In states hit hard by Hurricane Sandy, sales of car audio products have dropped off by 30 to 50 percent, according to leading distributors, reps and local retailers.
Dealers lost power and shuttered their stores for days. Consumer trips to any store were hindered by gas rationing in NY and NJ.
Consumers that might be in the market for a remote starter or early Christmas bargains were preoccupied with cleaning up downed trees and repairing homes. The storm caused as much as $50 billion in damage, not to mention the loss of over a hundred lives.
Some industry members don’t expect a return to normal sales until early December.
“When you can’t get gas it affects everyone…Business will be off by 50 percent,” said Larry Appleblatt of Specialty Marketing speaking for the general car audio market in states such as NJ, NY and RI. “We had a snow storm [last week]. If we didn’t have the hurricane that would have brought out people to buy remote starts. But it just put another 100,000 people without power.” He added, the hurricane probably hurt the home audio market to the same degree.
Another local rep estimated the impact as a 30 percent drop in sales since the hurricane hit October 29.
A leading supplier said the 30 to 50 percent estimate in lost business is reasonable.
Phil Cartier a manufacturer’s rep for brands such as Elettromedia, Scosche, Diamond Audio and Encore said, “I’m seeing a big decrease [in car audio sales]. We had a bunch of dealers, some closed for almost 5 days because of power outages. At the end of the month, there’s usually a rush for people [dealers] to hit their rebates, but everyone just dropped off. We didn’t have the rush. And it’s also affected this month.”
A leading NE distributor, Thunderball Marketing of Avenel, NJ felt the pain of the hurricane first-hand as it was flooded with with 40 inches of water. Thunderball’s Alan Henslovitz, said “People have other priorities: food, clothing…”
Keith Lehmann of Kenwood noted that after Hurricane Katerina, some retailers saw a big rebound in business once consumers’ insurance checks came in. “Historically, in the wake of a natural disaster, there is obviously going to be a lot of disruption, but the potential for increased business is there due to insurance companies paying off on claims. The dealers need to be aware of this…”
Retail sales in general were hurt by Sandy, falling 0.3 percent in November. The New York Times reported that consumers may also be hesitant to spend due to uncertainty about a looming “fiscal cliff” in the event that Congress is unable to reach an accord on taxes.
But car makers blamed Sandy for bringing sales to a screeching halt late last month. Sales fell short by 20,000 to 30,000 vehicles, they said.
The New York Times noted, “Economists expect the storm could shave as much as half a percentage point from economic growth in the fourth quarter. Any lost activity, however, could be made up early next year.”
Car electronics industry members are still hoping for a strong remote start season as a cold winter is expected in the Northeast.
Source: CEoutlook, The New York Times