Dying Aftermarket Car Radio Business?

IMS Research, a subsidiary of market research group IHS predicts that the global revenue from aftermarket car radio sales (one ot two DIN head units) will decline from $6.1 billion in 2011 to $3.2 billion in 2018.

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.

IMS Research believes that the biggest threat to the aftermarket is that vehicle manufacturers are “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,“ wrote IMS Research.

IMS Research also indicates that competition will be harder including on entry level cars. “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.“

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