Where’s My Performance Exhaust?

With summer already in full-swing, it appears many performance enthusiasts are holding onto their wallets a little tighter this year as consumer confidence recedes in the wake of a tough recession. With people holding onto their cars longer — and increasing replacement rates for bolt-on exhaust systems is one result of this trend — performance exhaust is stuck between a rock and a hard place. The market either has to rely on a contingent of loyal customers or deep discretionary pockets oblivious or unaffected by the economic downturn.

While year-to-year sales for performance parts and systems has seen consistent growth since the early-1990s, this year we can expect a slow down in this category as new vehicle sales slump in North America. How did the performance exhaust market get to where it is today and what lies in its future? To answer this we’d have to take a closer look at the factors that affect this product category in the larger scheme of the automotive aftermarket.

If you’re on the hunt for an upgrade to your vehicle’s exhaust system, look no further than the world of performance exhaust parts. Whether you’re seeking enhanced horsepower, a throatier exhaust note, or improved fuel efficiency, performance exhaust components are the key to unlocking your vehicle’s full potential. From high-flow mufflers to stainless steel headers, the options are vast and varied. Dive into the realm of aftermarket exhaust upgrades, and you’ll discover a range of precision-engineered parts designed to optimize your vehicle’s performance.

Challenges in performance exhaust

One glaring truth is that very few independent garages and service centres install custom-fit performance systems. Not because they don’t have the necessary parts, tools or skills to do so; but because the tasks that come with participating in this specialty market will either cost too much or take too much time to complete.

“One of the aspects of [the performance exhaust] is it might require some custom fabrication. If the technician is not prepared to do that then the job would otherwise become a bolt-on exhaust system. The difference here is the installation component,” says Gary Nix, director of marketing for AP Exhaust Products Inc. “Secondly, it’s meeting that customer’s expectation and what that performance is going to be, whether it’s true measurable performance, sound quality, an appearance issue, or something else altogether. It’s a lot about sizing up the customer for exactly what they’re looking for and trying to deliver the right product for that need.”

For consumers, this means any job involving the performance side of the market will fall into the hands of a speciality equipment shop.

Bosal North American Inc. is one of the major players in the OE / aftermarket exhaust systems and parts market. Two years ago, the manufacturer made the decision to get out of the performance exhaust business altogether–although it maintains they still do a small portion of performance in the U.S.

Joe Mercanti, Ontario and Western Canadian regional sales manager for Bosal, started out in their performance exhaust division and goes on to explain what led to the widespread proliferation of performance exhaust products as we know it today.

“Why a lot people went to performance exhaust is because, for one, the regular exhaust business was down. So that gave the muffler shop (or the specialty shop) an alternative,” continues Mercanti. “People would buy a brand new truck right off the lot, bring it to a muffler shop, and say change the exhaust system. They discovered they could create a new market by offering a performance exhaust system.”

For two decades it seemed all parties were satisfied. The muffler and speciality shops offered the parts and labour for people willing to shell out the disposable income to buy them, and in turn consumers could chose from a wide array of parts, systems, and accessories as manufacturers added entire product lines and divisions to meet the demand. Granted it took a while for the performance exhaust market to became over-saturated with products, all the meanwhile the term ‘niche’ quickly became ill-equipped to describe a market amid a growing proliferation of products.

“The market got flooded,” says Mercanti, “You have MagnaFlow which is doing very well because they keep their marketing effort up, then you had Tenneco with their DynoMax brand, which does very well because they kept it separate from Walker. Also, you got Cherry Bomb with Maremont that’s also doing very well. As a manufacturer you’ve got to be able to stand behind your product and say, ‘We’re going to put the resources behind that.’”

Keep in mind that in addition to RD and manufacturing, there are also costs associated with advertising, packaging, and branding materials, marketing which is usually bolder, flashier, and oftentimes more expensive to produce.

Because performance items are discretionary rather than necessary, expensive products in the specialty equipment market will ebb and flow depending on the current state of the economy. This makes performance exhaust particularly vulnerable to sudden downturns.

“There is a direct correlation between performance and new vehicle sales. One popular trend was that someone would buy a 2009 Ford pickup and have a performance exhaust system placed on it,” continues Gary Nix, “Now when you go from 15-16 million cars being sold to 9-10 million, all of the sudden what you’ve done is you’ve got a whole lot less of these new cars showing up at the shop to be souped-up. It’s not just somebody bringing in their old pickup to have a performance exhaust put on it. A lot of that business is brand new vehicles.

“I think certainly for those manufacturers where most of their business is in performance I think they’ve seen some pretty significant declines. People have other things to spend their money on other than a muffler and it’s pretty evident in tough times people are going to spend their money on their needs not their wants.”

Finding new markets with new products, fuel economy

For manufacturers that offer a general service line of products where performance is a smaller component will likely not see significant swings in terms of volume. However, for companies that deal primarily with performance exhaust products will likely experience changes in not only what they sell but who they sell to.

Some manufacturers have been looking abroad for potential new markets for their products. Jones Exhaust Systems, for instance, has been liaising with the U.S. Commerce in an effort to increase their market internationally. Since November they’re currently in talks with possible new accounts in Poland, the Netherlands, Panama and Saudi Arabia. “We saw that the potential for overseas customers to buy our products and a quality that they believe is excellent. So we said to ourselves we need to do more than just the AAPEX or the SEMA show to try to reach these people. We’ve even got trips set up to meet with the top warehouse distributors in those countries,” says Jim Cartwright, national sales manager for Jones Exhaust Systems, Inc.

Many manufacturers here at home believe that it’s possible for the general service technician to compete in performance exhaust market without adding to their time or their costs. Cherry Bomb, the performance division of Maremont, is undergoing an effort in rebranding its catalytic converter line and will also be launching a new accessory program underneath the Cherry Bomb label.

“I encourage the general repair shop that may not have gotten into performance to promote the fact that it’s available through the manufacturer, and to not be cautious about it because the systems that Cherry Bomb offers are very much direct fit and very easy to install, where you don’t have to have that pipe bender or other specialized equipment,” says Jim Fox, national sales manager for Maremont Canada. “If people see you and the fact that you can do performance exhaust, then they assume regular exhaust must be easy for you.”

So what can we expect in the near future? Not surprisingly as more dealerships are being given their pink slips and consumers hold onto their cars longer, we’ll likely see higher replacement rates for one-piece exhaust system, which bodes well for the repair centre technician. However, according to a recent report in the June issue of SEMA News Magazine we could see new opportunities in the used vehicle market as greater percentages of performance enthusiasts purchase upgrade products for their aging vehicles,
which include air intake and exhaust. Also expect to see the sales for tuners, programmers and chips go strong in the summer months from such manufacturers as enthusiasts look for easy, inexpensive ways to save on fuel economy.

“People are listening to the fuel economy message more than ever. Because there can be some significant fuel savings by improving the flow of your exhaust system,” continues Fox. “You see people not buying that new vehicle but they may be willing to spend more on the old vehicle to improve it. I guess there’s some caution, but from what I’ve seen there’s still a lot of opportunity still happening with [performance exhaust].”

SSGM