From SEMA eNews
DIAMOND BAR, CA — The automotive aftermarket is an industry that experiences large fluctuations in sales depending on the time of the year. Seasonal factors play a big part in business cycles on top of the fact that the aftermarket closely follows the behavior of the automobile market itself. While it is no surprise that 63.3 percent of total companies surveyed reported summer as their peak sales season, retailers actually rate summer and spring equally in terms of when peak sales occur. A SEMA study surveyed 98 companies last month, and some interesting findings about business cycles were revealed.
* 5.9 percent of manufacturers and 4.2 percent of retailers slow down production during valleys in the business cycle, and nearly 30 percent of the retailers do nothing.
* 20.8 percent of retailers verses 11.8 percent of manufacturers advertise more during slow business times.
* Almost 17 percent of retailers cut back on overhead/labor during slow times, whereas 8.8 percent of manufactures actually build up inventory during valleys in the business cycle.
* Roughly 60 percent of all the companies surveyed claimed that the difference between “peaks” and “valleys” within the business cycle range anywhere from 0 to 30 percent.
* Slightly more than a quarter of the companies surveyed receive up to only 10 percent of their sales as account receivables, which shows that cash flows generally remain high for automotive aftermarket companies. Surprisingly, though, more than one fourth of manufacturers reported to have 81 percent or more of their sales in accounts receivable.
Source: SEMA Research and Information Center
Automotive aftermarket companies can use the information in this report as a benchmark to gauge one’s own business activities. SEMA members can view the entire report in the Market Research Reports section of www.sema.org.
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