Car Audio Outlook for 2021

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2021

There are many trends in favor of car audio sales for 2021, and still other trends that pose headwinds in the coming year.

Many industry members expect to see growth over 2019, and a few brave suppliers are predicting growth over the tremendous sales seen in 2020.  Others note that this year, as the public is vaccinated, travel may return in the second half, which will likely cut into consumer electronics sales.

Jim Warren, Executive Director of the Elite Distributor Alliance, put it this way, “… My best guess is that 2021 will be a good year, and likely a significant uptick from 2019.” But he added, “In the back half of the year, if travel returns to more ‘normal’ levels and the population is vaccinated, I would expect demand for consumer electronics to soften somewhat.”

There are also concerns about shipping costs and higher costs of materials spilling into 2021. On the other hand, some hope for a break on tariffs.

Steve Jergensen, President of Race Sport Lighting said, “Our biggest concern for 2021 is the rising cost of freight…  And just now, there’s talk of materials increasing…We’re trying to keep our prices stable, and do not want to do a price increase in 2021 after an unstable 2020, but unfortunately, with logistical and material challenges, everyone will be forced to raise prices.”

Some are hoping the Biden administration will retract some of the tariffs which are as high as 25 or 30 percent on some car audio goods.

As to whether the tariffs will be rescinded, one executive said, “Tariffs rarely come back off because governments find ways to allocate that money and it’s now a revenue stream. So I don’t see how that would go away. But because of how the tariffs impacted the farmers and having to subsidize them, that might be the only reason to address it.”

We reported earlier that Sony is planning for a 5 to 10 percent increase over 2020 in sales.  Also bullish on the year is AudioControl, which is looking for double digit growth. At Harman, Jeff Fay, VP and GM Global Car Audio Services said, “This year I think is going to be a good year.  I think that car audio is going to see a revival; certainly, if you follow the trends, we’ve seen good business over the last few years, and in 2019 we saw an injection of expendable income and people buying on that, but car audio is morphing. It’s not just in a car anymore. It’s powersports and more. We’re excited; we expect to see double digit growth again.”

Retailers are also hoping for a strong year.  Car Toys VP of Merchandising Gregg Thomas said of the 48-store chain, “We definitely think there’s some momentum that will continue into 2021. But we still need to wait and see what happens.”

Dave Wall of Freeman’s Car Stereo, also expects the new customers that entered 12 volt retailers in 2020 will continue to buy and tell their friends, continuing to expand the base.

Neil Brookmeyr of distributor LESCO pointed to other trends; “I don’t think there’s any limit to how big the screens are going to be; Telsa started the trend with large screens.  Besides tariffs, freight is going to raise prices and increase delivery times.”

Finally, Justin Lee of Firstech said, “For 2021 our outlook is immensely positive.”

 

 

 

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