Tuner are channeling high-powered excitement and growth into the aftermarket as the sport compact marketplace continues to rev-up revenues for sales and service.

"It's a huge bellwether for the whole aftermarket, and it gives companies an opportunity to move forward," says industry consultant Steve Boguski of Newbury Partners in Charlotte, NC.

Yet there is concern within the industry that some mainstream aftermarket operations risk being left in the dust by not directly addressing this highly enthusiastic segment. Accessorizing and performance enhancements aside, today's tuners are on track to become tomorrow's automotive consumers as they grow older and their vehicle needs change.

Small pickup trucks and European-style station wagons are poised to join this segment as tuner enthusiasts start families. Although the tuner category, is sometimes called the sport compact import market, that term is quickly becoming outdated as the rapidly advancing tuner trend cuts across domestic nameplates and larger vehicles.

"It's going to be one market going up the food chain to all types of vehicles." predicts Tim Andrews, sales manager for Fidanza Engineering Corp.

"We see a lot of crossover business," reports Ron Lazara, sales manager at Performance Warehouse (PW), which has two distribution centers in the Northwest. As part of the 14-store Baxter Auto Parts retail chain, PW also services independent jobbers, 135 affiliated members of the Parts Pro program group and 56 Auto Value stores. Other wholesale customers include CARQUEST and NAPA.

"We've been able to place a lot of sport compact equipment into traditional stores," Lazara points out.

"I see it becoming more mainstream as more people get into it," agrees Michael Meyers, president of Number One Parts Inc. (NOPI) of Atlanta. With six stores and a warehouse in Georgia, NOPI has a worldwide tuner customer base that generates more than 3,000 phone calls a day and a million unique visits each month to its Internet site, www.nopi.com, which accounts for 25 percent of its business.

NOPI's Nationals Supershow program has teamed with Universal Studios and Microsoft Xbox to run the nation's most lucrative drag racing series under the NDRA (NOPI Drag Racing Association) banner. Events are held all over the country, and tuner fans form caravans to travel to these extravaganzas. Attendance at a single NOPI event has topped 100,000 people.

"NOPI is the leader of the pack," notes Mary-Beth Kellenberger, senior industry analyst for Frost & Sullivan. Distributors, jobbers, retailers and service providers can learn a lot from NOPI's take on tuners, she says. "The event-planning organization drives the parts sales, and that's a key component for a local shop."

AN AFFORDABLE SPIN

More than 70 million Americans comprise the tuner-heavy Generation Y (those born between 1977 and 1994). According to J.D. Power and Associates, a market research company, their top 10 automotive nameplates consist of Mitsubishi, Daewoo, Hyundai, Saturn, Pontiac, Kia, Volkswagen, Honda, Mazda and Suzuki.

"Those are the Camaros, Mustangs and 'Cudas of the '60s," Lazara contends.

Word-of-mouth steers this sector. Internet sites and chat rooms are critical components of communication among a fast-moving generation that has grown up accustomed to bank machines and drive-thru food.

Close to two-thirds of the tuner vehicles are purchased used, which creates demand for replacement parts and services. "Regular maintenance is still important, and they have to have it done somewhere;' says Michael Maggiore, an owner of Superior Racing Development in Tempe, AZ. "We do a lot of maintenance on modified cars."

Most tuner cars are old enough to be off-warranty, Maggiore says, but newer vehicles with aggressive modifications often need servicing, too. "A lot of times the dealers don't want anything to do with that" Because of the complexity of the cars, much of the segment relies on do-it-for-me services, although do-it-yourselfers are a viable force. By all accounts, the DIFMs and DIYers enjoy a shared sense of excitement reminiscent of the hot rod and muscle car era.

"As a traditional aftermarket guy, what I like about the tuner market is that people are customizing their cars again," Boguski observes. "A few years ago it was okay to customize your truck, but not a car. Now it's cool to customize your car, and there will be a rub-off-effect to be felt all the way through the market beyond the tuners. That's a great thing for the automotive aftermarket, and it's being driven by youth finding a love for cars again. Younger people today are looking for color or flash, whether it's in the engine compartment, the interior or exterior."

The big thing to remember about the tuner market is that it is much more than just a guy sitting in his garage with his buddies, says Boguski. "It's like a night club with cars."

"People love their cars," Meyers explains, "and this is a generation that loves technology. These cars are technological, and it's also a culture and a lifestyle."

Tuner events are diverse and multifaceted with attractions far beyond the car shows of yesteryear. The day and night automotive content can include lighting contests, screeching burnout challenges and audio equipment competitions. Much like a beachfront spring break celebration, there can be disc jockeys, bands and dancing, swimsuit pageants, skating competitions, martial arts exhibitions, foam parties and a host of other activities limited only by the planners' imaginations.

"There's something for everyone," Kellenberger reports, contrasting the tuner scene with street rod and muscle car cultures of the past. "It involves those who are not necessarily car enthusiasts."

Tuner video games are beaming across the marketplace. Some versions even allow players to add name-brand aftermarket modifications to their game vehicles--enhancing the realism while building brand equity. "It puts our logo on the car while you're driving it [in the game]," says Andrews.

Youngsters not yet old enough to drive take part in the tuner scene, enjoying the fun-filled lineup of entertainment while forming a mental picture of the vehicle they want to customize upon obtaining their drivers license.

ACROSS ALL LINES

Automotive aftermarket business owners can unite with merchants of other goods and services--such as food, drinks, video games, clothing and music--when putting on tuner events.

Tuner tastes tend to be regional in nature. Within this fast-paced category where hot items come and go, a product or fad can gain fast ground in one area while falling flat in another.

This is one of many reasons why attending and sponsoring shows can be so important: You're making the buying public aware of what you offer, and, at the same time, you are seeing what interests tuners.

Like the earlier hot rod days, much of the new product innovation comes from the ground up, where enthusiasts devise homemade customizing techniques that eventually lend themselves to mass production.

Previously, Jack Panzarella was an automotive repossession agent. He repossessed a car that had a light attached beneath it, and in the process broke the fixture. Obligated to pay for the damage and astounded at the cost involved, he decided to make the repair himself. As Panzarella toiled with this unique light, the proverbial light bulb went off over his head, and StreetGlow Inc. was born.

Since then, the company has made Inc. magazine's Top 500 list of America's fastest growing companies three years in a row. It has more than 1,,50(I lighting products, including flashing tire lights that whiz rings around the wheels, glowing windshield washer nozzles and retro glow dice for a blast from the past.

Things really lit up for the tuner category when the "The Fast and The Furious" hit the silver screen. "With the incredible and unexpected success of [the] film, we saw an increase in StreetGlow sales," says Panzarella, StreetGlow's CEO. "It became apparent that this increase was due to the buying power of the more mainstream audience, not just the usual car enthusiasts. The market was untapped and we helped fall that niche."

The sequel, "2 Fast 2 Furious," was no such box office smash, but the tuner market itself remains a star at the checkout counter. The Andersons, American, Advance Auto Parts, AutoZone, Best Buy, Canadian Tire, Meijer, O'Reilly Auto Parts, Pep Boys and Radio Shack all carry StreetGlow products.

"There is a big opportunity now for traditional retailers in automotive to take advantage of the market," says Keith Conlon, the company's marketing director. "It's a great opportunity to get younger customers into traditional automotive retailers."

Service centers can gain more work by offering modification products during oil changes and other maintenance tasks. "These under-car kits could be a key opportunity for installers," says Conlon.

"This is not going to go away for many years to come," Lazara says of the tuner category. "I don't think it's possible to continue the dynamic growth that we've seen over the past few years, but even if the growth dies off the market will still be here."

CATCHING THE WAVE

The tuner appeal cuts across gender, economic and ethnic lines, with women playing a much larger role. "It used to be that the guy's main interest was a car show, and file girl would just be hanging on," says Kellenberger. "Now it's more interesting for everybody."

Currently the $3 billion sport compact marketplace enjoys a 35 percent annual growth rate, according to the Specialty Equipment Market Association (SEMA). Female participation in the category is approaching 20 percent, and more than 65 percent of enthusiasts buy their tuner cars used--a great benefit for vehicle maintenance providers eager to pursue this market.

Automakers are getting into the tuner groove by developing OEM vehicles and dealer-oriented aftermarket programs targeted at this niche. Mopar Speedshops are gracing Chrysler dealerships as a store-within-a-store concept.

"One of the secrets to success is having the proudest looking stores, according to Jim Schroer, a Chrysler executive group vice president.

"Chrysler, Jeep and Dodge dealers already have the basic tools necessary to become involved with the tuner trend. We're catching the next wave."

He reports that showrooms often will include tricked-out custom rides that can help dazzle and entice shoppers. "We're going after a new generation of tuners and appealing to the compact performance market," says Schroer. "Vehicle personalization is hot, and Dodge, Chrysler and Jeep are out to be the coolest vehicles on the road."

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IMPRESSIVE
NUMBERS

Using SEMA figures from
2003, 27 percent of the
participants annually
spend more than $5,000 a
year on their tuner cars.
Here's how they spend it:

Engine modifications      32%
Exterior modifications    48%
Interior modifications    20%

Note: Table made from pie chart.

COPYRIGHT 2004 Advanstar Communications, Inc.
COPYRIGHT 2004 Gale Group