Recently, VOXX revealed more about its purchase of Directed, its long time competitor in remote start. It shared some of its plans for products, inventory and distribution for the new VOXX DEI LLC.
We learned that VOXX received $9.1 million in Directed inventory as part of the VOXX buyout for $11 million plus certain liabilities. This was stated by Pat Lavelle, CEO of VOXX International on a financial conference call this month.
VOXX is still integrating that inventory into its planning but the expectation is VOXX DEI will not take a conservative approach to inventory planning for the season. “We’re going to be right down the middle; look at last year’s sales and put a small bump on that and we’ll look at the historical trending to see if an item is going up or down,” said Aron Demers, Senior VP VOXX Electronics referring to Directed inventory.
For VOXX brands, the company purchased 5 percent more inventory than last year. Demers added, “I don’t anticipate any shortage in inventory throughout the system unless we have a crazy season and we go into deep freeze and then we’ll scramble to get products. The good thing is we have multiple brands.” He added, “We had a great month last month” in terms of remote start sales.
Demers said new harnesses and new firmware applications for remote start remain the company’s top priority but also Smartphone as Key is high on the list. Technology that lets your smartphone become your car key might be released as early as February or March next year. Teams at both Directed and VOXX have been working on the product. he said. Directed has shown it’s version at CES for a couple of years.
The car companies are starting to offer Phone as Key, so the time is right for the aftermarket to offer its version, said Demers.
Directed’s 4G Dashcam (SmartView) shown at CES this year is still on the engineering road map but it’s not a top priority for release.
The newly merged company adds Directed’s 44 engineers to VOXX Electronics 50 engineers (not counting VOXX’s OEM engineering department). In describing Directed to analysts Lavelle said, Directed was “the number one competitor of ours with powerful brands, a long standing and loyal customer base and a talented engineering group.”
With the acquisition, VOXX’s market share in remote start is about 65 to 70 percent, said Demers. VOXX Electronics has no plans for future acquisitions. With Directed, VOXX Electronics now has about $130 to $140 million in annual sales, he said.
Demers said VOXX does not plan to make a lot of changes to Directed or to its distribution base. “We respect it and it’s set up very well. Hopefully we can bring out new and exciting products in the future including Phone as Key.”
“What we got with Directed is another level of support out in the field. We send our guys out but it’s not as routine as what the team at Directed does. We want to put some of our other products in that knowledge base so they can educate dealers on Smart TV [rear seat video] products…” Demers said, noting the acquisition means more “boots on the street” and “an extra layer of technical support.”
“We competed against DEI [Directed’s parent] for years. And we competed well against each other. We’ve shared cross licenses with patents. We always admired them for what they did in the business. They were innovators…One of the biggest motivations [to the deal] is their dealer network. They have a great network of direct dealers and we very much like that distribution base that we weren’t able to tap into with VOXX…. Now we can bring some of our mobile video and ADAS products to these dealers,” Demers said.