look at market potential we look for a strong or growing middle class. This is where our collaboration with lawmakers comes into play because they have ID’d this as an important employment source.”
MacGillivray said SEMA sees growing opportunities in China, the Middle East and Brazil, among other locations.
“We are putting together a business event for the first time in Russia that we’ll have in the spring,” he said. “Most of our activity is geared toward expanding U.S. markets.”
The organization’s Diamond Bar headquarters also features a SEMA Garage that functions as a product development center.
“Aftermarket companies can learn about new products and also get access to vehicles they otherwise wouldn’t have access to,” MacGillivray said. “If GM introduced a new pickup truck, for example, these companies would be excited about creating new products for those vehicles. We’ve learned that new car and truck buyers are most likely to outfit their vehicles with new products within 90 days of their purchase. We help connect the dots and expedite that process.”