Car Stereo Prices Could Rise 5-10%

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Even before an earthquake and tsunami struck Japan, prices for car stereo products were on the rise. We know of four suppliers who raised prices this year and three others who are considering raising prices in 2011.

car audio may see price increasesComponent parts using rare earth metal like copper and aluminum have gone up in price by six percent or higher. Many car amplifiers use aluminum heat sinks, and may use copper and brass connectors. Speakers may use copper voice coils,  aluminum baskets and neodymium magnets.

Rockford Fosgate addressed the issue by entering new higher price brackets for its 2011 lineup. JL Audio hiked prices slightly on some models as of March 1.
An amp and speaker supplier said his parts cost rose 6 to 8 percent late last year and he expects another 6 to 8 percent increase soon. “When you have for example a 6.5 inch pair of speakers that wholesale for $12.00, it’s hard to absorb,” he explained.

Currency fluctuations are adding to the pressure as the Japanese yen is down to around 79 from 90 earlier and the yuan is also lower. “If the Japanese Yen holds at 79, you can expect more increases,” said a major Japanese supplier, who, like others, preferred to speak anonymously on the subject.

prices for copper and other metals on riseOn top of these dynamics, car stereo parts are expected to be shorter supply in Japan. A recent statement from Alpine explains that “a number” of its suppliers “appear to have suffered significant damage to their operations” from the earthquake. It added, “We will continue with our investigations, however some level of difficulty in procuring parts can be expected.”

Even those suppliers who refrain from raising prices this year are expected to introduce 2012 products at prices which may be 5 to 10 higher.  This may have the beneficial effect of halting the usual price erosion on consumer electronics goods.

Source: CEoutlook

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6 Comments

  1. I agree that pricing needs to go up (along with dealer profit!) Unfortunately we as retailers have created a society that shop based mainly on price. How many times have we been asked “will this be going on sale?) I believe retail as a whole needs to remember how to sell on quality and not solely on price. It’s a dream, I know, but everyone needs a dream.

  2. “When you have for example a 6.5 inch pair of speakers that wholesale for $12.00, it’s hard to absorb,” WOW! We don’t need that kind of junk in our Industry. I’m hoping he sells his $12 speakers to the OEM’s in the Auto Industry and that both he and the manufacturers have to absorb disproportionately large cost increases. Couldn’t happen to a nicer group of people.

  3. Car audio has become extremely inexpensive, (very few profit dollaes) yet entry level units from kenwood, pioneer, and alpine seem to work fine and have an almost non existent failure rate. Irony is that it is cheaper to buy a new head unit than an ipod interface. if prices go up, it would be nice to have head units that had a nicer feel and more elegant cosmetics.

  4. I love the idea of higer prices! I also am sick of this race to zero that all these companys are in. You should not be able to buy a head unit full of features for $99-139. Give the consumer a reason to spend more money.

  5. It is our responsibility as a specialty retailer to not stock or support these low end items in our establishments. All it does is encourage more cheap junk to be made. I use those two words intentionally. At a certain point there has to be so many corners cut that the product is no longer reliable just to hit a low price point. What this does is give a bad image for our industry as a whole of what we have to “offer”. If the factory options are better and more reliable then ours then what are we here for? Get a true sale staff and sell great products and leave the other junk for the flea markets and pawn shops.

  6. Car audio prices have dropped too low in recent years. Cheap = No value. Price was never the issue in the first place. This would be the PERFECT time to increase gross margins for retailers as well! I am sick of every manufacturer telling me to use their low gross product to sell other products. Does anyone besides me see the flaw in that thinking??

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