As Consumers Hold Onto their Vehicles Longer, Protection Products Gain Momentum
Dealerships continued to generate solid profits from accessories sales in 2011, in spite of economic pressures and the residual impacts of the Japanese tsunami, according to the 2012 AOA Auto Accessories Trend Report (www.izmocars.com/trend-reports/aoa-2012.pdf) issued by izmocars.
Accessories sales represent a $38 billion market and an important area for dealerships seeking to diversify revenue. With an improved new car sales market on the horizon, dealers who have cracked the code of selling accessories are in a unique sweet spot for 2012. Plus, the economy has driven consumers to hold onto their vehicles for record lengths of time, which might explain a key trend that surfaces in this report: more and more car buyers are opting for protection products, reflecting an emerging new car buyer mindset focused on a longer vehicle life.
Understanding your accessories market and knowing which accessories are more likely to be popular with your specific customer base is a best practice rule for dealers who are accessories sales champions. Here are some key highlights from the report.
AOA Auto Accessories Trend ReportHighlights:
- Spurred by economic conditions, lengthening car ownership cycles, and a year filled with extreme weather, protection and convenience accessories were the overall winners for 2011, with paint protection ranking number one in dealer profits, knocking upholstery from its top spot for the previous year.
- OE products also thrived throughout the year, gaining the second (factory exterior), third (body side moldings), and eighth (factory interior) spots in volume of parts sold for the year.“Guard thy car” was a definite theme in the breakdown of these categories, with consumers purchasing plenty of mudguards, splashguards, door edge guards, bumper protectors, nose masks, and door sill protectors.
- By region, long-life vehicle trends and the weather made for a common theme, with protection dominating products sold. Window tints, predictably, remained strong in the South, although the category did not make the top five in other less sunny regions. Floor mats remained the most popular category across regions in 2011, grabbing first place in the Northeast and Western regions and placing in the top five in all other regions.
Additionally, the top accessorized makes and models in 2011 were:
- Toyota Camry
- Honda CR-V
- Acura MDX
- Lexus RX
- Scion tC
The report also revealed that there is revenue to be generated for dealerships that focus on accessories sales. The average dealership* analyzed for the report generated over $260,000 in annual sales of accessories to new car buyers in 2011—in addition to pre-installed parts and options, with anaverage of over $475 in accessories sales per vehicle sold, an average gross profit margin of 45 percent, and an after-commission net profit margin of 32.3 percent.
For more details, and to read the full report, click here: www.izmocars.com/trend-reports/aoa-2012.pdf
Sidney Haider is president of the Add.On.Auto division and Vice President of izmocars. He is responsible for all US operations of the company including sales and marketing functions. For more information please email email@example.com.
* The 2012 AOA Auto Accessories Trend Report is based on complete year sales data from a diverse sampling of 150 dealerships who utilized AddOnAuto from izmocars (www.izmocars.com/solutions/aoa).