Car audio and the many smaller categories that now fall under that heading can no longer be easily captured in product shipment sales offered by traditional agencies such as the Consumer Electronics Association (CEA), say a growing number of industry members.
Or at least, the numbers captured don’t tell the whole story.
First, for dealers, labor is becoming an increasingly large part of their revenues. And labor is not tracked in revenue sales for the industry.
“Labor has grown as a percentage of car audio revenues over the years,” said Jim Warren Senior VP Merchandising of 50-store chain Car Toys. “Currently, at Car Toys, our labor revenue is over 20 percent of sales.” In Car Toys’ case, labor rates have remained steady but because average selling prices have dropped, labor is a greater percentage of sales.
But many retailers say they have increased their labor rates in recent years. In the past many stores discounted labor because the products were so profitable. With price competition from the Internet, now many stores discount the products and charge more for labor.
Second, the market has polarized into high end and low end product sales, according to many industry members. And low end products, including low end CD players are less likely to be tracked by the CEA simply because fewer low end suppliers report their sales to the CEA.
‘If you give the category as a whole the benefit of the doubt, there’s a whole layer of entry level product from suppliers that don’t report sales to anybody or anything,” says Steve Witt, Vice President, Mobile Audio and Advanced Accessories at Audiovox
Third, the products themselves are harder to track. The market has increasingly become a collection of niche categories. Marine audio, for example, is not tracked by The NPD Group. But it’s a growing segment of the market. Motorcycle audio is a new segment as are products for ATVs. Dealers are also increasingly making their own integration devices for iPads and iPhones, which are not tracked.
Products are also more difficult to define. Is a backup camera/car kit for a new car model that’s very difficult to retrofit, an OEM integration device or a backup camera?
We’re certainly not faulting the data collecting agencies, but merely pointing out that the car audio market is increasingly a collection of niche products that may fly under the radar of research tracking. And the true picture of the aftermarket may not be represented fully.
CEA forecasts that overall aftermarket autosound sales to dealers in 2013 will be up very slightly to $1,143 million, from an estimated $1,141 million in 2012.
First quarter sales to consumers fell 6 percent, according to the NPD Group.
Photo via Dow Electronics