Breathing New Life Into The Exhaust Market

The exhaust aftermarket may have found its stride again. After years of struggling to recover from dramatic declines in sales due to an industry-wide switch to long-life exhaust systems, the replacement market is starting to recover.

“The exhaust market, over the last few years, has been declining,” admits Bill Shutt, product manager for Tenneco Inc., one of the world’s largest manufacturers of exhausts. “But it appears to be levelling out a bit.”

Tenneco manufactures emission control for both the OE market and the aftermarket. Shutt says that as the quality of product has improved at the OE level–including new stainless steel systems–it has negatively affected the replacement market. Consumers who may have at one time needed to replace their exhaust after four years are now keeping the factory- installed system for eight to twelve years or longer.

The challenge, Shutt says, has been to create aftermarket products that draw the broad market customers to the shop for a new system. “What we’re trying to do is figure out what the consumers want, what will catch your eye,” he says. It’s a difficult sell, he adds, since the broad market consumer isn’t necessarily after performance improvement.

Shutt says jobbers and counter staff can point to sound as one of the biggest selling factors. Products are on the market that are designed to give consumers a quiet ride–either at the same level as when they first bought their car or even better.

He also points to the direct fit products as a selling feature for installers. Direct fit products are designed to easily fit onto any vehicle with minimal or no adjustments necessary, thus saving the installer time and money.

“We really take a lot of time making sure that we have a direct fit product,” Shutt says, adding that installers won’t have to tweak any bends and all hangers are in the correct location. “The quicker you can do the job, the more cars you can get through the bay,” he adds.

But Shutt says the biggest sellers are on the performance end of the exhaust aftermarket, where the need for greater horsepower and increased performance drives consumers to buy new systems.

“Consumers definitely respond to performance,” says Jim Fox, national sales manager, Maremont, which has recently relaunched the classic Cherry Bomb performance brand. “It is a want, not a need. Regular exhaust is typically a need. It has to get done. My belief is that for that market, you have to be top of mind, so that when the customer needs it, they already know to go to you.” It is a case of ensuring that the sales job has been done before the need arises, because when it does the decision will be very quick. The trick is capturing the customer before they even know they are one, so to speak.

You do this with the right yellow page ads, the right POS materials, banners, etc. And, while the same type of marketing materials are a great help in the discretionary purchase, the dynamic is very different.

“On the performance side, people will research it.” They’ll look through the Internet, talk to others, read magazines, and then find out who has what they are looking for.

If they already know you have the brand and applications they are looking for, the sale is a natural.

This is something that Daryll Allard, a store manager for NAPA Auto Supply in Winnipeg, Man., has experienced firsthand. Allard says that about two months ago, customers began walking through the door looking for performance exhausts.

“It’s summer and people are getting out their vehicles,” he says, crediting the good weather for consumers’ desire to pump up their vehicle’s performance. “They are looking for more horsepower and better sound.”

Scott Stutler, national sales manager for Dynomax Performance Exhaust, a Tenneco brand, says those are the top two reasons consumers buy performance systems. “The number-one reason is sound, followed by increases in horsepower,” he says, referring to the factors that sway performance- seekers when they shop for a new system.

But some jobbers are finding that consumers are no longer being swayed by performance and are now looking for efficiency as the key to any improvements on their vehicle. With the skyrocketing price of gasoline–and the expectation that prices will only increase during the busy summer driving season–consumers are more likely to spend money on improvements that will save them money in the long run.

“Fuel efficiency is definitely a goal for many customers,” says Rob Burbine, owner of Port Perry Engines & Machine in Port Perry, Ont. With 30 years of experience in the business, Burbine says he has been very successful in helping some vehicle owners achieve that goal, mainly through engine improvements and new mufflers. It is a request that is becoming more common, he says.

Even Allard–who says his clients have yet to mention fuel efficiency as a factor–admits that gasoline costs are going to become an issue as prices continue to increase.

But Brian Barlow, sales manager of high performance products for Lordco in Vancouver, points out that performance and efficiency go hand in hand. “The byproduct of efficiency is horsepower,” he says.

While Barlow knows there are some car hobbyists that are seeking more horsepower no matter what, fuel costs and lower consumption are what will sell to the broader market.

Barlow also suggests recommending an air filter at the same time as a new exhaust system to maximize efficiency.

Although manufacturers are careful to make the claim, a performance exhaust has been known to improve fuel efficiency. While many people associate better performance with higher fuel usage due to the use of more power, Dynomax’s Stutler says that’s not the case. A performance exhaust system contains fewer restrictions; therefore it requires less energy to flow emissions out of the car.

That energy is redirected to help the car perform better. It doesn’t use more energy; it just utilizes it better, he says. “People see performance exhausts as something that’s loud,” he adds. “But it’s not just for muscle car guys.”

Stutler says many vehicles, especially late-model ones, would experience improved fuel efficiency with a performance system. He says he is careful about claiming fuel consumption benefits because it really depends on driving habits, but he does say that the majority of people will see a fuel economy benefit. “They would pay for their purchase in fuel savings after some time.”

“Showing that you do performance exhaust is important for any installer, because consumers will think that if you can do performance, the regular exhaust must be easy for you,” says Fox. The same applies to the jobber store. Fox says you shouldn’t worry about being branded as a “performance guy” only.

“The jobbers are getting more and more DIY retail business,” he says. “And it affects the trade customer when he happens to walk into the store too.” Putting out that POS material reminds the trade customers what you have to sell to them too, and many jobbers recognize this.

“They like the POS and the posters and banners. They want to be able to connect to the website. They are doing whatever they can to show off that they have performance.”

Of course, whether you are focused on the performance market or not, it is critical to be able to fill the orders when you get them. Fox offers that he has seen jobbers have good success in stocking by system, rather than just restricting inventory to the faster movers. “A muffler may be an ‘A’ mover, but the connector may be a ‘C’ or ‘D’ mover, but if you don’t have it, you’ll lose the whole sale. Sometimes it is worth the additional investment to ensure you have all the pieces in stock,” says Fox.

Brian Brockbank, sales manager for catalytic converter manufacturer ACS Ltd., isn’t shy about pushing the environmental message, and the advantages of high-quality products.

Brockbank says the problem with catalytic converters is that they all look t
he same on the outside, but it’s what’s inside that counts: the real difference comes with how many precious metals are inside.

The more precious metals, the better pollution control the catalytic converter offers–thus adding to the price. But Brockbank says the extra cost is justified because the overall result is better.

Vehicles manufactured after 1996 are equipped with On Board Diagnostics (OBD) that monitor how a vehicle is performing. When a vehicle isn’t getting rid of emissions efficiently, a light comes on. But Brockbank says some catalytic converters aren’t efficient enough to keep the light off–frustrating consumers and installers.

“It’s about choosing the right one,” he says. “You can’t physically see the difference, but you have to be aware of which one will offer the right amount of emissions control.”

Brockbank says earlier models can still get away with less expensive catalytic converters, but he hopes the environmental message will inspire people to be as efficient as possible.

“Three years ago it was a very hard sell. But now people are more aware of global warming and are willing to spend a little bit more money to get better efficiency,” he says. “If you approach it that way with your customers–about doing our part for the environment–they will want to spend the extra money.”

As far as specific segments go, Fox says that diesel exhaust continues to exhibit strong growth, as does the exhaust tip market.

“There is some question about the diesel emissions and particulate filters going forward, but the guy who is spending $50K on a pickup is going to spend some good money to put a performance exhaust on. They are getting performance and fuel mileage gains.

“We have seen some pretty significant gains in mileage and people are getting conscious of it. Unfortunately, drivers like to hear the sound of the performance exhaust too much to get the gains right away. But once the honeymoon is over and they ease up on the accelerator, there are some pretty significant gains that can be had from a performance exhaust system,” says Fox.

Fox adds that the exhaust tip market in Canada differs slightly from the U. S. in the preference for stainless steel over chrome, but that the larger tips–as big as six inches in diameter– are still big sellers.

“We are seeing growth in that market. It puts a nice finishing touch on the way a vehicle looks.”

He says that the tip shouldn’t just be restricted to the performance customer.

“A lot of OE style tips add an extra $30 to $40 to the sale and at good margin. People shouldn’t be afraid to offer that when they are going through the process of an exhaust sale.

“There are opportunities there that you just have to ask for.”