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Car Stereo Sales Hit A Distressing Low Note
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Written by Mark C. Hammond   
Tuesday, 14 July 2009
The iPod generation is taking some of the thump-thump out of car audio sales.

While younger owners add accessories to improve their cars' looks, such as flashy rims and performance tires, fewer are opting for better sound inside.

This year, spending on aftermarket car stereo systems is expected to slip 28% from 2006, the Consumer Electronics Association reports. The category includes everything from CD changers and speakers to satellite radio.

The industry is looking to fight back.

"We need to make car audio cool again," said Pioneer Electronics Vice President Larry Rougas at a recent industry summit here aimed at addressing the sales slump.

The troubles underscored how the market is evolving.

A generation ago, most young drivers wouldn't consider their rides officially "pimped" until they invested in a blasting, soul stirring stereo system. Makers such as Pioneer, Kenwood and Alpine were household names.

It was "a golden time to be in this business," says Bill Matthies of research firm Coyote Insight.

Today, one in three motorists can't name a single car stereo maker, the firm found. Its survey of 552 drivers found that about half feel their car's factory installed stereo is good enough. And about half don't plan to buy any aftermarket electronics in the next two years, according to Coyote Insight.

Apple's iPod and the desire for music portability trump sound quality for many in the industry's traditional 16 to 24 year old target market. Many tap their digital player into the car system via lower quality FM modulators that are cheaper than the hard wired connections of the aftermarket stereos that the industry promotes.

"The customer has changed," CEA spokeswoman Jennifer Bemisderfer says.

To the lure them back, the industry is moving to:

*Broaden product lines. Car stereo makers and retailers are selling a wider variety of vehicle electronics, from navigation devices to backseat video. "Take your life with you" when you get behind the wheel, says Mike Kahn, marketing director for Sony's mobile electronics.

Aftermarket portable navigation sales alone grew 136% from January to May this year vs. the same period last year, researcher NPD reports.

*Appeal to older drivers, not just the youth. Today, "The target audience is anyone who breathes and drives a car," says Barry Vogel, president of the Mobile Enhancement Retailers Association, a trade group. "If we limited the market to that 16 to 24 (year old) that we oh so loved," the industry will miss out.

*Demystify the jargon. The days of confusing stereo terms woofers, tweeters and frequency response is giving way to simplicity. "We over explain," Rougas says.

Despite falling sales, industry executives predict a rebound. "The industry can and will work together to solve this problem," says Stephen Witt, vice president of Alpine Electronics.
Last Updated ( Tuesday, 14 July 2009 )