The US has 225 million licensed drivers, comprising 85% of all adults. They drive 278.1 million vehicles, consisting of 158.6 million light trucks and 119.5 million passenger cars. The vast majority of the 278 million vehicles are less than 20 years old.
Despite the constant flux in car and truck ownership, the number of cars hitting the road outpaces those entering retirement. This expanding vehicle population offers more opportunity aftermarket—the specialty car equipment industry.
Future trends in specialty car equipment
Over the next few years, passenger car sales are expected to drop. Meanwhile, demand for light trucks is expected to increase as the growth in CUVs is largely at the expense of traditional car sales. By 2025, SEMA projects that light trucks—including pickups, SUVs, CUVs, and vans—will represent 69% of all light vehicles sold. If gas prices and the economy don’t become limiting factors, light truck sales should continue to outpace passenger cars.
While owners can accessorize throughout a car’s lifecycle, most modifiers tend to upgrade their vehicles within the first few months of purchase, whether it’s new or used. However, vehicle preferences are changing—as is this overall landscape. Notably, 27% of drivers purchase specialty equipment parts each year. Plus, 34.9 million households accessorize their vehicles on a yearly basis.
Overall, the specialty car equipment market has been growing about 5% per year. It reached a new high of nearly $45 billion in 2018, and it’s expected to continue unless prevented by a weakening macroeconomy.
Despite the increasing interest in this influential trend, electric vehicles comprise less than 1% of light vehicles on the road. Currently, hybrids are the only alternative to have a notable share of registrations. So, it will take some time to change the landscape of the US light vehicle fleet.
Opportunities exist across vehicle segments
Pickups remain the largest segment for the industry. In addition to being a versatile platform for accessorization, pickups comprise the most common segment on the road. Plus, these vehicles should sell well in the future.
CUVs are an emerging opportunity, with a lot of them on the road and their popularity continuing to increase. We expect CUV owners to accessorize them similar to SUVs.
Despite the growth of CUVs, full-size pickups remain the most common vehicle subtype on the road. In 2018, pickups drove the most sales in the specialty car equipment sector.
Top vehicles for accessorization: Pickups
Based on their opportunity scores, full-size pickups top the overall list. These vehicles offer an ideal platform for accessorization, both in terms of utility enhancement as well as “enthusiastic” additions.
In the full-size pickup category, General Motors (GM) ranks first with 17.6 million vehicles in operation. GM is the fourth major company that left the Plastics Industry Association this year, possibly due to pressuring environmental policies.
However, GM didn’t disclose the reason for not renewing its membership. The company simply unveiled its electric pickup with two BOLT EV batteries. Its Chevrolet E-10 Concept combines vintage style with the futuristic technology needed to achieve zero emissions.
Ford Motor Company’s (F) F-series pickup ranks second, with 15.6 million operating vehicles. Ford recently revealed a one-off electric Mustang during this week’s annual Specialty Equipment Market. This event has witnessed the debuts of numerous futuristic prototypes. With just two weeks until Ford unveils its first mass-market EV, a Mustang-inspired SUV codenamed Mach-E, you can imagine where Ford’s multibillion-dollar investment in electric vehicles could head.
Third place goes to Fiat Chrysler Automobile’s (FCAU) Ram, which just got patriotic with “built to serve” editions that honor the US military. This pickup has 7.6 million operating vehicles on the road.
Fourth place goes to FCAU for the Jeep Wrangler (2.9 million vehicles). The rankings continue with Ford’s Mustang (2.2 million), GM’s Chevrolet Tahoe (4 million), and Camaro (1.3 million). Ranking eighth and ninth are FCAU’s Dodge Challenger (529,000) and GM’s Chevrolet Corvette (814,000). Last but not least is Toyota Motor Corporation’s (TM) Toyota 4Runner with 1.9 million operating vehicles.
Older cars still drive the specialty car equipment sector
However, older cars still represent an important market for the specialty car equipment industry. There are some notable differences within their rankings. Bayerische Motoren Werke Aktiengesellschaft’s (BMWYY) BMW 3 Series, with a long history of model generations, appears on this list. Plus, Chevrolet’s Corvette also appears on that list.
Interestingly, BMW’s new SUV models boosted the company’s net profit. Its net profit increased 11.5% from Q3 2018 to $1.72 billion in the third quarter despite increased spending on electric technology. The fact that revenues increased 7.9% is great news after the company faced considerable disruptions in Q3 2018. New emission policies had impacted costs and distorted its supply chain.
Projected sales are optimistic
GM and Ford’s market dominance in the pickup segment should continue with sales of an additional 12 million trucks by 2026, followed by Ram pickup with 3.7 million. Plus, Toyota’s prospects are improving with Toyota Tacoma (1.7 million) in fourth place. Chevrolet Colorado ranked fifth (1.1 million), and Toyota Tundra (769,000) ranked sixth.
Newer pickups from Toyota tend to get the most attention from accessorizers, especially the mid-size Tacoma. With 3.2 million Tacomas and 2 million Tundras on the road today, a strong market exists for specialty car equipment markets within the Toyota pickup space.
On Tuesday, Toyota announced significant changes in its North America division. These changes include establishing the Manufacturing Project Innovation Center. Plus, the company named new leaders to enable its manufacturing team to better respond to customers’ needs. The Japanese giant plans to invest $13 billion in its US manufacturing plants by 2021.
Ford Ranger (648,000) ranked seventh, and the list also introduces Nissan Motor’s (NSANY) Frontier (506,000). Nissan just unveiled its Ford Ranger Raptor rival, also as a tease for the 2019 SEMA auto exhibition. At the recent Tokyo Motor Show, Nissan executives said the company is working on hybrid technology.
Worksport and future growth
Speaking of hybrids, one of the companies that should benefit from this light truck accessorization trend is Worksport. Owned by Franchise Holdings International (or FNHI), Worksport is among the fastest-growing manufacturers of truck bed covers in the US. The company just won its third US patent for an innovative, affordable truck bed cover system—a monetizable development for the company. The company expects to launch its patented hybrid model later this year.
Worksport launched a new website in its effort to become synonymous with the experience of driving a pickup truck. The new site’s mission is to create a brand-new market for the truck drivers who weren’t satisfied with the available market offerings. Not only did Worksport succeed in creating that segment, but it has also gained quite a perspective for future growth.
Bright future for pickups—even brighter for specialty car equipment
Consumer demand for pickups should continue well in the future, so they should remain highly accessorized platforms. As large and often more expensive vehicles, trucks can be more susceptible to changes in the economy. In the event of a weakening economy, consumers tend to hold on to their older vehicles or switch to more economical options. However, this is even better news for the specialized equipment industry.
If consumers feel confident in the current economic environment, sales of both pickups and their accessories should continue to grow. Either way, we believe that specialty car equipment for light trucks has a bright future ahead!
This article is contributed by IAMNewswire.com. It was written by an independently verified journalist and is not a press release. It should not be construed as investment advice.
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