Aftermarket Facts for 2019

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This year, 2018, was the first time in years, if not decades that aftermarket car audio was expected to dip below sales of $2 billion (wholesale), according to the Consumer Technology Association (CTA). It was predicted to drop to $1.9 billion, and then to $1.8 billion in 2019.

Included in these figures are portable navigation, remote start/security, dash cameras, backup cameras, blind spot and crash warning systems and traditional car audio/video products.

Fortunately, there are potential growth segments in the aftermarket including Advanced Driver Safety Systems (ADAS) such as  blind spot detection.  Only 9 percent of new cars included ADAS systems in 2017, but the technology has the potential to reduce fatalities by 20 to 30 percent, according to analyst Steve Byrne at Bank of America.

The need for ADAS is greater than ever.  US traffic fatalities are due to hit 40,000 for 2018, according to the National Safety Council, in what has been a steady increase since 2014. Distracted driving is believed responsible for at least 10 -20 percent of the fatalities, according to various reports.

But the market is still small.  ADAS aftermarket wholesale revenues will hit $38 million in 2018, up almost 80 percent over 2017, said the CTA. For 2019, the segment should reach $49 million.

Another trend pointing to the growing need for ADAS is that alcohol-related crashes may be rising again. And, motorists appear to be mixing alcohol with drugs. Tests indicated that 44 percent of the drivers killed in US car crashes in 2016 had the residue of drugs in their system – up from 28 percent a decade ago (see The Detroit Bureau).  The opioid epidemic may be to blame.  Also, the Institute for Highway Safety says states that legalized marijuana saw a 5 percent rise in crashes compared with states where pot remains illegal.

Phones

As smartphone price tags climb, consumers are holding onto smartphones longer.   Owners are now waiting an average of 2.83 years to upgrade their smartphones, according to data for the third quarter from HYLA Mobile. That is up from 2.39 years two years earlier.

Apple iPhones traded in during the period were an average of 2.9 years old, reported the Wall Street Journal.

Automobiles

Prices have been rising on used cars, to the point where it may be more cost effective to lease, according to The Detroit Bureau.  The average price of a used vehicle passed the $20,000 mark for the first time during the year.   Also, lower priced used cars grew increasingly scarce. During the second half, an average lease payment on a Toyota RAV4 was $326, while the average used payment was $355 per month.

Autonomous Cars

2020 is the year that some carmakers expect to offer cars considered at “Level 3” in self-driving ability, which means the car can usually drive itself, but still requires a human to take over at times.  Unfortunately, many experts believe humans are not capable of returning their attention to the wheel fast enough, and so some car makers are skipping Level 3 for Level 4 cars due after 2021 that are fully autonomous except in difficult conditions such as rain.  Or they are waiting for Level 5 capability, which is full autonomy in all conditions and human intervention is not required.   For a full overview of autonomous car levels see this story in emerj.

Ford says the market for self-driving cars and related travel services could hit $10 trillion—half the size of U.S. gross domestic product, reported Bloomberg this week. Annual sales of self-driving cars will hit 33 million by 2040 and account for more than a quarter of global vehicle deliveries, says IHS Markit.

More on Aftermarket Car Audio

Amplifier sales were projected to close 2018 with 4 percent growth to 1.1 million units, reaching sales of $150 million wholesale.  But head unit shipments to dealers were expected to fall 12 percent to 3.6 million units, and speaker sales were expected to drop 3 percent to 6.3 million units wholesale.

Within the head unit category, there are segments of growth.  Mechless receivers (without CD or DVD) were expected to climb 10 percent in units in 2018 and 9 percent in dollars.  And double DIN AV units were expected to pass 1 million units, growing 14 percent, to reach $206 million in sales to dealers (up 13 percent over last year), said the CTA.

Photo: Car Toys 

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