Before COVID, industry members complained that car audio prices were too low. But after so many price hikes last year, some retailers fear continued price increases will scare away customers.
Some brands have raised prices 30 or 40 percent or more. An amplifier that was $180 might now sell for $280 and a $1400 amplifier is now $1800 from one brand. A deck from another brand has jumped from $500 to $749.
Still other suppliers have kept increases down to 15 or 20 percent, but some of these are talking about more price hikes this year.
JL Audio is one of the suppliers at the high end of the price increase scale. Senior VP Marketing Manville Smith said, “We have applied price increases commensurate with our increases in cost of goods and other expenses….We have maintained dealer margins, causing retail prices to increase proportionately. This can seem shocking as we had become accustomed to price stability and strategic price points. These have been impossible to maintain.”
We asked if prices will come down in the future. Smith said, “For prices to come down, costs will need to come down, not just stop increasing. So, a reduction in inflation will not be enough on its own. We will need to see raw materials, semiconductors, and transportation return to pre-2021 levels for prices to actually decrease in any significant way. This may happen very gradually as supplies catch up with demand and competitive pressures emerge.”
Other suppliers said privately that their prices are likely to remain as is, even if some costs go down.
On the retail side, many dealers we polled said consumers have accepted the industry’s new car audio prices thus far, although some are concerned that continued increases will scare them away.
Some customers are switching away from higher priced brands due to the increases. Bashir Assi, of Car Audio Express, CA says his shop is not losing out, but a higher priced brand may lose out. “I’m not losing a customer, I’m just selling him maybe a different product.”
Harvey Wright of Autosound, IN said, “Let’s just say customers are going to other [less expensive] products.”
But, Wright is growing concerned. “Yes, there’s a magic psychological price point when people say, that’s a lot more than I though it was going to be. I don’t think it’s hit the fan yet, but it’s going to hit the fan. Some of the…stuff is too high. Some products can absorb the price–just as the people who buy Mercedes are going to continue to buy Mercedes. But the bread and butter product is so far out; some are 40 percent or higher in price. A subwoofer that was $449 is now $699. Yes, we’re starting to see an impact.”
Zack Knoop of California Custom Sounds, OH is also watching pricing. “My only concern is we’re possibly starting to get into a zone where consumers are like ‘Whoa, hold on’ and pull back on the buying. People don’t seem to be spending quite as freely as they once were and we are starting to see a little more sticker shock.”
Columbus Car Audio, OH is more worried about the rising cost of other goods, such as gas. “It feels like we’re not in a race to zero anymore, but in the same breath, I feel a little concerned about prices in general. How much longer can the country sustain this inflation we’re going through. But with electronics, you’re seeing people charge the price it should be, instead of going down every year,” said Jayson Cook.
source: https://www.ceoutlook.com/2022/03/22/are-12v-prices-too-high/
