SUV Slump Hits Car Stereo Aftermarket
By Amy Gilroy -- TWICE, 9/15/2008
NEW YORK — The car stereo aftermarket has managed well during downturns in car sales in the past, but the 30 percent drop in SUV sales this year has taken a toll on aftermarket backseat video products, double-DIN head units and backup cameras, suppliers said.
According to Automotive News, SUV sales fell 31 percent during the first half of the year and pickup truck sales fell 22.5 percent.
Almost every supplier polled by TWICE said certain car stereo sales were hurt, including Audiovox, Alpine, Myron & Davis, Valor and Priority Audio.
In addition, Directed Electronics said it is leaving the mobile video market (see story below).
Valor's double-DIN head unit sales are down 20 percent compared with last year, said the company, noting many SUVs and trucks have double-DIN, rather than single-DIN, openings. "We started seeing the drop as early as March or April, then a severe drop in July and August," said senior VP Doug Kern.
Myron & Davis said its sales were particularly impacted because it specializes in custom-fit video often aimed at SUV and truck models such as the Nissan Armada, Toyota Tundra and Dodge Ram.
Some of the sales may be recouped, said suppliers, as car dealers try to compensate for lost profits by focusing more attention on selling accessories. Also, car makers have overlooked smaller vehicles when it comes to options such as navigation and rear-seat video, but now these smaller cars are gaining popularity, creating a 24-month window of opportunity for the aftermarket, said Alpine.
Myron & Davis national sales manager Bob Goodman added that rear-seat entertainment is taking a second hit from market conditions because more car makers are introducing active headrest systems that are more difficult to outfit with headrest video monitors.
The company is responding in two ways. It is moving to the front seat of the vehicle by introducing this fall factory "look-a-like" OEM replacement head units for the Toyota Camry, Honda CRV and most Volkswagen models. The in-dash head units will offer Bluetooth, XM or Sirius, and iPod control. A universal version that fits any car will also be introduced, said Goodman.
Myron & Davis is also looking into offering rear-seat video for crossover vehicles instead of large SUVs and looking into universal video solutions. It may also shift to smaller overhead monitors with 8.5-inch screens vs. the10-inch screens of the past.
Valor is hoping to counter the downslide in double-DIN navigation by lowering prices and gaining market share. The company will ship this month the double-DIN NVG-606W announced in January at one of the lowest street prices of $599 to $699. The all-in-one A/V navigation (AVN) head unit has a 6.5-inch touchscreen with front-panel USB and aux-in jacks, as well as iPod control and charging with an optional cable. It does not include satellite radio capability or multizone operation.
Valor said the unit will be joined in November by a single-DIN all-in-one version with 7-inch flip-up screen, also at an estimated $599 aggressive price point.
Some car stereo executives said they believe sales will pick up after the election, which tends to be a time of consumer uncertainty, particularly in a climate of higher gas prices and home mortgage concerns.
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