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J.D. Power Survey Shows OEM Satellite Radio Gains

2/25/2009 01:16:00 PM Eastern

Westlake Village, Calif. — Satellite-radio usage in the car is growing, but in-car HD Radio usage has a way to go to keep pace, a J.D. Power and Associates survey shows.

In a 2008 survey of 19,000 consumers who say they purchased or leased a new vehicle in the past five years, almost 31 percent said they have satellite radio in their car, J.D. Power said. That’s up from 23 percent in a 2007 survey and 19 percent in a 2006 survey. The figures reflect consumers who have active satellite-radio subscriptions in their vehicle, whether they are paying for the subscription or are using a free trial subscription.

Because the responses are from consumers, the percentages might not exactly match what the automakers or satellite-radio companies are providing, but “the trend lines are accurate,” a spokesman said.

J.D. Power conducts independent surveys of customer satisfaction, product quality and buyer behavior.

HD Radio’s penetration was about 5 percent in the 2008 survey but promises to go up with announcements by multiple automakers to include HD Radio as factory-installed standard equipment or as a factory option. The percentages in 2007 and 2006 were 7 percent and 3 percent, respectively.

Most of the consumers obtained their satellite radio or HD Radio from the automaker, and the percentage was up from previous years, the survey also found. Almost 77 percent of the surveyed people who have in-car satellite radio said the satellite tuner came with the car when it was purchased or leased. That’s up from 58 percent and 59 percent in 2007 and 2006, respectively. Another 8 percent said it was built into a car stereo that they had installed after the vehicle was purchased or leased, down from 18 percent during the previous survey. Usage of transportable plug-and-play units was also on the decline, with 15 percent saying they listen to a transportable unit. That’s down from almost 24 percent in the previous survey.

In part because of the automakers’ dominant satellite-radio position, satellite-radio sales through retail outlets have fallen dramatically, CEA statistics show. Factory-level sales of satellite radio to dealers peaked in 2005 at $447 million and slipped every year after that through 2008, when sales dropped to an estimated $91 million, preliminary Consumer Electronics Association statistics show.

Other statistics point to the dominance of OEM products in the satellite-radio market. In 2006, the majority of XM’s net new subscriber growth came for the first time through automakers and car rental companies. In 2007, Sirius followed with a majority of its net new subscribers coming through automakers, not including car rental companies.

Among owners of car HD Radio, the percentage of users getting their HD Radio from the new-vehicle factory rose markedly in the 2008 survey at the expense of car-dealer installs and retail-aftermarket sales. Among the 5 percent of vehicles with HD Radio, 55 percent were equipped with factory-installed HD Radio, up from the previous poll’s 22 percent. Car-dealer installs went down to 7 percent from almost 36 percent, while the share held by automotive specialty stores and other retail outlets fell to 26 percent from 34 percent.