CD players lead car stereo growth - compact disc players, includes related articles on what's hot in car radios and car stereo consumer target markets

Discount Store News, Jan 17, 1994

CD players and changers have erupted into the fastest growing segment of the car stereo market, and the dollar volume of installed CD equipment could approach that of cassette decks in 1994.

The market for CDs is explosive. Growth is running about 25% per year, more than three times the 7% growth rate for the entire car stereo market, according to a recent Sony estimate. In fact, Sony may have a hand in pushing the CD market even higher with its commitment to the mini-CD category it pioneered. At the Winter Consumer Electronics Show in Las Vegas, Sony introduced what it described as the world's first in-dash MiniDisc changer/tuner, carrying a suggested retail of 1,300, a component MD changer at $1,000 and a powered in-dash MD receiver, also at $1,000.

With the recognition of how tempting a $1,000.system would be to a car burglar, Sony now makes all equipment, including cassette and CD players, with detachable faces. Although new ones can be ordered, Sony, along with other vendors, prices them high, about $100, in order to discourage thieves from stealing the base equipment and then buying a new face.

Some vendors require those who claim they lost their detachable faces to order new ones, based on the serial number from the set itself, through a retailer, again to discourage thieves.

Sony has introduced a special Express line. of equipment, with an opening e point of $99 for an FM/cassette deck and the high $200 range for an in-dash CD player.

The Wal-Mart store in Toms River, N.J., for instance, carries a Sony in-dash CD player at an opening price point of $277. It carries a Panasonic CD five-disc changer at $416. Wal-Mart does no installation, so customers either must install the decks themselves or pay a specialty shop about $50 for a single unit and $100 for a trunk mounted, multiple-unit changer.

In comparison, The Wiz, a New Jersey-based CE chain, charges $327 for an opening price point Sony in-dash player, plus $50 for in-house installation. But its installation shop is so jammed that customers must wait three weeks for an appointment.

The Wiz also carries a Kenwood CD changer on a special deal of $500, plus free installation, normally $100 extra. It also stocks Denon changers in the $500 to $600 range.

At the Kmart in West Long Branch, N.J., the only car CD equipment it carries is Sony's Car Discman at $167.97. That is a mobile system that comes with a dashboard mounting bracket and adapters for playing through an existing car stereo through an adapter that fits into the cassette deck. It draws power from the car's cigarette lighter receptacle.

In other signs of the growing importance of CD equipment in auto sound, many FM/cassette players now come with a CD input jack, either built into the face or mounted on the dash. Those include Kraco, whose model KF-1106 features a face jack, and its KEC-1717, with a dash-mounted jack. All Kraco cassettes now come with either type of CD input jack. In keeping with the anti-theft movement, both models come with detachable faces.

In another nod to the CD boom, Arkon Resources, Arcadia, Calif., introduced. at CES its new Sound Feeder, which connects a mobile CD player to a car stereo through its FM radio. Priced to retail at $49.95, the Sound Feeder feeds CD sound into the car's FM radio, which then plays it over unused frequencies. The Sound Feeder draws power to run both itself and the mobile CD player from the car's cigarette lighter receptacle. The quality of sound is limited to the sound quality of the car's FM radio.

Arkon says its Sound Feeder is ideal for use in rental cars, which often lack cassette decks, as well as any truck, boat, or RV that has an FM radio.

During the 1992 model year, a higher percentage of trucks and vans came with factory installed stereo cassette systems than did U.S.-made cars, reported the Electronic Industry Association in its 1993 Mobile Electronics Trends Guide. Counting trucks and vans, as well as cars, U.S. automakers installed stereo cassettes in 66.1%, or 6.9 million, of the vehicles they produced in '92.

In 1993, the auto sound aftermarket represented a $1.58 billion market, the EIA estimated, a 7.4% gain from $1.47 billion in 1992. Original equipment car stereos accounted for a retail value of $3.19 billion more in '93, a 7.0% gain from the previous year.

Last year, the entire CD market, including home, mobile and car equipment totaled $3.39 billion, representing sales of 18.9 million units at an average retail of $179.

Installed car CD players and changers will account for about 30% to 35% of all car stereo installations in 1994, predicted Kurt Larsen, senior mobile electronics buyer for Best Buy, Minneapolis. He also predicted that due to average prices of about $300 for CD decks vs. $135 for cassette decks, CD systems will represent about half of dollar volume this year.

"CD is going to capture an increasingly large share of auto sound growth," Larsen said. Dollars spent on car CD systems are beginning to approach those spent for cassette decks.