Pioneer, Kenwood, Alpine Saw Tough Q1

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car audio

UPDATED (See update following story): Alpine and JVC Kenwood saw losses in the first quarter while Pioneer swung to a profit due to lower special expenses, according to financial reports released last week from three of the industry’s top suppliers.

All three companies reported lower sales overall.

Pioneer sales fell 13 percent to $936 million (95,329 million yen) for the quarter ended June 30.  This compares to sales of $1.07 billion for the period a year ago.

Net profit swung to a gain of $12.5 million compared to a loss of $25 million a year ago due to a lower payout in retirement expenses compared to a year ago and other lower special expenses, it said.

Pioneer said North America consumer car audio sales fell.  Pioneer’s OEM sales also declined in North America.  As a segment, Pioneer car electronics sales declined by 14 percent to $748 million in the quarter.

OEM sales now represent 62 percent of Pioneer’s total car electronics sales, up from 61 percent a year earlier.

Pioneer lowered its forecast for overall sales this year to $3.9 billion, down from $4.1 billion predicted in May.  Net income however is still expected to reach about $9.8 million.

Alpine profits swung to a loss in its recent quarter hitting a negative $20.4 million compared to a profit of $11.15 million for the same period last year.

Net sales also declined by 15 percent to $6.18 billion (62,483 million yen).

The company cited a “harsh” aftermarket environment in car audio in Japan and elsewhere.  However it sees future potential in the merging of car electronics with new  information technology in cars, autonomous cars and artificial intelligence in cars.  So it is devoting this year to reorganizing to prepare for this shift in the market.  It is also working to improve R&D efficiency and organization, it said.
In traditional car audio CD players, Alpine sales fell 19 percent to $112.7 million. In navigation/information systems sales  fell 14 percent to $504 million.
 At JVC Kenwood, sales fell to $645 million from $661 million a year ago.  Net income fell by $197,000 compared to a drop in net income last year of $166,000.
In the automotive sector, JVC Kenwood increased sales to $324 million compared to $323 million a year ago.  Operating income for the automotive sector was negative $6 million compared to a loss of $8 million a year ago.
The reports are for the fiscal first quarter running from from April 1 through June 30.
UPDATE:  Alpine responded by saying that much of the results in car audio are due to greater economic challenges that even auto makers like Toyota are facing.   The rising value of the yen has wiped out the equivalent of $5 billion off the books of the leading 7 Japanese automakers.
A spokesperson said, “…it should also be clarified that the Japanese economy as a whole is facing an unusual set of circumstances due to the foreign exchange rate.  This is noted on our financial results on Page 4…. Paragraph 1: In the Japanese economy, there were signs of a moderate recovery; however, a mood of uncertainty surrounded the future outlook due to the sharp yen appreciation caused by concerns about a slowdown in overseas economies and the issues regarding the U.K.’s leaving from the EU.

“This is not just an Alpine situation, since many Japanese industries are facing the same issue. The major car makers are certainly feeing the impact, as seen in this Bloomberg article that ran in Automotive News and other media.  In fact, the article states that Toyota alone took a 235 billion yen hit due to the resurgent yen:

http://www.autonews.com/article/20160805/OEM/160809869/japans-automakers-scramble-to-counter-strong-yen-after-$5-billion-hit

“Please just be aware that although sales reductions were certainly a factor in Q1 results, the external factor of the economic situation also had an impact on the financial figures.”

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7 Comments

  2. A big here, here to Marty Jones. The manufacturers put all their eggs in one basket giving all their attention and best deals to big online discount retailers. When a good percentage of people walk into your store and spew the BS about ” hey I can get this one line for X amount” why should I buy it from you? What are the dealers supposed to do, when online sellers sell lower than your cost? The race to the bottom has turned subterranean and now these manufacturers can see the fruits of their labor. In a discounted, throw-away world, we will all be collecting food stamps and asking some shit-head kid if they want large fries with their meals. And to think, it only took 2+decades of hard work to get to nowhere for most of us. Enjoy your new careers folks.

    2. Exactly! First the big box stores, then Amazon (quickly followed by many other online discounters), add in a plethora of installers giving away all their knowledge in hopes of becoming YouTube stars & the result is independent 12V shops are almost all gone. After 25 years in the industry, 20 of those owning our own shop, my hubby had to take a full-time job at a local factory back in April. We closed our retail store in May. Now we only do a small amount of installations & remote starts in the late afternoons & on Saturdays. We are remodeling our retail store into our living quarters (too many retail spaces sitting empty everywhere to ever be able to sell it) & the beloved little house we just finished remodeling is going up for sale. Thanks a lot Pioneer, Kenwood, Alpine, etc. for allowing all of us independents to make you great & then throwing us under the bus to move more boxes for less money!

  3. Customer walks into a box store and receives no help…everything looks pretty much the same except for the lights………Which is the cheapest? That’s the one I want. Sale complete no opportunity for a upgrade. Pioneer and Kenwood are getting what they caused and deserve. Both have abandoned the stores that built them and now they are in decline. Alpine on the other hand has no direction whats so ever. No DD, No affordable Touchscreens. Maybe Jeep can save them. Product is flooded on Ebay and Amazon and customers are only looking for one thing who has it the cheapest……If our industry and especially Alpine, Kenwood and Pioneer would look at Stihl and Yeti and learn from them then our industry and their companies might still have a chance or they can continue their down hill spiral and in a few years they will be the next RCA, Zenith and Magnavox.

  5. If you don’t take care of your little dealers your sales and profits will plunge.

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