Thread: Health of the aftermarket industry?

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As usual I'm contemplating a couple of future projects I eventually want to get to. I’ve been doing the typical stuff, looking around for part suppliers, checking prices etc.

A lot of the companies that I tend to look at are smaller one or two man operations that are doing specialty parts and services. With the current economy I really wonder how many will still be around when I comes time for me actually start picking up the bits and pieces. I’m starting to see the crunch locally with a few (at this time) of the smaller operations starting to fold and read on the net of a few more doing the same thing.

On the one hand I’m tempted to go ahead and pick up a few thing now or in the near future, but on the other I really not sure I want the parts just sitting around for a few years.

Anybody have any thoughts on this?

I'll respond not as a moderator here but as a small business owner.



It all depends on how the small business is set up and run, if it is run under a low overhead with few employees and little debt, then it has a good chance of riding out the bad economy. If however the owners have not planned for the future, have spent too much money on themselves (flashy cars, flashy watches, expensive vacations, etc) and have mortgaged themselves to the hilt as so many others have, then they will not be able to weather the bad economy. At this point it becomes the fault of the business owner and not the economy.

In my case, I do run lean, was able to see what lay ahead and adjusted not only my business spending habits, but my time management (employees), materials management, and adjusted my shop time (I now close at 5pm instead of 6pm to save a little on utility costs) to assist me in staying ahead of the game. Sure I still stay late if a customer needs me to, but the back of the shop is already shut down, so my overhead savings are still in place...So far it has worked without adversely effecting my business or my employees paychecks. I thank my previous employer for teaching me how to think out of the box and adjust things quickly to be able to survive an economic shakeup.


Bill S.

I agree with you in a lot of respects Bill, the local businesses I have seen fail around here are usually the ones that have buried themselves in payments …..new equipment bought on time at low interest self indulgence etc…..which was good until the business started to fall off.

The outfits I’ve been looking at (and wondering about) lately are the ones that have specialized on a very narrow segment of the market. Specifically the couple of companies like the ones specializing in only 472-500 Caddy parts, Hemi Parts or even custom rear ends. As the economy worsens I can definitely see sales falling off to the point where good business practices or not the doors may have to close.

I personally am looking at prioritizing some parts purchases just in case when I am actually ready to start some of these projects the parts will actually be on hand.

There's considerable merit to what Bill has said. But then it's always been that way. Prepared businesses survive, ill prepared ones go away...........well, unless they play footsie with the politicians.

I think we have a confluence of circumstances. Along with some tightening in the economy, most of the folks in our quadrant of the car hobby are getting up in years. One way it manifests itself is retirement such as recently happened with Total Performance. For others it's health issues or death. Regardless of economic conditions those things will continue, coupled with the customer base shrinking. None of this should be a "light switch" moment, in other words happen all at once, but gradually over time. That ageing thing we've talked about on here for a few years is starting to show. I'm seeing quite a few more nice, stock '30s and '40s cars on the market, often with some version of the "he passed away" story as reason for selling. Those Early Ford V8 club guys by and large are in their late 70s, early 80s. Prices for the nice stuff haven't softened much, if at all, YET, but they aren't moving up either. The more people who get scared about the economic conditions the more we'll see a shrinkage of buyers..........then, watch out.

Our biggest threat though is government. I know........some of you don't want to hear this stuff, and that's why it will be a problem sooner rather than later. Apathy is what politicians thrive on. Read this for one warning sign, there's more like it in our future; http://www.semasan.com/main/main.aspx?id=62515 The massive spending spree the Washington pols continued yesterday to feather the nests of their money donors is going to hit us with some serious inflation in the not too distant future. When the necessities of life go up in cost, hobby stuff gets trimmed from the budget early. The more they force us into over priced and unreliable "alternative energies", the more it will cost for the basic survival items. Then there is the falacy of "global warming", or should I say "climate change". It's scientifically unsound, but through propaganda on their part, and lack of fight on ours, they're winning the battle. Last year our state legislature tried to float a "surcharge" for licensing vehicles that "produced too much CO2". It would have effected some 3/4 of the cars registered in the state. Fortunately, for now, it failed, but came close, and they'll keep at it til they win because they've convinced nearly enough people of the lie.

Have a nice weekend.

Probably not going to go well for some of the small niche type shops, or the one's who have become too specialized... The shops running good now have already got rid of the dead weight on the payroll, cut down on inventory, lowered their debt to a managable level and all the important things already mentioned here.... Having been through the cycles a time or two, as in the past I see the well run businesses surviving and even possibly growing a bit. The ones who don't adjust are gonna go away..... Deja Vu all over again....

Re-reading Bob's post, just one more thought... Analyze and adjust is so true now, and should become the main thought of all businesses.....and be ready for the onset of inflation in the not so distant future.... Make the necessesary purchases now, and don't borrow a nickel you don't absolutely have to have. Surviving the lean times IMO is easier then surviving the "good old days" of double digit inflation!!!!! When everyone gets bit by the money crunch, there's going to be some very, very good deals to be had by the guys with money in the bank (if your bank is still open).....

We have sold our large shop in Elburn and moved the machines back to the shop at home, put them back in original positions and hooked up electric as they were---we are not going to do general vehicle work any more but concentrate on engines and such.
With the masses doing crate engines and not so much custom race engines at this time we are shifting toward doing semi-custom stuff---we have updated our status with several manufactures ( they welcomed our plan) and will be stocking the more generally used stuff instead of procuring core engines, cleaning, machining, cleaning,etc

We will have aftermarket blocks heads cranks in stock or at least the shipping pipeline enroute and customers will have a choice of the sizes, strokes, cc s, cam, etc---
with this approach we solve a HAZMAT disposal problem, have a cleaner shop, etc

Of course, on the other hand, I have been pretty busy welding exhaust system componets---in the past 10 days a twin turbo corvette has left here, did a 3 inch stainless exhaust for 68 gt500 with a stroker 427 to 482 we built, did a set of dual turbo headers for a 434 sbs last night so they could be in a show today and tomorrow and am working up the material order for another 434 efi sbc for 67 Camaro and a set of headers for my wifes 34 ford 3w---and the welding shop wants $34 for a lb of 1/16 308rod

Another thing that will kill a lot of businesses, both small and large, is that they have put all of their eggs in one basket.............only sell one product or service, and when that market drops they are sunk........ie, Microsoft. Kinda like if you made and sold buggy whips back in the 1800's, and then the automobile came along.

The surprising thing about the current economic situation is that not only are Mom and Pops folding, but so are chains that usually can weather these downturns because of their resourses and expertise. Not any more.........more and more companies that we viewed as bulletproof are closing some locations or folding altogether.

Don

One thing that hasn't been discussed much is that the market today is in a state of constant change.

Building styles have always come and gone, but the mainstream was constant. Billet cars.... resto rods.... Pro Street.... rat rods/old skool/vintage rods (pick your term.....and if you are into bikes, it is the same. What I find different is the recent changes are more "market wide" than I remember...and the changes are coming closer together.

I am sure that the television programs, and their massive influence are part of this. They attract soft-core enthusiasts who do not have the passion to stay long term, then when they get out, it turns the markets upside down. Auction coverage also has had the hobby in a "buzz", so those who need to justify their project financially, will change to follow the more profitable trends

Recently, the newcomers to the hobby, who cannot afford to build at the level of the established standard....or believe that the past is somehow "the way it was meant to be", and anyone who does not embrace their philosophy is simply wrong.....has led to a large social pressure for change. Some guys still do what they like, but have to face harsh criticism. Most seem to follow the herd, so segments shrink, and others feel they need to follow the "trend-of-the week".

Bottom line is that in the past, if you were a mainstream business, there was always a solid base. Now it seems that major segments come and go in a much shorter period of time. I say "diversify...diversify...diversify!" I have had to change the focus of my business about every three years, just to keep work in the shop. At least for now, that is my advise.

[QUOTE=HOTRODPAINT;342104]One thing that hasn't been discussed much is that the market today is in a state of constant change.

Building styles have always come and gone, but the mainstream was constant. Billet cars.... resto rods.... Pro Street.... rat rods/old skool/vintage rods (pick your term.....and if you are into bikes, it is the same. What I find different is the recent changes are more "market wide" than I remember...and the changes are coming closer together.


I predict this is the next coming trend...........maybe some of us should get in on the leading edge and gear up now!! It seems to be a fad that simply won't go away.




Don

Now there is a perfect example of a late model "Conestoga Wagon".

Thanks. I'm going back to the '60s. :-(

Doubt seriously if I'll be buying in to the look of the red car.....don't think I could convince myself the money was worth it...

There's still enough Hot Rodders around, as in the past this round of financial tough times will get rid of the wanna-be's and investor crowd and just leave those of us who are here for the long haul... Shops will follow the same trend, the good one's that are well managed will survive, the one's in it for the quick buck will fold up. Not all bad i guess, a thorough cleansing of the system usually brings the biz back to a steady and progressive path of quality cars put together by quality individuals and shops.... Heck, those of us who survived the 80's are old hands at this tight money stuff....

cheetos? what a car full of IDIOTS

Originally Posted by gassersrule_196

cheetos? what a car full of IDIOTS

No, the car was done on one of the TV shows (maybe whips, I cannot remember) and taken to several west cost car shows for promotional purposes (they gave away free product). Nothing more than a little innovative self promotion by a few executives to tap a market of people that have forgotten about their product. Hell, I started incorporating Cobras into my advertising and during the summer have at least one to drive around in with my business name above the top of the windshield. People do put two and two together and I cannot tell you the amount of times people will come in to the shop telling me "I saw your cobra in the newspaper" then they ask for their free estimate (retention is roughly 48-60%).......In my case I just combined my love for the car into my self promotion. Beats the 2001 Jeep Rubicon (all stock) that my main competition shows up at the local cruises with (with his name plastered all over the thing in purple and green vinyl decals), something about being a little subtle (as subtle as a 427 Sideoiler powered Dark Green Cobra replica can be) about it that really makes it work for me.





Bill S.

"....I'm going back to the '60s......"

I've been accused of never leaving