Rockford Fosgate Dealers Upbeat On Nissan Deal
By Amy Gilroy -- TWICE, 2/12/2001
TEMPE, ARIZ. -Rockford Fosgate dealers gave the company's recent agreement with Nissan a general thumbs up, as the deal is structured to include aftermarket retailers through residual sales.
Rockford Fosgate announced last month that in its first OEM deal it will supply full car audio systems for three Nissan vehicles-the Xterra SUV, the Frontier truck and a new Sentra SE-R sports sedan-starting this summer.
What was unusual about the program is that Rockford dealers will receive add-on products for the OE systems (such as a powered subwoofers) which are exclusive to the aftermarket, said the company. In addition, they will receive customer lists from Nissan so they can promote the upgrades through direct mailings.
Rockford claims retailers will benefit from the program through advertising, as well, although at press time a Nissan spokesman said that advertising plans had not been determined.
Several retailers compared the program to a 1999 Audiovox promotion with Nissan that helped bring new mobile video customers into the aftermarket. Under that program, anyone who purchased a Nissan Quest van could receive a free video overhead console if they went to an Audiovox retailer to have it installed. Audiovox said that it is looking to offer similar deals in the future.
Several dealers called the Rockford Fosgate program a win/win situation.
Charlie Weisel, owner of The Specialists, Tucson, Ariz., said, "I think it's good exposure for Rockford and a good way to channel customers our way. I like it a lot. Nissan and Audiovox did a video package, and we were the installation facility for it and we got a few customers. Anything that brings customers into our door and we don't have to spend money is a plus."
Robert Graham, president of Breakers Mobile Electronics, Oxnard, Calif., said, "I don't see any downside. The amp Rockford is using is a little silver amp you can't see that has some bypass low-level RCA jacks so we can hook it into our amps. They can advertise that Nissan now has a Punch Power. The only downside is if that person who bought a truck would have come here to buy a system. But I'm sure if he wanted to, he would buy the truck without the system and then he would have come here. I bet when you turn on the Rockford Nissan system you know it's a factory unit."
Jodi DiFazio, general manager of Jodi's, Hartford, Conn., said she's looking forward to the Nissan advertising, and "if they put it in the Nissan ads, it will be fantastic. It's good for the Rockford name to get cross-promoted, and they are also supposed to provide us with lists from Nissan on who buys the products so we can do a direct mailing."
Not every dealer was pleased with the Nissan deal.
Bill McDowell, owner of Wild Bill's Electronics, Boaz, Ala., said, "I have mixed feelings. It's taking away the fact that it's something special that you can only go to a good specialist to get. Of course, I can't say that,' cause they are in Best Buy. But maybe others who have bought these cars will see that there's more to the aftermarket. I can bet you there won't be much difference between what they are selling to Nissan and to us."
The Rockford OEM systems for Nissan will include a six-disc CD changer or single CD, and a 72-watt amplifier, plus 6.5-inch front-door speakers and 25mm tweeters. At least one of the systems will have an 8-inch powered subwoofer.
Said a Rockford spokesman, "We will provide the final signoff signature for approval of the system. The national exposure from a print and possibly a TV campaign will help build the Rockford brand."
The Rockford systems mark one of several new deals with car companies that are trying to personalize cars aimed to certain demographics and are seeking out brand names that match these demographics. Other recent deals include Sony and Ford, Kenwood and Mazda, and McIntosh and Subaru.
Don Courvisier, Sony VP/general manager mobile communications automotive OEM, said the 7,000 Sony limited-edition Ford Focus vehicles sold out in 60 to 90 days last year, and the company is looking to do other promotions with Ford.
Audiovox claimed that through its Quest promotion, 45,000 EZ fit center video consoles were installed in Nissan Quest vans through its dealers in 1999 and that the program was a great success.
"We paid the dealers a fixed fee [$75] that would cover their expenses for the installation, and we gave the dealers upgrade accessories they could sell-an FM modulator, additional headphones and a trunk release kit-to make some additional profits. It went off flawlessly," said Tom Malone, senior VP of sales at Audiovox Electronics Corp. "We really had no complaints from about 600 dealers. Only two or three dropped out, which is a fantastic success rate."
Audiovox said the dealers profited because they developed a relationship with the Nissan dealer, and they could make a profit on the accessories and win new customers.
While OEM/aftermarket deals are on the rise as Detroit moves to "personalize" its cars, it remains to be seen if more of these deals will be structured to include aftermarket retailers.
Detroit is moving to personalize vehicles in batches of 25,000 to appeal to certain groups, and they can't react fast enough to new trends, Malone claimed. "The product we supplied for Quest would have taken two years for Nissan to deliver, and we did it in three months."
James Thomson, Rockford Fosgate VP of finance/chief financial officer, said, "It was Nissan who approached us. The younger engineers came to Rockford because they know us. They did the market research to show how strong the brand is and got it approved.
"The era of Detroit's producing a million 6 x 9s is going away. Now they are segmenting 10,000- to 15,000-unit vehicles like the Sentra Hot Rod. They target a market and research what sells to these people."
