High End Audio Riding High

By Amy Gilroy -- TWICE, 9/4/2000

The high-end car audio market is experiencing a resurgence, with some suppliers claiming gains of more than 100 percent this year.

Retailers, too, say they are adding new high-end lines and that business in speakers over $300 per pair, amplifiers over $500 and head units over $400 is up more than 10 percent.

Ovation, Indianapolis, Myer Emco, Gaithersburg, Md., and Audio Advisors, West Palm Beach, Fla., all said high-end sales were up 10-12 percent this year over last.

"We noticed it late in the fourth quarter last year, but it has been ramping up ever since," said Ovation buyer Russ Cunningham. "I think it's a direct result of video being such a big part of our overall mix. We're selling a lot of head units at $400 and above because they have the audio inputs already to support a video system."

Kelly McDaniel, buyer for Al & Ed's, Monterey Park, Calif., said high-end sales have been up since January. "Mobile video has been doing well, so it has been driving some of the higher-end audio sales. We've also been targeting the younger demographic more, and they don't have mortgage payments."

Dan Jeancola, buyer for Sound Advice, Dania, Fla., said other new technologies are also driving sales. "Any time there's new toys such as navigation and multimedia, it generates excitement and people want to come in. And that's strong now because of the economy. The last exciting thing to hit car audio was compact disc in 1984, and now, all of a sudden, you have navigation, multimedia, and next year, digital radio."

Suppliers say retailers are also looking more to the bottom line and searching out high-profit lines.

"We're strictly a high-end niche line, and our sales are up over 120 percent," said Gary Kovner, president of Kove Audio, Calabasas, Calif.. "We're having huge growth, and we're getting a lot of new dealers.

"I think one of the reasons this category is growing is that dealers are realizing they can't live on the 30 to 35 points offered by the big brands. We offer 50 percent, so the dealers are turning to us. The other thing that is hurting the dealer is the reduction in price of CD head units, so it's pushed the dealers to look for new profit."

Keith Lehmann, president of MB Quart, Walpole, Mass., said retailers have always been looking for better profits. "That's been an ongoing issue. But the dealers are now getting better at qualifying and closing customers. MERA has something to do with that, and we as manufacturers are getting better at top-down promoting."

Illusion Audio, which has been in the market for three years, said its sales have tripled since last year. Headed by Cary Christie II, son of the founder of Infinity, the Tempe, Ariz.-based company now claims 100 dealers nationwide. "The only thing limiting our sales right now," said sales manager Scott Erickson, "is the private financing of a young company."

Focal said its sales are up 150 percent since last year. The Agoura, Calif.-based vendor launched a new speaker line in January and claims sales have well exceeded expectations. "We were a little concerned that a 6-inch, two-way at $1,000 a pair would scare people away," said national sales manager Jesse McKinley, "but it just raised the bar in price and performance."

Image Dynamics, Torrance, Calif., said sales continue to increase at a rate of 30 percent annually, and R/T Enterprises, Kelso, Wash., said sales for its Obcon line are up 20 percent.