12V Inventory Surplus Expected to Linger

share on:
Inventory surplus

Some car audio dealers and suppliers are expected to remain overstocked with inventory for most of this year, they said.

Following two years where many scrambled to buy as much product as possible to keep ahead of product shortages, some dealers and supplier backrooms and warehouses are piled high.

“I think there’s a lot of inventory out there. It will take at least most of the year to sell through, and everyone still has stuff coming.  I don’t think it’s all showed up yet,” said one distributor.

Dealers are more cautious in their ordering levels this year and they tell us their customers are also cautious due to uncertainty about the economy.  This is true of wealthy customers too, some say.

We asked industry members when they think the current overstocked position will return to more normal levels. We promised anonymity so that their responses could be more candid.

One supplier said, “Retailers are acting very conservative now in ordering.  They just don’t know what’s going on in the economy.  I think tax season will be strong.  People will get full tax returns this year.  But by the end of the year we’ll see more big companies laying off people.  That will affect our business.”

Another supplier expressed the opposite view. “I think people [dealers] will order at a normal level in the middle of the year; maybe June.  I’m thinking the second half will be okay.”

January was seen as a slow month for many retailers, according to our short poll.  Remote start sales were down between 15 to 35 percent this season due to warm weather, especially in the Northeast, according to our phone survey of about a dozen reps and industry members last month.

The concern is that retailers who rely on cash from remote start season,will be short on funds to order audio for the spring selling season.

While retailers are cautious in their ordering, the picture is not all doom and gloom. Some retailers say sales are steady or above last year.  At least one supplier expects its sales to be up 10 percent over last year in 2023.

Also on a positive note, consumer retail sales overall remain high and job growth continues.  Analysts were surprised that retail sales rose in January by 3 percent,  that’s actually a big jump, as far as these metrics go, from the 1.9 percent analysts had expected.

Unemployment in January was at a 53 year low at 3.4 percent.  Again surprising analysts, non-farm payrolls surged by 517,000 jobs in January, the most in six months.




Want to receive industry news? Sign up here
share on: