Roof boxes on top as car accessory market defies auto downturn
The Chinese market is grim for European car makers, but it’s an entirely different story for accessory makers
The second-quarter financial details of car makers are starting to come through, and we know from previously released volume figures that they will contain bad news from China.
But in the spirit of summer holiday optimism, I’m swerving the gloom to look at a success story from an automotive-adjacent company whose executives didn’t mention China once in their second-quarter call to investors.
Swedish accessory firm Thule – the name emblazoned on thousands of bike racks shedding garage cobwebs onto the roads this summer – reported a rise in operating margin to 22% for the second quarter, up from 21% the year before. For the full half year, the margin hit 20%.
Anyone who has bought a Thule product new won’t be surprised to learn the company reports profit margins closer to that of Porsche before it suffered its China/EV meltdown. They’re expensive.
But the revelation is that Thule hasn’t yet suffered its own China crisis in the form of competition offering similar performance for a much reduced price.
After all, since Covid the Chinese have become mad keen on camping and other outdoor activities, fed by multiple equipment firms. Established bike makers, for example, are suffering the effect of competition from China. But Thule appears to occupy its premium position without serious threat.
Car firms do periodically try to chisel at its market lead. JLR is the latest to promise a big push into the space, particularly via its Defender brand. But generally no one has managed to really bite into the market.
Why? It’s hard to say. But perhaps when you’re buying a bike rack, roof tent or dog carrier, you know it’s going to do you 10 years so you splash out on a brand you’ve heard of.
Thule even cashed in on global instability, with boss Mattias Ankarberg telling investors that more people are holidaying closer to home this year, “which is typically positive for Thule”.
It’s not all rosy. Thule has been hit by the same rising raw material prices as car firms. Ankarberg flagged a 2.5% price increase for his products coming in August.
There’s probably not much for car companies to learn from Thule’s continued imperviousness to global price destructive trends in automotive. But it might be comforting to hear that not everything is falling under the China steamroller.
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