Vendors Retool Lines To Combat Sales Slump

In response to slower sales in autosound, some suppliers are drastically revamping their product lines, although changes will not be seen before 2005.

A lingering sales decline, competition from other hot product categories and the increased OEM penetration of CD players is causing suppliers to look at new product configurations and features. (See TWICE, Sept. 29, p. 32)

Panasonic said new products might include Bluetooth, hard-drive devices (HDDs) or wireless communications, according to national marketing manager Rob Lopez.

Alpine marketing VP Stephen Witt said, "Given all the data from consumer behavior, consumer adoption of technologies, and automotive infrastructure inside the car, our industry definitely needs some very advanced concepts in new product development."

While claiming it was too early to divulge new concepts, Witt said, "Alpine is pushing for significant innovation in OEM connectivity and a more flexible system architecture. We're looking into Bluetooth, into WiFi and into data delivery through satellite."

Even retailers are suggesting product revisions. Steve Hadaad, president of Music Systems in El Paso, Texas, said he would like to see a Bluetooth-enabled head unit that could mount anywhere in the car but operate in concert with an OEM CD player without tampering with it. He said that simply dropping prices on existing product wouldn't help. "What's the advantage of a cheaper radio if you already have one in your car. Nothing. Only two things will motivate someone now," he said, citing failure of one's current OEM CD player or seeing new features that are not on the factory units.

The 2004 lines are not expected to offer any major innovation breakthroughs. At present, many suppliers are battling the 11 percent year-to-date slowdown with special promotions.

Pioneer and Alpine are reportedly offering Special Performance Allotments and Panasonic said it was offering a consumer rebate in July rather than the fall, as it has in the past.

"There are a lot of deals already out there," said Joe Cavanaugh, president of Stereo West, Omaha, Neb. He said suppliers are packaging amplifiers and woofers with discounts up to 30 percent. "Virtually all our key manufacturers are offering something," he said. "The concern that I have is that manufacturers, in desperation, will turn to the Internet to dump their products."

To add to the confusion, suppliers say that they have trimmed their forecasts for the fourth quarter, so if Christmas sales are strong, dealers can expect shortages.

"It's been an impossible year to predict," said former Kenwood sales and marketing VP Bob Law who recently joined Sirius. "The general trend continues to be down, but it changes from month to month. And unfortunately, as a manufacturer, we have to plan three to four months in advance."

Predictions on Christmas are all over the map. Panasonic said it planned for a year on a par with last year but JVC, while enhancing its position in car audio, was not optimistic. "I don't see a good Christmas right now," said JVC sales VP Tom Coronia.