12V Sales Fall Faster Than Predicted; Single CD Drops 18 Percent

By Amy Gilroy On Sep 4 2006 - 6:00am

Sales of in-dash CD players — the industry's key breadwinner — are declining more rapidly than anticipated, causing some suppliers to push new technology to market more quickly, according to vendors.

While industry members had expected single CD player sales to drop by 8-13 percent, CD player sales to consumers in the first half fell 18.4 percent in dollars, according to the NPD Group, and the Consumer Electronics Association expects sales to dealers to decline by 17 percent in dollars and 10 percent in units for the full year.

Panasonic, Jensen, Pioneer and Clarion agreed that CD sales are falling more rapidly than predicted. Clarion senior VP Ralf Engelbrecht noted the company had expected declines in the “the low teens” and Jensen VP mobile audio Ray Leek had forecast declines of between 8-10 percent.

The steeper declines are attributed variously to higher gas prices, OEM integration problems, kids spending their discretionary income on iPods and the overall economy, said suppliers.

As a result, Panasonic said, “We're re-evaluating our technology roadmap and, in some cases, we're looking at moving up the introduction of new product and new technologies sooner than what we anticipated,” said Rob Lopez, Panasonic's mobile entertainment group director

He expects that the industry will see head units with front panel auxiliary inputs at lower price points next year. These provide an inexpensive, convenient way for consumers to plug their iPods into their car stereos.

Leek also said that front panel aux inputs on CD players at $100 and below will become prevalent.

“The decline in single CD is slightly higher than we anticipated,” said Larry Rougas, Pioneer's marketing and product planning VP for the mobile division. The company responded earlier in the year by lowering prices.

Overall, Car audio sales overall will fall more steeply in 2006 than originally forecast, said the Consumer Electronics Association. (CEA)

While CEA predicted in January that industry shipments would total $2.188 billion this year, it now expects aftermarket sales to retailers to decline to $2.059 billion for 2006, the industry's lowest total since 2001.

In its new mid-year report, CEA stated that while aftermarket growth opportunities exist in OE integration and satellite radio, “these budding markets will not be enough to prevent aggregate revenues from slipping below $2 billion by 2009 as head unit shipments steadily decline.”

CEA said aftermarket 12-volt sales will decline further to $2.036 billion in 2007. By contrast sales of OEM equipment in new cars will gain, reaching $4.8 billion in 2006, and $5.6 billion in 2007, up from $4.3 billion in 2005.

In the aftermarket, amplifier sales will decline in dollar shipments to dealers by six percent, but speakers should be up by one percent because of a 41 percent increase expected this year in sales of enclosed speakers, said CEA. Sales of plug and play and black box satellite radio tuners are expected to decline from $447 million to $432 million in 2006 but then rise to an all-time high of $470 million in 2007.

CEA is now tracking the category of OEM integration units (including MP3 and iPod integration kits) and is forecasting a 90 percent increase in sales of these products up from $15 million in 2005 to $29 million in 2006.

Alert to All Users of the Disqus commenting system:

Because of a recent global security issue, the Disqus website recommends that all users change their Disqus passwords. Heres a URL about the issue:









Enjoy the greatest pictures taken from famous shows and events this year.

Current Issue


This TWICE webinar,  hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.