The bright spot of car audio was clearly amplifier shipments in 2014, which jumped 13 percent in unit sales to dealers and 12 percent in dollar sales (wholesale), according to the latest report from the Consumer Electronics Association (CEA).
Head unit sales, however fell 4 percent in units and 3 percent in 2014.
The CEA cautions that car audio must innovate “if aftermarket wholesale revenues are to remain above $1 billion.” The report published this month even says, “The autosound market must evolve or risk extinction at the hands of vehicle OEMS, who now occupy the bleeding edge of automotive technology innovation.”
But it quickly adds that the aftermarket is beginning to do just that. Author Steve Koenig, CEA Director of Industry Analysis sites Directed’s introduction of smartwatch capability for its remote start as an example.
“We’re starting to see a more robust response from the aftermarket that is meeting or exceeding the technology you might find on the OEM side. The OEMs might have the smartwatch app but not everyone can afford a BMW. Maybe they have a Honda and would still like the features. That’s what’s encouraging to me,” he said.
The aftermarket’s adoption of CarPlay and soon Android Auto are other examples. They may not reverse the decline of car audio, just as other connected car features haven’t, but they will “buoy” sales and slow the decline.
The report also says that wireless hotspots may soon make their way into aftermarket head units.
Overall, the aftermarket declined 2 percent in dollar revenue last year and is forecast to fall 3 percent this year. (See chart above). By way of comparison, the home audio market (not counting portables) will continue to grow at about 4 to 6 percent each year through 2016 in both units and dollars. This is mainly due to the popularity of soundbars.
For the aftermarket, the CEA predicts head unit sales will decline by 5 percent this year in unit sales and continue to roll downhill to a 9 percent decline in 2018.
Analyzed by dollar sales, total head unit shipments will decline by 6 percent this year, with increasing declines each year up to 11 percent by 2018.
While car amplifiers hit double digit growth this year, the segment is only expected to see nominal growth in the next few years. For 2015, look for a 3 percent gain in units and 2 percent in dollars.
Total speaker sales will increase by 2 percent in units and remain flat in dollars this year, predicts the CEA.