More than half of the general American vehicle-owning population made at least one modification to their vehicle last year. Instrumentation and information-display system modifications fulfill both "show" and "go" modification, and as a result, demand remained strong for both. Speedometer and tachometer replacements account for the majority of aftermarket instrument gauge replacement demand. Vehicle owners typically purchase instrumentation products because the instrument was missing from the OE installed instrumentation or because the OE instrumentation is not compatible with engine or transmission modifications.
Unlike most other modification components, where there is a broad range of pre-package products, this product has two distinct segments: low-cost pre-package products and fully customizable modification.
Companies such as Autometer, Stewart-Warner, VDO and Classic Instruments are the prime movers in this market, while the retailers and distributors support the mass-market demand for aftermarket gauges.
The hot rod industry is a major contributor to the demand for aftermarket gauges, as hot rod modifications are typically quite elaborate. A typical hot rod enthusiast may spend between $500 and $600 for custom aftermarket gauges. Traditionally, the "empty-nester" demographic segment has been a key contributor to the market's growth. However, with increasing fuel price volatility and rising distributed electronic content in contemporary vehicles, the need to attract young consumers towards aftermarket gauges is becoming more important than ever.
"The challenge lies in getting the youth more interested in their vehicles and vehicular modifications. This is an uphill task, with young folks spending more and more time indoors with their video games. Renewed interest shown by young consumers in modifying their vehicles, taking the nuts and bolts out and figuring out how cars work, can really jumpstart this market," says John McLeod, CEO of the Michigan-based Classic Instruments.
The variety of aftermarket gauge options available to modification enthusiasts is wide, and the attractive price points alleviate the affordability barrier that is an issue with many other aftermarket modification systems and components. These gauges vary from simple single information display gauges, to multi-variate multi-information displays. Customization of gauges and their development and delivery can range from four to eight hours to about six to eight weeks, depending upon the complexity of the process.
Aftermarket gauges are mostly installed either through dash panel modifications where the gauges are installed in a plastic, metal or alloy panel, or can be added onto a stock dash array, in which case the gauges are placed on mounted cups and bolted anywhere within the visual range of the driver. Gauge quality, illumination technique, bezel type, voltage protection, data link interfacing, accuracy and size are some of the key determinants of a gauge's price in the aftermarket.
An emerging demand generator that is gaining a lot of traction amongst enthusiasts is the need for obtaining real-time information on the key operating parameters of various vehicular systems. Increasing electronic content in automobiles has resulted in the prevalence of clusters and display modules that feature displays such as the check engine light. While it informs the driver that something is wrong with the engine, the driver is uninformed of the symptoms. This can be quite frustrating for a driver. Individual gauges can help solve this problem by providing accurate real-time information of various operating parameters of the system with which they are linked. The demand for dynamic information of various vehicular systems and components is expected to attract potential end-users towards the aftermarket.
With more and more consumer dollars being spent on interior-styling, exterior paint-jobs and vehicle styling, the need for instrument gauges that not only offer an eclectic look and dynamic information, but also compliment the vehicle's styling theme is on the rise. Frost & Sullivan research indicates that modification enthusiasts are spending more and more each year. Forty percent of all vehicle modification enthusiasts spent more than $3,000 last year. Given the comparatively low price points of aftermarket gauges and their installation, the fundamentals for this market look strong.
Moving forward, the demand for aftermarket gauges and gauge modifications will remain strong in the U.S. and Canada. The strategic initiatives undertaken by North American aftermarket manufacturers, suppliers, installers and retailers to look beyond typical consumer demographics to new and sustainable ones is expected to pay off. Moreover, the increasing demand for modifications emanating from newer vehicle segments and models (e.g. post-1970s), in addition to the traditional pre-1970s vehicle models, will inflate demand in the short-medium term, and reflect the increasing involvement of the younger population in gauge modifications and replacements.
Sandeep Kar is a program manager and senior industry analyst with the Frost & Sullivan North American Automotive & Transportation Practice. He specializes in advanced automotive technologies with expertise in light vehicle and heavy truck systems and technologies, automotive infotainment systems and vehicle networking technologies.
