Diesel Market Dynamics

• Strength in the diesel pickup truck accessories market is linked to a customer base with relatively high income; and to demand for diesel work trucks.

• Diesels excel in areas of performance, longevity and cost.

• Diesel performance is a growing niche market segment.

• Owners tend to keep vehicles longer;

• Owners demand power and performance;

• Significant growth in youth market suggests long-term interest.

• Leading diesel pickup truck OEMs:

• Dodge Cummins

• Duramax

• Power Strokes

• Diesel market includes passenger cars as well:

• Volkswagen Jetta and Golf;

• Mercedes

• BMW

• Subaru

• Leading power-adding accessories:

• Chip

• Intake

• Exhaust

• Additional demand for “deep engine” parts:

• Clutches

• Pumps, etc.

• Consumers are interested in upgrades for:

• Performance

• Economy

• Towing

• Hauling

• Drag racing

• Sled pulls

• Diesel shop challenges

• Staff education

• Internet sourcing

• Market differentiation

• Fewer new truck purchases

• Fewer products for new trucks

• Access to inventory and wholesale pricing to compete with the OE dealer

• Consumer concerns

• Fuel costs

• Emissions, especially in California

• Reduced efficiency due to emission standards

• Government involvement and regulations

• Future impact is unknown

• California Air Resources Board rulings on emissions testing

• EPA restrictions

• Opportunities for diesel performance shops

• Competition diesel market is tied to street performance diesel market.

• New products are shown at events.

• The diesel racing market:

• Becoming more defined;

• Using more engineered technology;

• Reducing trial-and-error.

• Manufacturers are developing clean diesels for passenger cars.

• Future Outlook

• Research suggests hybrid vehicles may become diesel-electric.

• Research and development of diesel half-ton pickup trucks may expand accessories aftermarket further.