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Car Audio Prospects Look Upbeat In 1st Half

New York – After two years of declines in core autosound products, some industry members say there is cause for optimism for a strong first half this year.

January sales were up by many accounts, with some industry members seeing a “renewed interest” in autosound. Demand for the Apple iPod is also translating into improved CD receiver sales, by some accounts.

John Durbin, car audio product manager for Directed said, “It’s a little early to tell but we’ve gotten off to a pretty strong start.”

Alpine reported a record January and is already in back-order on many receivers. “It’s just flooring us because we thought we were really ready,” said marketing VP Stephen Witt. Step-up CD receivers over $250 are moving exceptionally well because of the iPod-ready feature, he said, noting that Alpine hopes to be out of back-order by the time this issue goes to press.

At Kenwood, “We’re definitely seeing a resurgence in audio sales, in in-dash CD, amplifiers, speakers and woofers,” said car electronics VP Keith Lehmann.

He noted that Kenwood’s dealers are seeing a car audio resurgence. “They are extremely bullish on the first six months of the year. Our first quarter is looking extremely promising versus last year, which was better than the year before. A lot of the growth is in audio, not to say that video is bad, but its hit a plateau in some ways as price erosion continues to take its toll. Navigation has continued to be a shining star — and this is step-up navigation — as awareness increases and as dealers learn how to sell a more expensive product.”

A TWICE poll of retailers found that the majority are expecting gains this half either in core car audio, in new categories, or both.

“We feel it is going to be a very strong year because of some key products [such as] real-time traffic navigation through Pioneer, and some vehicle integration products from some vendors that allow us to work more with head units,” said John Haynes, product manager for Al & Ed’s Autosound, based in Van Nuys, Calif. “There will probably be a decline in head unit sales but we believe we are going to be successful in increasing amplifiers and subwoofers as we move further and further into vehicle integration,” he added.

Bucking the industry trend, Omaha, Neb.-based Stereo West said it is seeing double-digit increases in its head unit sales. Owner Joe Cavanaugh, said, “A lot of customers are coming in with the idea of wanting to integrate their iPods with CD players. So we’re selling them units with auxiliary inputs or the specific interfaces such as those offered by Alpine.” He added that “satellite radio continues to be a very positive force on head units now that we’re getting units with tuners built in.”

At least one retailer claims that “tuners” are now returning to car audio. Mark Miller, owner of Westminster Speed & Sound in Westminster, Md., claimed, “A lot of the kids are tired of getting hassled [by police] about their tail light and loud exhaust, so they are going back to stereo equipment.” Miller said he was able to significantly boost core car audio sales last year by rearranging his demo boards to A-B an aftermarket CD player against stock vs. upgrade speakers. Most customers will add upgrade speakers after hearing the difference, he said, “even if they just listen to AM.”

“We screwed ourselves. I built a mobile video display and put a whole bunch of focus on it and remote start. But it derailed my focus on my core business which is the most profitable side of the store,” Miller said, noting, “2004 was the biggest year we’ve had, because I put the focus back on it.” Miller will lead a seminar on this topic at the MERA Knowledgefest in Louisville, Kent. month.

Traffic Jam, Campbellsville, Kent., said January was strong, but due only to heavy promoting, according to president David Hall.