The US House of Representatives passed Biden’s $1.9 trillion Coronavirus relief bill, which means $1,400 stimulus payments could reach Americans starting next week.
In addition to $1,400 checks to individuals, the bill extends the extra $300/week in unemployment insurance and expands the child tax credit to up to $3,600 per child.
How will the new stimulus package affect car audio retailers?
Retailers last week were already expecting another boom in sales due to the stimulus. And given that supplies of car audio products are already strained to the breaking point, the question arose, can the industry supply another boom?
Dave Wall, CEO of Freeman’s Car Stereo with 7 stores in the Carolinas said of the stimulus, “I’m optimistic it will have a positive impact,” and regarding keeping adequate stock, he said, “We’ll find a way to make it happen.”
A second boom is expected, once again, to create more business for second tier suppliers, as first run suppliers are nearly maxed out on product already. This is basically continuing the trend that started last year.
For example, Epsilon said it has strong supplies, at least for the first half of the year. ” I have a constant flow of product for the next six months,” said VP Sales Ronnie Brashear.
Arc Audio said if there’s a major run on product it would consider not taking on new dealers in order to serve current dealers.
Jamie White, Principal of rep firm Opus Marketing said the timing is better for a stimulus now than had a large payment been offered in the fall. “If it had come out in October or November, other industries would have absorbed it, such as cellphones.”
Coming at this time of year, some powersports audio suppliers expect a spike in marine, powersports and motorcycle audio. This should be enhanced as tax return money starts reaching consumers in mid March.
AudioControl’s Chris Bennett said he’s hopeful for another spike in sales and the company is working hard on making sure it can handle the inventory.
Robin McNeal at Nakamichi says his main concern is that rising gas prices might temper a second boom from the stimulus. “I think the stimulus will give us a boom. But gas prices are a variable and I don’t know how to factor that into the equation,” he noted.
As for the new stimulus bill, called the American Rescue Plan, those receiving the $1,400 payments include individuals earning up to $75K with a hard cut off of those making more $80K. There’s a phase out for couples making more than $150K that caps at $160K.
CBS News quoted analyst Chris Krueger of Cowen & Co saying, “By next weekend, a couple making less than $160,000 could well have $2,800 deposited into their checking account.”