When F. Alan Smith retired in 1992 as GM vice chairman and former chief financial officer, he wanted to stay active in the automotive business.
Mr. Smith was "a young 61" and began looking around for an opportunity with growth prospects, preferably in both OEM and aftermarket sectors.
Just getting under way was the dynamic rise in the SUV segment, fuelled by Generation Xers who wanted to combine the people-moving function of their Explorers, Cherokees and Suburbans with the need to tote lots of bring-alongs such as golf clubs, bicycles, motorcycles, infant strollers and luggage.
"Such an opportunity came along in 1994," recalls Mr. Smith, "and with the financial assistance of Chase Capital, we found Advanced Accessory Systems. It then was a single-product supplier of ski racks for OEM installation."
Mr. Smith, the firm's chairman, adds, "That business has grown dramatically, with the SUV/minivan/light truck boom, and AAS sales have soared from $60 million in 1995 to $310 million in 1999."
From OEM roof racks alone, the Sterling Township, MI-based firm has broadened its accessories scope to included hitched bike carriers, brush and grille guards, spare tire carriers and running boards that lower and raise with the opening of vehicle doors.
AAS President and CEO Terence C. Seikel, showing the AAS range of products at its manufacturing plant in Port Huron, MI, forecasts no letup in demand for the firm's roof racks or rear and side carriers.
The firm is aggressively pursuing aftermarket sales through, not only independents, but also dealer F&I managers where sunroofs and anti-theft systems are also sold as post-vehicle sale items, often on used vehicles.
Automakers urge dealers to sell such equipment along with the vehicle, and include the cost of the accessories in the financing of the vehicle. That's because it's more appealing to customers to pay for the accessories in insta-llments melded into the vehicle financing.
Additionally, studies show that accessories, purchased subsequent to the vehicle's point of purchase, are usually purchased somewhere other than the dealership. So it's important for dealerships to seize the opportunity before it slips away.
Suggested retail prices of roof racks offered by AAS range from about $300 to $800, with the top range for a kayak or as many as eight pairs of skis.
"Installation of a stylish roof rack is relatively easy, and can be done without interfering with a sunroof and in configurations that can handle skis and bikes," says Richard E. Borghi, president and COO of SportRack International, a subsidiary of AAS.
"In addition, we offer trailer hitch systems which can hold several bikes in the rear and a full line of cargo carriers for golf bags and hunting equipment. All of these can be adapted for new-vehicle or aftermarket use."
AAS got into the towing and hitch side of cargo-carrying with purchase of a Dutch company several years ago, extending its plants to 10 in North America and Europe.
"We have half of the roof rack market in the U.S. now and they've become such a popular item that they're standard on Jeep Cherokees and Grand Cherokees," says Mr. Seikel.
"The future for growth is bright and we see dealers as a big potential to equip new and used vehicles for racks and hitch carriers."