Luxury of choice

Owing to the availability of cutting edge, high-end car audio-video systems in the market, consumers are now spoilt for choice.

In a country that produces almost a million cars annually, the domestic market for car audio-video systems is slowly inching towards a new peak. Original equipment manufacturers integration devices could exceed sales of 50,000-60,000 units this year, if supplier estimates are to be believed.

Sony, LG, Nippon, Delphi and Pioneer have renewed their interests in the high-end audio-video products, luring vehicle buyers with promising alternatives such as nomadic devices, Bluetooth speakers, satellite radios, hard disk drive-based players and other digital media playback options.

The domestic car audio-video equipment market is estimated to be anywhere around Rs 600 crore, growing at 50 per cent in the mass car segment and around 20 per cent in the luxury car segment.

The players seem to be banking on the thought that a consumer who buys a car worth Rs 6-10 lakh would want "more than just an MP3 player".

Audiophiles want to use the MP3s and music systems they burn at home inside their cars, notes Rishi Tandon, product group head (digital audio video), LG. "We have seen an incremental growth in the sales of mid-sized and luxury cars. This directly implies a demand for high-end DVD players, LCD screens and lifestyle MP3 players that can store music on hard disks and Bluetooth speakers that can stream music wirelessly from personal music players like iPod," he says.

LG has announced the launch of MP3 and MP4 players, that are priced between Rs 3,000 and Rs 12,000, while the car audio systems would be available at a price range of Rs 5,000-60,000. LG's buoyed sentiments in the audio-video category will see a marketing spend of nearly Rs 5 crore in the second quarter of 2007.

Sony, too, has revitalised its range to introduce superior technology "" with the new head units in the range offering USB and Bluetooth connectivity features.

Vivek Handoo, product head (in-car entertainment), Sony India, says, "Currently, 10 per cent of the market is for the high-end customer, but with changing market dynamics, this section will in a couple of years constitute 20 per cent."

Sony India is hoping that as consumers become more discerning about the new age technologies, especially in the youth segment, in-car entertainment will slowly make a shift from just entertainment to utility.

Handoo's reasoning stems from the fact that there indeed is a considerable time gap between vehicle manufacturing and supply of standard in-car entertainment products by associated suppliers, which is why the original equipment (OE) segment constitutes only 5 per cent of the car entertainment business.

"A majority of the business for this category is a result of after-market sales," he says. Sony is present both in the OE segment as well as in post-sale retail with accessories that allow consumers to upgrade audio equipment.

Nippon, which claims a market share of 65 per cent in the OE market and 20 per cent in the after-sales market, has added cutting edge products that are priced between Rs 7,490 and Rs 20,490. Going forward into 2007, the industry expects the lucrative MP3 player market to be dominated by replacement sales.

But Nippon is planning to concentrate on the OE market where it considers itself to be the strongest player and is in talks with the car companies for their forthcoming models.

For this year, most suppliers agree that amplifiers and speakers could see flat sales, with plain-old CD player sales declining up to 4 per cent. But, it will be balanced consumers outlook to invest in more "cool devices" like audio/video outputs that allow one to expand car infotainment systems by connecting portable music players, rear seat TV screens, external amplifiers, powered subwoofers, and even gaming and mobile phone accessories wirelessly.