Car audio had a rough start for the year. Tax returns came later, resulting in a shorter selling season, said many retailers, suppliers, reps and distributors.
Plus the weather hurt sales in some regions.
Tax returns were about a month late, starting late February but the buying season ended as always in April. This cut into sales by as much as 25 percent for some retailers, but many say they are making up the shortfall in marine, motorcycle and powersports audio, which has been booming this year.
Some said the season was short but intense, and so sales were not impacted. But according to The NPD Group, car audio sales were down by about 12 percent for the first four months of the year, compared to the same period a year ago.
Change in U.S. dollar sales January-April 2017 vs. year ago
Total Car Audio: -12%
In-Dash Stereo Receivers: -19%
Car Stereo Speakers: -6.5%
Car Amplifiers: -2%
Change in U.S. unit sales January-April 2017 vs. year ago
Total Car Audio: -9%
In-Dash Stereo Receivers: -11%
Car Stereo Speakers: -3%
Car Amplifiers: -2%
Source: The NPD Group / Retail Tracking Service
Dean Magnussen of Sound Warehouse, Salt Lake City, UT said, “The IRS, according to articles I read, got beat out of $16 billion in fraudulent tax returns so no tax returns were issued until February…they hit in March and we had a huge month but we were standing around looking at each other in February. It was definitely slow. We’re going to make up for it. Right now we may be one or two weeks behind last year and we have plenty of time.”
David Wall General Manager of Operations, Freeman’s Car Stereo, Charlotte, NC said, “Tax season faded away quicker that we expected, but with the nice weather in our region and marine business being so strong, it more than made up for it.”
About a half dozen other retailers echoed the same account, but in some areas, a cold spring also hurt marine and powersports sales.
Regarding the late tax returns, the IRS wanted more time in handling returns to check against double filing for refunds. So Congress passed a law requiring the IRS to hold tax refunds that included certain tax credits until mid February (which was then extended to February 27).
Regarding the weather, the Northern states were hit with an unusually cold and rainy spring. “I would say it’s more a weather issue than a tax return issue. More rain than usual crippled us for the first quarter and half of the second. People weren’t spending money. This year it’s been torrential down pours for days and days,” said Jeff Pedersen of Falcon Sales & Marketing, Lake Stevens, WA.
The Northeast got a double whammy as a mild winter knee-capped remote start sales, leaving retailers with less open-to-buy dollars for spring car audio. And then a cold spring hurt marine and powersports audio sales.
Photo: Freeman’s Car Stereo