This year will definitely go down
in the history books. Many are already calling 2009 the worst recession since the great depression of the
‘30s. Although the automotive specialty equipment industry typically is impervious to economic swings,
the last two years have had a definite negative impact.
In August, Fast Lane Research
conducted a survey of more than 2,600 industry manufacturers and found that 65% were experiencing sales that were less than
the year before. Based on manufacturers’ responses, the slide began in the last half of 2007 when
22% had sales less than 2006. The spiral accelerated to 31% of respondents with decreased sales in the
first half of 2008. Then in the last half of 2008 and the first half of 2009 the percentage of companies
with sales below the previous year increased to 62%.
This is a trend the industry is not accustomed to. In fact, this is only the second time in more
than 25 years of recorded industry sales data that there has been negative sales growth—the first was in 1991 during
the first gulf war. What’s worse is this is the first time there have been two consecutive years
of decreased sales for the industry. When we asked manufacturers how they expected the automotive specialty
products industry to do in 2009, 57% indicated that industry sales would be less than 2008. Another 30%
of responding manufacturers expect 2009 to be about the same as last year, and 13% expect to see and industry wide increase.
The good news is that these same manufacturers
are expecting the industry to make a comeback in 2010. When asked what change they expect next year in
the automotive specialty equipment market, 56% said that based on what they know of the marketplace business will be in positive
territory again. If these people are right, and who should know better than they, we are seeing the light
at the end of the tunnel (and it’s not an oncoming train!).