Cautious Optimism For Remote Start

By Amy Gilroy On Sep 11 2006 - 6:00am

As temperatures begin to dip into the 60s in Northern states, and the remote start selling season approaches, the industry is cautiously upbeat about the season.

Suppliers said they are expecting growth this year, after generally flat sales last year.

The market appears to be pulled in several directions, variously favorable and unfavorable, said industry members.

On the plus side, car companies continue to offer remote start in new cars which helps promote awareness. In addition, the market is benefiting from repeat business as consumers who owned a remote start and buy a new car; tend to want to replace it.

On the minus side, OEM penetration could increase to a point in the future that cuts into aftermarket sales.

CEA, which measures sales to retailers of combined remote start and security products, recently issued a mid-year report showing sales in the combined category as steadily declining from $253 million in 2005 to $250 million in 2006 and $249 million in 2007.

Retailers and suppliers say the category is very hard to predict as it is chiefly tied to the weather.

“It's the only category we sell that is dependent on the weather and doesn't follow regular industry or economy trends,” said Mark Gebeloff, owner of Action Electronics in Newington, Conn.

He noted the products are not just tied to the cold but to how early the cold sets in. “Remote start is very labor intensive, so you can only install so many. If it doesn't get cold until mid-November, it's a short season.”

Last year, industry members agreed the season was cut short due to a warm January.

Steve Laplante, GM of Jo-Di's Sound Centers, Hartford, Conn., agreed the category is hard to predict. He is concerned higher gas prices may lead people to feel they are wasting gas by warming up their cars with a remote starter. “People in this area are riding bicycles and driving motorcycles because they want save money on gas,” said Laplante. In addition, he wonders if OEM sales will eventually cut into the aftermarket. Overall for this year, Laplante said, “I'm nervous, but I'm really hoping it will be as good as last year or a little bit better.”

Gebeloff said he is ordering for ten percent above last year's sales.

Some New England retailers said the category represents up to 75 percent of their 12-volt sales in winter months.

At present, industry members said the impact from OEM sales is minimal. Many of the units are installed as factory options at the car dealer and car dealers tend to prefer the aftermarket models because they offer longer range, said Audiovox national sales manager for vehicle security Thom Balistrieri, echoing other suppliers.

Factory remote starters currently offer only a 500-foot range, which in a crowded parking lot might deliver a true range of only 150 feet, they said.

“Long term, possibly, [OEM] could have an impact, but right now; it's not a big deal. Remote start is still very new. It hasn't caught on yet in the warmer states where you could start your car to cool it in 120 degree weather,” said Balistrieri.

Among the new vehicles now offering remote start for 2007 are the Chevy Tahoe, GMC Yukon, Cadillac Escalade, Chevy Suburban and Toyota Camry.