Have vehicle manufacturers caused the death of the aftermarket car radio?

IMS Research forecasts that global revenue from aftermarket car radio sales will decline from $6.1 billion in 2011 to $3.2 billion in 2018.

05/29/2012


Are vehicles manufacturers causing the death of the traditional aftermarket car radio? A recent report from IMS Research, recently acquired by IHS Inc., that forecasts global revenue from aftermarket car radio sales will decline from $6.1 billion in 2011 to $3.2 billion in 2018, suggests this may be the case.

For many years consumers have had the option to “upgrade” their ageing car radio for something a little more up-to-date through the use of an aftermarket head unit. In some instances this is a way to gain extra features for a low cost, or to opt for a more advanced unit with video or navigation capability. However, a new report from IMS Research, In-Car Audio, Infotainment and Driver Information Systems has found that new developments from vehicle manufacturers could spell the end of the traditional aftermarket car radio in the next 10 years, especially in mature markets.

Despite reports of small improvements in sales for aftermarket products, the traditional aftermarket for one or two DIN head units has been declining for some time, largely because of improvements in product quality from the new vehicle sector. In the future, the bigger threat to the aftermarket comes as vehicle manufacturers move towards distributed systems, doing away with the traditional rectangular hole in the dash board for consumers to install an aftermarket product. Furthermore, as infotainment head units become more integrated with other vehicle systems (such as the HVAC controls), the fitting of an aftermarket head unit requires a specialist and becomes a more expensive undertaking.

The North American and Western European markets for aftermarket radio (audio/audio video/ navigation) sales will decline from $1.7 billion in 2011 to $781 million in 2018. Senior Analyst Jack Bergquist from IMS Research said, “The next three years will be very critical for aftermarket head unit suppliers. The industry is going to see a shift away from high volume/low cost units to low volume/high cost and more advanced units. If manufacturers aren’t able to innovate and assess new markets effectively in this period, future success will be hard to guarantee.”

Even on lower cost vehicles, which may feature the traditional head unit slot for a longer period of time, manufacturers are offering low cost navigation units and even fitting smart phone based dumb terminals, such as on the Toyota IQ in Europe. The presence of such advanced OEM systems will mean innovation from aftermarket suppliers will have to be strong in order to convince customers to replace the existing systems in their cars.

Although the market decline is forecast to be severe over the coming years, it’s not all doom and gloom for aftermarket manufacturers. With new software based head units that are harder to replace becoming more prevalent, new opportunities will open up for accessories or upgrade boxes to increase the hardware capabilities of these existing systems. Also, the existing fraternity of die-hard audiophiles who are willing to invest significantly to create a unique experience in their vehicles is unlikely to disappear in the future.



No comments
The Top Plant program honors outstanding manufacturing facilities in North America. View the 2015 Top Plant.
The Product of the Year program recognizes products newly released in the manufacturing industries.
The Engineering Leaders Under 40 program identifies and gives recognition to young engineers who...
World-class maintenance: The three keys to success - Deploy people, process and technology; 2016 Lubrication Guide; Why hydraulic systems get hot
Your leaks start here: Take a disciplined approach with your hydraulic system; U.S. presence at Hannover Messe a rousing success
Hannover Messe 2016: Taking hold of the future - Partner Country status spotlights U.S. manufacturing; Honoring manufacturing excellence: The 2015 Product of the Year Winners
The digital oilfield: Utilizing Big Data can yield big savings; Virtualization a real solution; Tracking SIS performance
Getting to the bottom of subsea repairs: Older pipelines need more attention, and operators need a repair strategy; OTC preview; Offshore production difficult - and crucial
Digital oilfields: Integrated HMI/SCADA systems enable smarter data acquisition; Real-world impact of simulation; Electric actuator technology prospers in production fields
Improving flowmeter calibration; Selecting flowmeters for natural gas; Case study: Streamlining assembly systems using PC-based control; CLPM: Improving process efficiency, throughput
Putting COPS into context; Designing medium-voltage electrical systems; Planning and designing resilient, efficient data centers; The nine steps of designing generator fuel systems
Warehouse winter comfort: The HTHV solution; Cooling with natural gas; Plastics industry booming

Annual Salary Survey

Before the calendar turned, 2016 already had the makings of a pivotal year for manufacturing, and for the world.

There were the big events for the year, including the United States as Partner Country at Hannover Messe in April and the 2016 International Manufacturing Technology Show in Chicago in September. There's also the matter of the U.S. presidential elections in November, which promise to shape policy in manufacturing for years to come.

But the year started with global economic turmoil, as a slowdown in Chinese manufacturing triggered a worldwide stock hiccup that sent values plummeting. The continued plunge in world oil prices has resulted in a slowdown in exploration and, by extension, the manufacture of exploration equipment.

Read more: 2015 Salary Survey

Maintenance and reliability tips and best practices from the maintenance and reliability coaches at Allied Reliability Group.
The One Voice for Manufacturing blog reports on federal public policy issues impacting the manufacturing sector. One Voice is a joint effort by the National Tooling and Machining...
The Society for Maintenance and Reliability Professionals an organization devoted...
Join this ongoing discussion of machine guarding topics, including solutions assessments, regulatory compliance, gap analysis...
IMS Research, recently acquired by IHS Inc., is a leading independent supplier of market research and consultancy to the global electronics industry.
Maintenance is not optional in manufacturing. It’s a profit center, driving productivity and uptime while reducing overall repair costs.
The Lachance on CMMS blog is about current maintenance topics. Blogger Paul Lachance is president and chief technology officer for Smartware Group.
This article collection contains several articles on the vital role that compressed air plays in manufacturing plants.
This article collection contains several articles on the Industrial Internet of Things (IIoT) and how it is transforming manufacturing.
This article collection contains several articles on strategic maintenance and understanding all the parts of your plant.
click me