Market Feature: Pocket Rocket Science – the New Performance Market

For those who may have looked askance at the sport compact performance market, thinking it was not a good fit for a traditional business, it may be time to take a second look.

“I’d say the market has matured to the point where the majority of the warehouses that have been focusing on the traditional performance market have become enlightened to the sport compact market,” says Mike Goodwin, marketing manager for Karbelt Speed & Custom. “And the manufacturers in the sector have matured to the point where they realize that three-step distribution is important,” he adds. It is no longer necessary to go direct to the manufacturers just to get the latest hot items.

“Now he can bring a few items in from the traditional warehouse, who he has an account with.”

While the early days of the sport compact market have their genesis in the individual tuner, fabricating parts for his own needs, the popularity of the market has risen with the involvement of the automakers.

“A lot of it is driven by the factories too. You have GM, Ford, and Mopar spending big dollars supporting these programs,” says Goodwin, adding that it echoes the muscle car performance days.

“It’s sort of a rebirth of the muscle car for the new generation. They’re marketing toward the same age group they did 30 years ago.”

Barry Trap, owner of Performance Unlimited in London, Ont., is one of that generation, but has seen the new performance market as an opportunity for his otherwise traditional performance business. How traditional? There’s a ’72 Nova drag car on his business card.

“I guess I should change that,” he laughs, but he has nonetheless been able to build the sport compact business to about 25% of his overall trade.

“The funny thing is that we have been in this business a long time and we see trends come and go. Right now, we’re seeing guys moving away from just the Honda to other cars. It is interesting to watch.” He says, too, that while Internet buying and cross-border shopping remain an issue, there has been more progress through the traditional avenues. “We are going to see more and more of the manufacturers who are now selling direct [to the consumer] needing to get their products into more hands and more markets. The cream will rise to the top. We are already seeing that.”

With all this talk of a maturing market, it is hard to ignore the fact that it is still attracting new players, from the traditional performance segment, like Edelbrock and Hedman, as well as the traditional replacement side, like Fenwick Automotive Products.

“We’ve always had heavy-duty variations on many of our product lines,” says Joel Fenwick, “but this is the first time we are targeting the sport compact market.” Fenwick says that the popularity of the vehicle population and the tuner market has prompted the move.

“There’s definitely a market there and we have the knowledge and the technology so we can service a bit of that market and bring those parts to the traditional versus the pure performance side.” He says this puts them into a somewhat unique position as a traditional aftermarket supplier.

“We’re not known as a performance company, but we do have the knowledge history and technology to make these types of parts. We have already tested them on the road and on the strip, so they’re already proven.”

The company has weighed in with four lines in what it terms its Street Legal brand: clutches, CV shafts, flywheels, and brake calipers. Of these, only the yellow and red semi-loaded brake calipers lack true performance enhancements. “They are less about performance and more about the look. There are more people who want to keep their stock rotors, rather than change their rotors and calipers to an upgrade system.” The other parts in the line, including clutches, flywheels and CV shafts, are all designed to take increased loads from the drivetrain.

“The clutches are the real deal. There are two options–organic and ceramic–though not in every application. The organic has a very high burst strength, high friction. The ceramics are great for the racer; shifting is more like flipping a light switch. It’s not for everybody, but for people who are really performance minded, it’s a great part.”

The parts have a host of design enhancements to make them able to accommodate the several hundred horsepower that is becoming more common among the tuners.

Fenwick says that they have worked hard to keep stocking requirements down, by making all parts ABS-compatible on applications where there have been ABS and non-ABS applications, for example. This avoids unnecessary duplication of part numbers.

“We look at the market as a niche product for this company. I think it will help us be recognized not only as a quality remanufacturer, but a company that also has an edge to it.”

In fact, it was interest from the distribution chain which prompted the move. It is a fact that comes as little surprise to veteran performance personality Steve Bolio.

Bolio, a partner in manufacturers’ agent Scafidi-Bolio and Associates, and a member of the board of directors of the Specialty Equipment Market Association (SEMA), has seen trends rise and fall in both the cars of choice and the methods of going to market.

“The thing that people don’t understand about it, the old traditionalists, is that it really isn’t a fad and it actually never was. It just took a while to get to the East Coast and other areas. Toronto was probably one of the very first in the east to get into it.”

It is, he says, really a natural evolution.

“It’s a combination of the market maturing and of it being accepted. I would venture to say it is bigger in terms of dollars than SEMA was in total 20 years ago.”

He says that many of the traditional performance WDs have stepped up their participation in the sport compact market in terms of lines, and have also tailored programs to the commitment that many jobbers are able to make. In addition, he says, manufacturers are coming around to the logic of traditional distribution.

“There was a lot of direct selling in the early days, and they had to be educated. And actually my company has spent a lot of time educating them.” In response, many companies have embraced the needs of the aftermarket in terms of both education and in the way they design products.

“There are a lot of pretty universal parts available now,” says Bolio, who says that the myriad of application-specific parts should and can be handled on a special-order basis. Learning before you leap is good advice, he says.

“I think that [jobbers] have to talk to the right people, to get somebody who knows the business and is not just trying to sell something. I think those people are available to help them.”

One thing that is important to learn, says Walt Moore, sales manager, Keystone Auto-motive Operations of Canada, is that having product on hand is as important as it always was.

“A customer still wants to touch, smell, and feel before he spends the money. The fact that the jobber or retailer can bring the product in and have the customer see it is a real plus.” Beyond stocking, he says that the comfort level that staff members have with the product category, as well as the comfort level the customer has with staff, are keys to success.

“The hardest thing is when a fellow has been in business for a number of years and everybody looks at him as a motorhead from yesterday. It all comes back to awareness, and people being comfortable selling the product.

“Any time they can pick up the phone and ask the question it helps. Most distributors try to provide that resource. There has been a real strong push by the manufacturer to make sure they have the knowledge.

“The more comfortable [your staff] are with the product lines, the more they will promote it. You can see it in the numbers.”

“The maturity is clear and evident due to the significant investment by performance aftermarket distributors,” says Albert Reda, sales manager, Vibrant Performance. “Robert Thibert, Karbelt, Mopac, Keystone–these are legitimate and established parts distributors. That shows you how this market
has evolved from just having local distributors. It is serious dollars now.”

The focus of the hook in advertising and marketing has also changed, says Reda, further evidence of a shift in the market.

“You’re seeing companies investing in advertising and product development, but also investing in the education of the jobber, trying to ensure that accurate information is being communicated. Also, the advertising has changed from featuring attractive models to an approach that is about legitimate performance. The most successful magazine is the one that focuses on the real performance gains.

“It’s about the product, not about the image of the product.”

For most jobbers, whose bread and butter is the superior knowledge their staff can bring to the equation, that should be music to their ears (even if sometimes they’re too old to know the name of the band playing).