 Off-Road Business, a sister publication to Advanstar's Styling & Performance, has released its third annual State of the Industry Report. Off-road Group Director Jim Ryan spoke at an industry luncheon at the start of the 2008 Off-Road Impact Trade Show and Conference held March 6-8 at the Anaheim Convention Center in Anaheim, California and gave attendees what he called a "Reader's Digest" version of the report. He also made printed copies of the report and copies on CD available to attendees.
"Basically, what the annual State of the Industry report indicates is that the 'off-road' niche of the automotive aftermarket will remain healthy, but the rate of growth will be slowed somewhat," said Ryan. "There are three major obstacles on that trail. They are fuel costs, the uncertain economy and land use issues." Those have always been major issues in the off-road aftermarket, but the order has been changed. Land use issues used to be the number one threat, but since 2006, fuel costs and the uncertain economic times have moved to the top of the list. The third annual State of the Industry report was commissioned by Off-Road Business and sponsored by the Off Road Business Association (ORBA). The study was designed by the Off-Road Business marketing team in collaboration with the Advanstar Corporate Research Department. The survey was fielded in November 2007 with 307 written questionnaires and 283 online surveys returned for a response rate of 6 percent. TOPLINE RESULTS FOR 2008 Results indicate that 69 percent of respondents expect to meet or exceed their 2007 sales goals. This number is down somewhat from 74 percent in 2007 and 76 percent in 2006. Off-road products are listed as responsible for 44 percent of total business revenues (many of the responding companies' manufacturer, distributor or sell automotive aftermarket parts for other than the off-road market) and that the off-road segment of their businesses has increased by 43 percent during the past two years. Nearly one-third of all respondents reported that they sell products/parts internationally (about nine percent of their total sales) and nearly two-thirds reported that international sales increased during the past two years. The average profit margin for off-road businesses was reported as 24 percent. Those who sell online reported an average profit margin of 25 percent, while warehouse distributors reported 32 percent profit margins. As expected 74 percent of total respondents reported that increased fuel costs and general economic factors had negatively impacted their businesses. The report breaks down and separates responses from retailers, manufacturers and warehouse distributors. All three groups indicated they expected their online business to increase in the future.
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