Slower SUV Sales Impact Car Stereo

-- TWICE, 9/5/2008 10:42:00 AM

New York — As SUV sales nosedive, they are causing shifts in the car stereo aftermarket, particularly in sales of backseat video products, larger head units and backup cameras, suppliers said.

According to Automotive News, SUV sales fell 31 percent during the first half of the year and pick-up truck sales fell 22.5 percent.

Almost every car video and car radio supplier polled by TWICE said sales were impacted, including Audiovox, Alpine, Myron & Davis, Valor and Priority Audio.

Valor said its double-DIN head unit sales are down 20 percent compared to last year. Alpine marketing VP Steve Witt said, “You can clearly start to see a slowdown in double-DIN head units overall including audio/video with navigation and without, and certainly with cameras, absolutely. It’s not really showing up in the data yet, just because of the lag time.”

Valor senior VP Doug Kern added, “We started seeing the drop as early as March or April, then a severe drop in July and August.”

Suppliers said some of the sales will be recouped, however, as car dealers try to compensate for lost profits by focusing more attention on selling accessories. Smaller cars, in particular, tend to lack premium options like navigation and rear-seat entertainment. Witt sees that as a 24-month window of opportunity for the aftermarket.

Myron & Davis said its sales were particularly impacted by the decline of larger vehicles because it specializes in custom fit video for specific vehicles such as the Nissan Armada, the Toyota Tundra and Dodge Ram trucks. It is now downsizing the overhead monitors it offers to 8.5 inches from 10 inches to accommodate smaller cars, and it’s looking at offering new custom video products for crossover vehicles instead of SUVs, said national sales manager Bob Goodman.

Makers of factory replacement radios are also shifting the vehicles they target. Priority Audio said it will move away from SUVs in favor of radios designed for the Toyota Corolla and for Honda, Hyundai and Kia vehicles.

The company said the radio it currently produces for the H3 (Hummer) has seen a 70 percent decline in sales from last year.