Awhile back, we broke down the impact that crossovers have on today’s market. You can find that article here. Now we return with the second part of that discussion as it applies to aftermarket professionals looking to cash in on this CUV boom.
Think Outside the Box
Strategy is simple: creativity is key. OEMs are offering more and more accessories and add-on packages every day, so it’s important that the aftermarket remains one step ahead. Hugo Baeza, Executive Director at Romik, is a force to be reckoned with in the tubular market. He makes some keen observations on this developing segment.
First, he advises thinking of the SUV and crossover markets as one entity and not underestimating their potential for profit. “The factories are referring to them differently. Alone, they are still small. But if you combine the two, they have actually overtaken the truck market by a few percentage points.” Secondly, he suggests knowing your customer and understanding their needs. “Accessories for SUVs and crossovers are more than a fashion statement; they are more utilitarian in nature. The bike rack, the roof rack, the snowboard or ski attachments, running boards etc. We must continue to innovate functional items. We’re trying to hit two segments with one product, all while remaining attractive and practical.”
Get on Board with Crossover or Fall Behind
As Nick Geiger, former Category Manager at Keystone, explained in our previous post, these manufacturers have seen success in the crossover segment because of their willingness to change and roll with consumers’ needs. The aftermarket must respond in the same way. And while approaching the SUV/CUV market as a whole is important to understand its impact, so is understanding the differences between the two.
Chuck Wallace, a Keystone sales associate based out of Texas, explains that the larger SUVs will continue to see performance upgrades. Alternately, this growing crossover segment leans heavily toward products that offer increased capability, convenience, and protection. “[Owners] will want to put a hitch on the back … Thule or Yakima roof crossbars on top so they can haul a cargo basket. They [also] haul around a lot of messy kids, so they’ll want some [Husky] floor liners and seat covers, that type of thing.”
Geiger echoes this advice by explaining that “consumers are equipping their rides to deal with the daily grind of toting their children to sporting and schooling events. They’re turning to dependable retailers, restylers, and installers to provide these effective solutions. That includes interior and exterior storage as well as hood protection…[also] products [that] provide drivers with protection from rocks and road debris during a daily commute.”
Manufacturers like Westin, Thule, Yakima, Go Rhino, AVS, Weather Tech, LUND, and even performance leaders like MagnaFlow have responded accordingly. They have increased applications of popular products like bull bars, running boards, side steps, cargo management, exhaust systems, and mufflers. Subtle level kits and complementary overland items also are gaining ground.
Where’s It Headin’?
Ask your Magic 8 Ball for a projection on what this rapidly growing segment will mean for manufacturers, dealerships, consumers, and aftermarket suppliers. There’s a good chance you’ll receive a “Reply hazy try again.” Overall, it seems up to the individual to decide whether the glass is half empty or half full.
The positive forecast seems to say that consumers stand in a great position to benefit from eager and persevering manufacturers. OEMs will be offering some great incentives to get drivers into these vehicles and that should translate into numerous options for varied budgets. And since these vehicles are built to last, retailers, restylers, and installers have an opportunity to not only upsell accessories, but also replacement parts throughout the years.
However, some experts paint a darker picture. They interpret the sales data as a warning that the industry stands in a unsteady position of deterioration. Especially if they can’t absorb the shock of all the vehicles coming off lease in the next few years. Additionally, they ask what happens if gas prices creep back up? Or the cost of raw materials? What if Trump’s Administration starts fiddling with trade policies? And indeed, they have cause for concern.
Although truck and SUV sales continue to rise, they failed to counteract the enduring decline of overall car sales. The Detroit News reports that “overall sales fell 1.6 percent in March compared to a year ago, marking the third straight month of slipping sales as automakers come off a record 2016.” Despite the decline, however, the sales plateau is still high and analysts are hopeful that the influx of new SUV and crossover models will entice customers and keep sales strong.
Do you think crossovers are headed for feast or famine? Give us your feedback in the comments below.