Tech Center News

August 23, 2004

ASC: Niche Vehicles Demand Product Life Cycle Approach

By Byron Pope

Staff Reporter

The days when automakers could sell a million units of one model are gone. Today, new nameplates hit the street every year. Paul Wilbur, president and CEO of Southgate-based ASC Inc., says that to survive in today's marketplace, automakers must create and produce high-image specialty vehicles.

Not surprisingly, Wilbur's company is in that very business. American Specialty Cars Inc., or ASC, evolved out the aftermarket venture American Sunroof Co., which the late downriver industrialist Heinz Prechter ushered to such incredible success.

"The basis of our company is specialty cars, that's what we're doing these days and it's the strongest market trend we see in the auto industry," Wilbur said. "The industry is fragmenting very rapidly. We keep tabs on things like the strength of the industry, but we pay particular attention to the number of nameplates."

Wilbur detailed ASC's new guiding principles during a recent speech at the annual Management Briefing Seminars (MBS) in Traverse City. Among other germane topics, his talk alluded to the results of a study from the Rochester-based firm Foresight Research.

According to the 2004 High Image and Specialty Vehicle Study, specialty vehicles, while low in production, help sell the more mainstream products in an automaker's lineup. One example cited in the study indicates that the Ford Lightning, a performance version of the popular F-150 pickup, will help Ford sell more than an additional 28,000 F-Series pickups this year.

Those are sales, Wilbur says, that would not have been made without the "gravitational pull" of the high-image truck on prospective buyers.

"Product guys always had a gut feeling that when you did a specialty car it was more powerful than the car itself, but nobody could prove it," Wilbur said in a telephone interview after the Traverse City seminars. "I don't think the power of the specialty vehicle was really understood.

"Foresight Research gave us data about the Chevrolet SSR, which sells in the 10 to 12 thousand [units] a year range. But it's selling more Colorados and Avalanches. Not all consumers can afford the SSR, but people come in to see it, and it increases showroom traffic. Dealers know how to sell cars, so people may leave with another GM product. I believe in the halo effect, and we have quantitative data now," he said.

The SSR, which Chevy calls the "world's first convertible sport pickup truck," was developed through a collaboration between General Motors Corp. and ASC.

According to Wilbur, who referenced the SSR several times during his speech, specialty vehicles not only help sell mainstream products, they also turn a tidy profit.

"The SSR is a profit-maker, in today's era, with all of the automotive manufacturers and suppliers under such Wall Street-backed scrutiny, the halo vehicles have to make money," Wilbur said. "Maybe in the past they didn't make money. With the SSR we spent a tremendous amount of time figuring out how to reuse components, instead of using new parts."

"The SSR's frame is a modified TrailBlazer frame. GM uses it's own parts bin, but we have access to everybody's components, so it allows us to look at reuse in different ways than manufacturers can. We're able to develop a business case that makes money for both ASC and GM," Wilbur said.
More and more automakers are using specialty cars to jazz up their lineups. While Wilbur focused mostly on GM during the course of his speech, he did mention other automaker's halo vehicles, including the new Ford GT and the venerable Dodge Viper.

While specialty cars may be a great way to draw attention to your brand, Wilbur cautioned automakers not to become too complacent.

"You have to be more aggressive in product development and in tune with the marketplace, and that's what ASC is trying to do," Wilbur said.

"Even though we just came out with the SSR, we're working on other things to improve it.
"Even as cool as the SSR is, when you get into specialty cars you can't even leave those alone anymore, you have to do more things to keep the imagery high and fresh and keep consumers interested," he said.

"So we did the Blackbird version of the SSR, which has a 425-hp engine and 22-inch wheels. It's a fiber clad, sportier version of the SSR that's fast and handles fantastic. We have to stay on our toes with speciality vehicles to keep them fresh.

"It's kind of like the old adage, 'Whether if you're a lion or a gazelle on the tundra, when you wake up you better be running because the competition is,'" Wilbur said.