Accessories Influence New-Car Sales

SEMA News—April 2011

Vehicle Dealers Support Study Findings

By Steve Campbell

    Aftermarket products influence well over a million new-vehicle sales each year, according to a new SEMA/AutoPacific survey and report entitled “Influence of Accessories on New-Vehicle Sales”
The most basic premise of a new SEMA/AutoPacific survey and a report entitled “Influence of Accessories on New-VehicleSales” is that accessories help sell new vehicles.
     
     

Aftermarket products influence well over a million new-vehicle sales each year, according to a new SEMA/AutoPacific survey and report entitled “Influence of Accessories on New-Vehicle Sales” (now available free to SEMA members and for $199 to non-members here). We talked about the findings with industry professionals in the March issue of SEMA News. In this issue, we’ll take a closer look at some of the other data included in the report from the perspective of new-car dealerships and their strategies regarding accessorization.

All of the dealership sources we contacted agreed with the report’s most basic premise: Accessories help sell new vehicles. The study provides information about the effects customized vehicles can have on the decision-making process of new-vehicle buyers. It looks at those effects on an array of different consumers, including those who do not normally modify their cars or trucks, as well as those who do, and those who are most ardent about customization.

“We do quite a bit of accessorizing on our in-stock vehicles,” said Terry Miller, general sales manager of Galpin Ford in Van Nuys, California. “Before reading the report, I thought that most people got their information from magazines or shows, things like that. But the study demonstrates that new-car buyers often go online to look at a vehicle on display in a showroom. They either buy that car or buy the accessories that were on the car. After reading the report, I thought I should take another look at what we have in inventory and possibly select more models for customization—or, as we call it, Galpinization.”

     
   
     
     

Finding new ways to sell product—whether cars or accessories—has become a paramount concern for the industry over the past few years. The study clearly reflects the economic slump that took hold in 2007 and created a downward trend in accessorization among new-car buyers. In fact, the study says, the percentage of people who planned to modify their vehicles dropped nationally from about 23% in 2007 to about 14% in 2010. Steve McCord, general manager of Galpin Auto Sports, the accessories store affiliated with Galpin Ford, said that while the number of customizers among Galpin’s customers is higher than the average reported in the study, it’s probably because of demographic differences.

“The ‘Key Findings’ segment of the report showed that 14% of new-car buyers accessorize their vehicles, but differences in regions could change those percentages quite a bit,” McCord said. “In Southern California, you see vehicles that have been accessorized or modified to some degree every day. At Galpin Ford, we accessorize about 15% of our new-car inventory and show those vehicles prominently in our display areas. Those vehicles allow us to offer accessories to non-modifiers who otherwise might not consider an accessory because they don’t know the option is available.”

     
    Most consumers are comfortable purchasing products complete and ready to drive away from the dealership, and the report shows that customer satisfaction is slightly higher among vehicle modifiers than non-modifiers.
The information contained in the report is valuable not only to the sales department but also to service staff. It includes a wealth of data on accessory influence among consumers who are enthusiastic about modifications as well as those who choose not to personalize their vehicles. Courtesy of Vogue Tyre and Rubber Co.
     
     

Jim Kemp, general sales manager of Metropolitan Cadillac and Saab in Milwaukee, Wisconsin, said that a lot of the information contained in the report is valuable not only to the sales department, but also to service staff.

“A lot of statistics went into the study,” Kemp said, “and it shows that customers definitely like to do business with somebody they know and trust, and they also like to see the product on the car. People may see a product on the road, but they don’t realize that it’s available for their vehicle, so you need to have the products that you’re trying to promote on a car for display. The report makes people more aware that sales and service need to work as a team.”

McCord agreed, pointing out that communication between departments is crucial.

“The report shows that keeping our sales and service departments informed on accessorizing trends in our sales meetings is one area of opportunity,” he said. “We do a pretty good job of letting our departments know what’s hot and what’s not in the accessorizing world, but I know we could do better.”

Steve Hofer, parts and service director of Park Chrysler Jeep in Burnsville, Minnesota, said that the report gave him new insight about the importance of customization on new-vehicle sales.

“I keep coming back to the idea that 9% of people were influenced in their car purchases based on the vehicle being accessorized,” he said. “That was news to me. I was under the assumption that I needed to display accessories for the customer to see and to feel good about an accessory purchase. I’ve never really looked at it from the standpoint that the accessories themselves can influence the vehicle purchase.”

     
   

Question: Did the availability of parts for the (insert vehicle name) influence you to buy that vehicle versus a different vehicle?
Source: AutoPacific Authoritative Automotive Research & Insight
     
     

Randy Baker, managing partner of Batchelor Cadillac in San Antonio, Texas, said that his dealership uses a “show book” filled with photographs of customized vehicles to help customers visualize the accessories they may wish to include with their purchase. Even so, the report’s conclusion that display vehicles are the best accessory sales tools has him rethinking a catalog that the dealership just produced.

“The study shows that the vast majority of accessory sales in a dealership were because people saw them on the vehicle,” he said. “People come in and see something that will freshen up their cars even if they’re two years old. When we weren’t as active at selling accessories, people would come back a month after we sold them a car, and they had installed aftermarket tires and wheels on it. We had missed an opportunity to sell the accessory. Even worse, they sometimes didn’t buy a product that was right for the car.”

Supplying accessories that are properly designed and fitted for a specific make and model is obviously a major concern for new-car dealerships and has caused some original-equipment manufacturers (OEM) to question the quality of specialty-equipment products.

“The OEM position is that their products are engineered and built for that specific vehicle,” Baker said. “They are very concerned with performance and liability, while customers are moved by emotion and aspiration. That’s why warranty issues are so important. We put on quality products, and we don’t go overboard with anything. We want to sell only products that the customer will have a good experience with, and our warranty is for the life of the car. As long as the customer owns the vehicle, we take care of the accessories.”

Hofer said that the report will help his dealership and his parts department focus their efforts on the most popular accessories and modifications, allowing the organization to target its energies on accessory segments that sell and avoiding those that do not. He said that doing so will not only help the bottom line, but will also keep the new-car sales staff involved and motivated as they see success more quickly.

     
   
     
     

“Body modifications are something in the report that I probably don’t do as good job at as I might,” he said. “It’s a segment that I haven’t been paying as much attention to as I should. We do a good job with wheels and tires and audio systems, which the report puts near the top of the most popular modifications, but the body statistics surprised me.”

McCord said that Galpin would also use the trends shown in the report to help its various departments determine which products to carry and, therefore, those most likely to produce satisfied customers. Most consumers are comfortable purchasing products complete and ready to drive away from the dealership, he said, and the report shows that customer satisfaction is slightly higher among vehicle modifiers than non-modifiers.

“Hot items, such as audio, video and wheels and tires, are areas of opportunity,” he explained. “If we stay on top of statistics and trends, we can help control our inventory.”

Hofer said that he intends to use the report as a training aid for his staff, especially in new-product selection. He believes that the data will help him pinpoint commodities using factual information and real-world numbers.

     
    Most consumers are comfortable purchasing products complete and ready to drive away from the dealership, and the report shows that customer satisfaction is slightly higher among vehicle modifiers than non-modifiers
Most consumers are comfortable purchasing products complete and ready to drive away from the dealership, and the report shows that customer satisfaction is slightly higher among vehicle modifiers than non-modifiers.
     
     

“The report leads me to look at some of our accessory categories differently,” he said. “There is a lot of information that will help alleviate some stereotypes and misconceptions that I had about accessories. Customization increases people’s pride in their vehicles, which motivates them to share their excitement.”

Baker said that the enthusiasm generated by accessorized cars brings additional buyers into his dealership in San Antonio. Batchelor Cadillac receives business specifically because people see a neighbor’s or an associate’s car and want something similar or even more personalized. He said that he plans to share the information contained in the report with his key managers to reinforce their efforts. Hofer said that the physical layout of the report adds to its value as a training tool.

“I like all the facts, but I’m a visual person, so I also liked the way the facts were laid out,” said Hofer. “The report will help us target our marketing to groups of people who may want to accessorize their vehicles. From my perspective, proper accessorization can help build brand awareness.”

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