By Lisa Johnston
New products on display at the American International Toy Fair, held in N
NEW YORK – The challenges facing the car electronics aftermarket are well-known, but the industry has persevered by making its products more relevant to consumers for whom the Internet and smartphones are their primary music sources.
Other opportunities have also arisen, whether its factory-look (or factory-fit) aftermarket navigation systems, A/V multimedia head units, interface modules that preserve factory-infotainment functionality when aftermarket head units are added, or OEMupgrade amps and speakers.
Here’s what a sampling of leading car-A/V suppliers have to say about the market’s performance in 2012 and the outlook for 2013.
TWICE: How did the combined mobile audio, mobile-A/V and navigation aftermarkets fare in 2012 at the retail level in unit and dollar volume? What is the outlook for 2013?
Mike Anderson, Alpine Electronics of America: The total aftermarket industry business was down in 2012, measured by units or dollars. Alpine has experienced some growth in key two-DIN categories, and we feel poised for a successful 2013. Growth in these categories will not be easy since price points are declining without the critical mass of consumers seeking to buy that would offset the reduced average selling price (ASP).
Keith Lehmann, Kenwood USA: Our dealers saw steadiness in the market compared to years past. This was brought on by the increased sales of audio products, and with labor attachment being a key focus, many dealers saw decent profitability and a slight rise in ASP. We view the increased ownership of smartphones to reach a critical mass in 2013, and wise retailers will master the art of instore connectivity demonstration as a way to convert customers from browsing to buying.
The poor economy coupled with high gas prices and long-term unemployment have clearly been the industry’ greatest challenge. Our products are generally purchased with discretionary dollars, which have been restricted as consumers are forced to choose necessary purchases over those that are deemed not necessary. Whether this changes in 2013 is highly dependent on whether the economy gets back to historical growth, and this won’t happen until people get back to work.
Allen Gharapetian, Clarion: For the market overall (not just Clarion), we estimate all aftermarket categories combined will have remained steady in 2012 at the retail level with nearly no change based on units sold while experiencing a 3.5 percent dollar decline as a result of decreasing average selling prices in amps, speakers and navigation-only systems. The outlook in 2013 remains similar, but with expected popularity and market share growth of mech-less models and in-dash A/V centers.
Challenges for 2013 remain similar to 2012 with tierone manufacturers looking to add more smartphone and Cloud-based connectivity features and providing consumers with compelling reasons to upgrade their existing aftermarket units or replacing their aging OEMinstalled units.
Larry Rougas, Pioneer: Overall, 2012 has been positive regarding unit and dollar volume, although some categories outperformed others. DVD receivers lead the growth category for Pioneer with double-digit growth. We expect to see continued growth of key categories, such as DVD receivers and smartphone-integration products throughout 2013.
TWICE: What were the aftermarket’s greatest challenges in 2012, and will that change in 2013?
Rougas: The diversity between smartphone operating systems and hardware manufacturers continues to be our greatest challenge, but it’s also our greatest opportunity because the consumer’s demand for connected products designed for the car is high. In 2013, we expect to see more uniform interface solutions and increased awareness from both the retailer and consumer.
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.