Auto Dealers find new biz in Accessories

Accessories and Dealers
Marketing Specialty Equipment to Sell New Cars and Trucks
It used to be that only used cars three to five years old were candidates for accessorization. Now, however, mainstream new-car buyers have discovered that they can outfit a vehicle the way they want right on the showroom floor. With new-car margins eroding, the dealerships are also embracing accessorization as a means to attract customers and move inventory. Many dealerships now house accessory showcases in high-traffic areas, and the automakers have begun branding their own accessory lines.

There are distinct advantages that lead many dealerships to include a large selection of specialty-equipment products in their offerings. The sheer variety of the accessories available through the aftermarket is stunning, and they typically cost less and offer dealers greater profit potential than comparable OEM-branded products. In addition, specialty-equipment products allow a dealership to offer a packaged combination of parts that is unique. With well-stocked accessory boutiques, dealerships are able to offer their customers the opportunity for true one-of-a-kind personalization, providing a range of options to suit each buyer’s self-image and lifestyle.

The appeal of an accessorized vehicle is conspicuous in a showroom. Even browsers who may be looking for low-end transportation are drawn to the bling-bling model with the leather interior and 20-inch rims. Those high-profile rides build traffic, and they can be used by a dealership to establish an identity as the place to go for what’s new and hot.

Accessories in the Dealership

Galpin Auto Sports is a showroom that carries everything from audio/video, paint and interiors to high-performance engine modifications, suspension, brakes and wheels and tires. It is the de facto restyling center for its parent operation, Galpin Motors.

Accessorization helps sell new cars and trucks. That has become a given over the past few years. It’s why the factories have developed their own accessory lines, and it’s why dealerships highlight customized cars with preferential placement both on the lot and in the showroom.

“We put them front and center,” said Beau Boeckmann, vice president of Galpin Motors and president of Galpin Auto Sports in Van Nuys, California. “That’s our feature vehicle. We don’t want to have all super-customized cars, because you want to have some affordable cars, but it’s important to have the hot new products on the showroom and on the lot. That also demonstrates what kind of work we can do.”

Across the country in Orangeburg, New York, Bill Kolb Jr., owner of Bill Kolb Jr. Subaru, goes so far as to create his own versions of factory offerings, complete with unique badges. He then advertises only those custom vehicles to draw attention to his full inventory.

“That keeps the competition from being able to sell the same thing that we’re selling,” Kolb explained. “We might create an additional model of the Forester with leather interior and heated seats and a sunroof and call it an XSI Forester, and nobody else has that. It gives us an edge.”

The two dealerships have different philosophies about installing their accessories, however. While Kolb’s dealership might bolt up an exhaust system or air filters, he shops out items such as leather interiors, sunroofs and the like.

“I’ve found that I’ve been able to work with the same vendors year after year,” Kolb said. “I have one vendor for sunroofs, another for leather, and another for glass. I stick with the same people. They know me and give me a fair price because I give them large quantities, and that seems to work out best.”

Galpin Auto Sports, on the other hand, was created specifically to market and install specialty-equipment products. It has become the de facto restyler for the parent dealership as well as being a custom shop.

“Galpin Auto Sports is a showroom,” Boeckmann explained. “We do all makes and models of cars with everything from audio/video, paint and interiors to high-performance engine modifications, suspension, brakes and wheels and tires—just about anything you can dream of for your car. A lot of our former vendors have become part of our dealership. We’ve been customizing for over 50 years, so a lot of those relationships have developed over many years, and now we’ve put it all into one place where we’re our own vendor. We do some sublet for certain paint and body work, but for the most part, we’re doing it ourselves.”

Both organizations are fully involved in the selection of the parts that go into their restyled models. Kolb cited the SEMA Show as a great place to discover the latest trends. When he sees something that he thinks will work on one of his badged creations, he seeks out an appropriate installer. When he decides on a package, he ships a prototype car from vendor to vendor for the initial fitment.

“A year ago, we sent a GTX out to Borla for exhaust, then to K&N for an air filtration system, then had a chip made at another place,” he said. “Once we get that prototype done, we repeat the same car. We have the manufacturers send the parts to us, and we install them at the dealership. We do the same thing with leather interiors when the factory doesn’t offer it as an option. As soon as a model comes in, we remove the seats and send them out to have a pattern made. From there on, it’s just a question of selecting colors for that pattern.”

Selecting suppliers takes some investigation and homework, Boeckmann said. In some cases, Galpin’s relationships with specialty-equipment manufacturers have been established for years. But there are times when the company needs something different.

“Since we opened the store, we’ve dealt with literally hundreds of vendors,” he said. “What we really look for is who has got the best reputation in the industry and how long they’ve been around. We have to feel that they’re a solid company and that they’re going to be here in the future. We need high-quality companies that stand behind their products and have good people to work with.”

Kolb, whose company employs a cadre of restylers, said that one of his criteria is the vendor’s insurance. While parts have their own warranties, he checks that the restyler carries a policy that will indemnify the Subaru dealership against errors during installation. Just as with building a house, he said, the dealership has to ensure that its vendors are reputable and do quality work. What goes out the door affects the dealership’s reputation not only with the customer who bought the car but with others who see it and may want something similar.

“Anything I ever put into an automobile, I do equal to or better than the factory,” he said. “I try to make everything I do look OEM. We want to keep these customers for life, so we don’t put in anything that won’t last if they keep the car five or six years. Otherwise, we won’t keep them as a customer.”

“I also don’t try to pull too much profit on accessories,” he continued. “I don’t look at accessories necessarily as an additional profit center. I look at them as something that will make my cars different from what my competitors have and give my customers another choice.”

From restylers to manufacturers, new-car dealerships rely on outsourced products and services to draw customers through unique offerings. No wonder they’re very selective about whom they do business with.

“We look for companies that have developed a good reputation by standing behind their product,” Boeckmann concluded. “If they have the same focus on the customer that we have, that’s who we want to do business with. Quality is the primary concern.”

Success as a Restyler

In order to be successful, a restyler must provide quality work with the proper product installed on the appropriate vehicle.

To achieve success as a restyler, a company must do quality work, prove itself trustworthy and know the market. David Emerson, owner of the installer/restyler company Uni-Sun, Inc. in Lombard, Illinois, has been in business for 33 years, and Jim Karp, president of Kar Products, Inc. in Modesto, California, has been restyling vehicles for new-car dealers since 1975. Both pointed to relationships, trust and honesty as keys to success in their businesses.

“In my opinion, the most significant key to a dealership relationship is trust,” said Karp. “Once you have that and don’t abuse it, you’re on your way to a long-term relationship. Of course, your shop must do quality installations. When we opened our new facility in Modesto nine years ago, all we did for the first six months was fix problems that another shop created. We gained the dealer’s trust and confidence from that point on.”

Emerson agreed, noting that sincerity is crucial to establishing and maintaining rapport with a dealership. “I learned 25 years ago that it’s a lot easier to remember the truth than to remember a lie,” he said. “If you have a problem, tell the truth. It will give you credibility with your customers.”

Emerson also said that actually showing the product to the dealership he’d like to work with helps build the relationship. He also previews the dealership’s lot to see if one model is prevalent in the stock, and then he tries to develop a plan to include that model. He said that vendors must do factory-quality work and must be conscious of keeping customers happy even if a problem arises after a warranty has expired. In addition, both he and Karp noted that salesmanship is part of the relationship-building process.

“Our experience and confidence in the industry help us,” Karp said. “We do not hesitate to show a list of dealers we service, because they are often direct competitors with the dealership we are calling on. We offer to have the prospective customer stop by our facility any time to see what we do, how we do it, and to let them know that we are here for the long run. We have a showroom with a different restyled vehicle on it every 30 days. We don’t sell price. We sell quality and our commitment to the dealership making more gross profit and helping them sell vehicles.” Karp also warned against a restyler bashing its competitors when making a sales call on a dealer. “It doesn’t work,” he said. “It makes them look bad, and it fills my office up with their sales binders!”

What does make a restyling business successful is the proper product installed on the appropriate vehicle. Karp said that his company concentrates on packages—adding multiple products to a single vehicle to produce a unique entity.

“More than 60% of the vehicles we restyle receive more than one upgrade,” he explained. “We offer moonroofs, leather packages, seat heaters, DVD systems and dash trim. Most of our packages are well received at the dealerships, and the outside accessories draw the customers to the vehicles first and then the wow factor kicks in when they open the doors. We have been told many times that the custom two-tone leather sold the vehicle.”

Just as crucial, said Emerson, is that the restyled vehicles are prominently displayed on the dealership showroom or lot. “It’s the dealers who are aggressive in showing aftermarket products that are the most successful with them,” he said, adding that he’s not a big fan of small display rooms with parts on a shelf. “

“I don’t think it’s as dramatic as having them on the car,” he explained, “and there are only a few items that you can really display on a shelf, like a custom grille. With parts like sunroofs, vinyl tops, leather interiors or custom body parts, the most visual affect is when they’re installed on the car.”

Karp pointed out that keeping up with trends is also important to establishing credibility and retaining dealership clients. With two sons—one 24 and the other 34—he has built-in barometers of what appeals to a wide range of new-car buyers. He said that staying in constant contact with his company’s key suppliers is another source for keeping tabs on when upcoming new products will be released.

Even so, both men cautioned that trying to predict what will sell is an iffy business at best. “Sometimes our own tastes can cloud what will sell,” said Emerson, while pointing out that the accessory market is a “want” not a “need” business. “There’s not one item that we sell that is needed,” he said. “It’s got to be something that’s attractive and that will draw attention. The biggest seller in my mind over the last couple of years has been the new Chrysler 300 Bentley-style grille. It has a much more luxurious and dramatic look than the standard ho-hum egg-crate grille that Chrysler came out with. Because the car was such a success, the products for it piggy-backed in popularity.”

Karp said that his company sticks to what it knows best and grows on that, though he does occasionally take chances to see how certain products are received. He selects vehicles that are selling well already. “We want the dealer to make more gross profit,” he said. “That’s why they do business with us. We try to create ways for them to move vehicles and at the same time increase their grosses per vehicle.”

Which is the path to restyling success.

Professional Restylers Organization

To help promote stronger relationships between restylers, auto dealerships and their customers, the Professional Restylers Organization (PRO) offers myriad programs and services, including training and educational materials as well as information and supplies.

The Professional Restylers Organization (PRO) is a SEMA council that focuses on the challenges that face the restyling segment of the specialty-equipment industry. Through its programs and the interaction of its members, PRO seeks to continue the growth and prosperity of the restyling industry and its businesses. PRO’s ongoing programs and services include training and educational materials as well as information and supplies to help promote stronger relationships with auto dealerships and their customers.

For instance, “Vehicle Accessorization: The Fast Track to Greater Profits” is both a 14-minute video and an accompanying brochure aimed at educating dealerships about the opportunities and benefits of working with restylers and the accessory market.

Another tool to help restylers create and maintain relationships with car dealerships is the PRO Sales Training Manual. The 80-page, step-by-step guide provides restylers with advice on selling to new-car dealers, including how to identify the key decision maker and understanding the inner workings of a dealership.

The “Owner Information Packet” is a program designed to help restylers cultivate credibility with customers who have had new products installed. The customer is provided with a pre-printed envelope that contains all of the necessary instructions and paperwork for the new product, safeguarding against that information being thrown out or misplaced. Each packet also includes an explanation of consumers’ rights, and the envelope itself can be used as a marketing tool, personalized with the restyling company’s name and logos.

Consisting of more than 300 member companies that include manufacturers, warehouse distributors, manufacturer’s reps and restylers and installers, the PRO council can provide help and information about all facets of the restyling industry. To become active in PRO, a company must first be a SEMA member. PRO participation also includes an annual dues supplement, the proceeds of which are used to fund PRO-specific programs and projects.

Visit www.sema.org/pro for more information about the Professional Restylers Organization.

SEMA Dealer/Restyler Programs
While the Professional Restylers Organization is the SEMA council with the closest ties to the restyling community, the association also provides other benefits that directly impact restylers and hold the promise of cooperation and mutual opportunities with new- and used-vehicle dealers. Perhaps most significant among the developments on that front is the SEMA Dealer Relations department, which was created with a two-fold purpose. Its primary objective is to help the association’s members sell more products and services to car dealers, but it is also charged with educating car dealers about the benefits of vehicle accessorization. A host of programs and services are directed at those goals.

As an example, SEMA has produced a styling showcase at the National Automobile Dealers Association (NADA) Convention & Exposition for more than a decade. The exhibit is designed to inform the members of NADA about the restyling industry and cast its member companies in a positive light. In addition, the showcase has allowed SEMA to strengthen its rapport with NADA and communicate the accessory industry’s message to dealers through NADA workshops and publications.

In a similar vein, the Dealer Relations department has presented seminars at the SEMA Show for the past several years. This program educates dealers who attend the Show through presentations by already-successful dealers who have ongoing accessory programs. There will be more than 5.000 buyers representing new-car dealerships at this year’s Show, which is more than 10% of the total buyer attendees.

More than 13 years ago, SEMA initiated the OEM Roundtable Tech Talks as another means of improving commerce and cooperation between SEMA members and the auto makers. While not directly tied to dealers, this program provides an implicit benefit by allowing manufacturing members to gain early access to information about new or soon-to-be-released new models from the auto makers themselves. The manufacturers may use the information presented in morning and afternoon briefings by OE marketing, design and engineering personnel to initiate new-product development—products that will become the accessories of tomorrow.

One of the direct tools that help restyling companies is the SEMA Installer Certification program. Through a series of tests, installers may measure and confirm their proficiency at various accessory installation and repair tasks. It is the only professional designation that recognizes individual achievement on a national level. In addition, SEMA’s year-round educational programs, such as seminars and webinars, include topics targeted specifically to installers and restylers.

Warranty assurance is another area of deep concern to restylers. Warranty denial has been much debated over the years, and even though the Magnuson Moss Warranty Act of 1975 provided specific guidance about the topic, the industry has been working on a program to cover specialty-equipment parts so that vehicle dealers and consumers may purchase specialty-equipment products with confidence.

Soon to be launched as a pilot program through five SEMA-member installers, the “ProPledge SEMA-Member Guarantee” provides products from participating companies with a uniform, 3-year/36-month industry warranty. It includes provisions for downstream coverage should a covered part or installation defect cause a related vehicle or vehicle component failure. ProPledge also addresses dealer concerns over liability. Organizers will gauge the program’s impact and effectiveness by studying the pilot program and assessing future communication and training needs prior to national rollout later this year.

Information about these and other SEMA Dealer Relations programs are available through the SEMA website (www.sema.org/dealerlink ) or via e-mail at dealerlink@sema.org .

Ellen McKoy, Senior Director, Dealer Relations

When restylers or dealerships need a helping hand from SEMA, their first call is often to Ellen McKoy. A graduate of Goddard College with a Bachelor of Arts degree in comparative literature and philosophy, McKoy was appointed SEMA’s senior director of dealer relations in July 2001 after serving in several other staff positions. An experienced in-house publicist, marketing consultant and journalist, McKoy began her automotive career in 1975. As co-owner of a Long Island, N.Y.-based restyling center, she led the company’s dealer-direct sales and marketing efforts, expanding the firm’s customer base to more than 150 new- and used-vehicle dealerships in the tri-state metropolitan area.

McKoy is currently responsible for coordinating SEMA’s annual exhibit at the National Automobile Dealers Association (NADA) Convention & Exposition; working with other trade organizations and the media to inform dealers about the benefits of vehicle accessorization and developing dealer-directed educational programs and materials. A frequent industry speaker on the topic of vehicle accessorization, McKoy has conducted workshops and seminars at the SEMA Show, SEMA Spring Expo, Mobile Tech Expo, NADA Convention and Dealer 20 groups.

McKoy also serves as staff liaison to the Professional Restylers Organization (PRO), a SEMA council representing the collective interests of member companies involved in the restyling and accessory market. She is responsible as well for the SEMA Installer Certification Program, developed in cooperation with the National Institute for Auto-motive Service Excellence (ASE). The SEMA program grants professional credentials to qualified installers and technicians in the areas of accessories and custom wheels and tires for light-duty trucks and automobiles.

Named SEMA Woman of the Year in 1992, McKoy previously served on the SEMA Board of Directors and as chairman of the PRO council.

She can be contacted via e-mail at ellenm@sema.org or by telephone at 909/396-0289.