The turbulent setting and resetting of tariffs in recent days and weeks has left industry members collectively reassessing inventory, pricing, and looking for a strategy going forward.
On Wednesday President Trump hiked tariffs on Chinese goods once again, up to an astronomical 125 percent while also lowering tariffs on many other countries, giving them a 90 day reprieve at only 10 percent for that time period.
25 percent tariffs remain on goods from Canada and Mexico.
One car audio company, speaking off the record, said it has halted all orders to dealers as it determines the pricing on inventory going forward. It also wants to make sure one or two large buyers don’t scoop up all its inventory.
Sony is pausing promotions starting in May. Many companies, including LinksWell and PowerBass said they are pausing orders or shipments from their factories. Both the aforementioned companies said they had good levels of inventory at present to carry them for a while.
We are told that some factories in China are simply not accepting new orders now, as tariffs may be even higher by the time the order is ready. The factory doesn’t want to be saddled with product the client then refuses to accept due to the higher cost.
Shipping costs are already starting to rise, as companies pause orders, disrupting the flow of goods.
Said one supplier, “The industry will pause and wait to see what happens. I think the vendors are in a good position if they are sitting on six months of inventory….They can hold off and let the storm pass. Those looking at 30- or 60-day day turns are going to be impacted very quickly.”
With much of the car audio industry reliant on Chinese factories for at least a portion of their goods, are manufacturers going to absorb the added cost of tariffs or pass it through to consumers? They will probably do a little of both.
But even a modest increase of 20 percent in MAP (Minimum Advertised Price) can add up for the consumer. A $275 MAP amplifier would rise to about $325. As one supplier said, if a shop is normally charging $150 to install that amp and that includes basic ‘parts’ whose cost goes up, then labor might also rise to say $225. “So now that $420- installed amplifier becomes about $130 more around $550.”
PowerBass’ Erik Harbour said the company doesn’t intend to raise prices. “We are going to evaluate our current inventory status to see how that looks for the foreseeable future.”
In general, industry price increases are expected to start by May and continue into June and July, said some suppliers.
The shop installing an amp for $150 including wire should revisit their labor rate. They have bigger problems then price increase on goods.
The only place doing those prices is Best Buy, and I doubt they’d be able to do it without economies of scale on their side
Even Best Buy charges $150 labor for an amp, PLUS cost of wire ($80 8ga kit, $110 4 ga kit, both Metra Truconnex).
I suggest that the tariffs won’t last forever, I’m not worried, I have gone through so much $#!t in my 52 year career, from consumers, suppliers and the Fd’up government. I CAN SURVIVE ANYTHING! NOPAIN , NO GAIN. Some will suffer more than others due to their investments. I invest in myself, thank you. The final result may make us all happy. Pray on it.
It’s about time! The US has been paying high tariff’s along with loosing thousands of jobs to other countries for far too long.
SounDigital is 100% made in Brazil and not impacted heavily by the tariffs.
They started raising prices even on products not part of new Tariffs which is bad for the industry I see the back lash by consumers & even dealers are getting mad now with price increases on companies current inventory they have in stock. i think to many car audio companies sat back & did’nt try to find other vendors in other countries to make goods in general . you have pioneer opening a factory in India to build now. India was Building Illusion Audio for ORCA which was hi end