12V Industry Calls For Higher Profits

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KnowledgeFest Town Hall 2013

At a Town Hall Meeting on opening night of the 2013 KnowledgeFest trade show in Dallas on Saturday, suppliers said the industry has stabilized after 7 years of shrinking and the car specialist channel now has a number of opportunities for growth.

A key  growth segment is in driver safety products such as advanced backup cameras and collision avoidance products like the Mobileye 560.

In a lively industry meeting, Audiovox’s Steve Witt said, “There will be a lot of products introduced over the next 20 months that will bring you opportunities.”

Suppliers and retailers also said the industry must stop the race to zero in profits.

Kenwood’s Keith Lehmann said falling average selling prices (ASPs) have escalated recently.  “We’ve seen ASPs drop remarkably over the last 30 days.  It’s a scourge.  It’s an absolute scourge.”

Selling products with more connectivity is Kenwood’s answer to countering falling selling prices and he called on retailers to invest in demonstrating new technology.

Alpine’s Mike Anderson said the average selling price for a CD player in the specialist channel is over $200, while it’s only $110 for the industry as a whole.  He said future products for specialists may include less single CDs which are less profitable.  And  eventually fewer products with a CD mechanism.

Retailers also raised the issue of product reliability.

Lehmann said Kenwood has increased product testing.  Speaking for the industry, he said, “We haven’t done a good enough job to be perfectly frank.”  Factories shifted their focus to sales and skimped on product validation in recent years.  “The balance is now back to validation. We understand the damage,” he said.

Audiovox and Alpine also said the companies are devoting more or new resources to validating products.

John Schwartz of Perfectionist Autosound & Security said retailers are to blame as well.  They should stop trying to sell $15 (at cost) backup cameras to make an easy buck.  He sells $300 cameras and explains that the customer is getting a waterproof model that won’t fail.

Source: CEoutlook

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