Warm December Hurts Remote Starter Sales
By Amy Gilroy -- TWICE, 2/26/2007
NEW YORK — Unusually warm weather from November through January in the Northeast and elsewhere put a crimp in the remote-starter selling season and created some price erosion.
With temperatures above 60 degrees in November and December in New England, sales at some retailers dropped off by 20 percent, which lead to excess supplier inventories and some price cutting at the low end, industry members said.
Sales for the season, however, were bolstered by a solid Christmas, as remote starters have become a popular gift item in colder climates, despite fluctuations in the weather. A cold snap in February is also helping the season, but some retailers said the change in weather came too late to have a big impact.
Great Northern, Burlington, Vt., said sales are down 10 percent to 12 percent for the season, while Sound FX, West Warwick, R.I., said sales are down in units but slightly up in dollars; Radio City, Auburn, Maine, expects to finish the season slightly ahead.
Other retailers reported 20 percent declines.
Great Northern VP John Gunther said sales are picking up due to recent cold weather, but he still expects to be down for the winter, "because typically remote-start sales start slowing down by the second or third week in February. It's the same this year with winter coats. People figure they got by January without a new one and they figure they can wait until next year."
Jo-Di's Sound Centers, Hartford, Conn., summed up the season by saying, "I wouldn't say it was horrific, but it wasn't good. You didn't have the before-Christmas sales," according to GM Steve Laplante.
On the supplier side, Audiovox said its Prestige retail sales were slightly up due to adding new accounts and that it expects a strong February and March. Code Alarm sales were up a strong 30 percent in units and dollars, said Audiovox while expediter and new car dealer sales for the Pursuit line were flat. Auto Page reported flat sales, and FirsTech, which sells Compustar remote starters, said sales are flat or slightly up. Directed would not comment on fourth-quarter sales until next month.
Several companies were said to lower prices on remote starters down to $149 or $159 installed. Similar models sold for $219 or $229 last year, said industry members.
"The information I got, was that a lot of companies had CES specials and much lower prices on entry-level remote starters. A lot of companies brought in inventory in the fall and it was still sitting there in January. But the two-way models are holding their price," said Michael Northup, sales and marketing VP for Auto Page.
Others said there could be further price erosion in March, depending on the outcome of the seasons.
Retailer Sound FX said it kept dollar volume up this year by daring to raise prices during the peak selling period, since by December and January the installation bays are usually overbooked. "We kept the leader price at $159 installed and boosted pricing 5 or 10 percent for the peripherals like keyless entry. We also purchased better this year as we're seeing a very strong competition for our dollars from the manufacturers," said owner Steve Madeiros.
