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Auto After Market Sales Continue to Thrive Despite Detroit’s Big Losses

08.08.2008
The American automobile industry is in the midst of a downward spiral that has left big automakers struggling for their very survival.

Last week, General Motors reported a stunning second-quarter loss of $15.5 billion while Ford reported a loss of $8.7 billion. These losses have resulted in sweeping cost cuts, elimination of benefits, reduced production, and other measures in order to boost tenuous cash position. In contrast to this and other downward industry trends, one area of the automotive market appears to be flourishing.

According to the New York Times, the overall United States auto industry is headed for its worst year in more than a decade. Sales so far this year have fallen 10% from 2007, including a 13% decline in the month of July.

General Motors recently announced sweeping cost cuts and other measures to bolster its tenuous cash position. The company plans to increase its liquidity by $15 billion by cutback about 20% reduction in payroll for salaried workers, elimination of health care for older white-collar retirees, and suspension of GM’s annual stock dividend of $1 a share. G.M. would also reduce its truck production by three hundred thousand vehicles by next year and planned to speed up delivery of some new products, like the Chevrolet Equinox crossover vehicle and the Cadillac CTS coupe. In June, GM tumbled to its lowest stock price in more than thirty years, and the Associated Press reported that an estimated ten million fewer cars would be on the roads in the U.S. by 2012.

... more about:
»Automotiv

While these figures do not seem to bode well for the automotive industry, one area of the market continues to thrive: after market sales of customized parts and accessories. In fact, over the course of the last eleven years the automotive special equipment market grew 104% compared with an average annual increase in new vehicle sales of 1.07%.

“The reality of the automotive industry is that car dealers typically make more money on the sale of accessories than on the cars themselves, and accessory packages are often times used to stimulate new car sales,” says Rainer Poertner, Executive Vice President of MWW Automotive, a leading designer, manufacturer, and supplier of customized, high quality original equipment (OE) accessories for new automobiles. “Although overall auto sales continue to stagnate in the U.S., the special equipment market, has steadily grown at an average annual rate of 7.4% and European markets are producing strong sales growth for U.S. manufacturers and suppliers. In addition, small fuel efficient car sales are booming also feeding after market accessory sales”

After market sales include everything from exterior systems such as rear spoilers, front grills, running boards, side pillar trim kits, and stainless steel door stills; stainless steel performance exhaust systems and chrome exhaust tips; interior systems including real wood, carbon fiber, and metallic look dash trim kits; electronic systems including seat heater systems, iPod interface modules; adaptive lighting systems, and more.

“If consumers can customize their jeans, their cell phones, and their computer software, why shouldn’t they be encouraged to personalize their cars?” asks Poertner, suggesting the phenomenal spike in after market sales is part of a larger cultural trend toward product customization.

Topics for discussion:

• Why is the American auto market suffering a pervasive downturn?

• Why does the after market sales of customized parts and accessories continue to thrive, despite the downturn in American auto market?

What actions need to be taken to turn this market around?

• If/when will the American auto market bounce back?

• How will the after market sales market grow in the future?

• How does the success of the after market sales model reflect larger cultural trends toward product customization?

About Rainer Poertner, Executive Vice President, of Marketing Worldwide Automotive

Mr. Poertner has a twenty-two-year record of accomplishments in founding, leading, and consulting with private and publicly traded companies in the USA and Europe. As founder, CEO, Chairman and majority shareholder of two publicly traded companies; he was responsible for managing the companies’ financial, technical and business development and secured funding for acquisitions and corporate working capital purposes through a network of private investors and US and overseas investment banking firms.

About MWW Automotive Group

MWW Automotive Group (OTCBB:MWWC) is a leading designer, manufacturer and certified Full Service Supplier of OE accessories for the global automotive industry for the customization of cars, sport utility vehicles and light trucks. Headquartered in Howell, Michigan, MWW has operations in the United States and Germany and delivers its products directly to select global automobile manufacturers’ vehicle processing centers and/or assembly lines in the United States, Canada, Mexico, South America and Europe. The VPC’s assembly lines’ technical teams install the MWW products in a variety of vehicle types and deliver the accessorized automobiles into the dealer channels in their respective countries. The company’s mission is to continue expanding its position as a global automotive company, to fully utilize its domestic and European design and manufacturing resources and to consistently design, manufacture and supply innovative and leading edge automotive accessories that fulfill a demand within a global market. More information about MWW Automotive Group is available at http://www.mwwautomotive.com or http://www.modelworxx.com

Laura Colontrelle | Newswise Science News
Further information:
http://www.investorrelationsgroup.com
http://www.mwwautomotive.com
http://www.modelworxx.com

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