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In 1994, the in-car entertainment market was worth
an estimated £471m, accounting for a 9.4 percent share of total consumer
spending on audio-visual products. Value sales in 1994 were 5.1 percent up on the 1993
total, while volume sales increased by 6.4 percent over the same period.
The
main products included in the market, are combined radio cassette players,
radios, cassette players, compact disc (CD) players and loudspeakers and
amplifiers sold separately. Combined radio cassette players dominate sales, and
accounted for 70 percent of the value of the market in 1994. CD player sales are
growing, but they still only accounted for 10 percent of all value sales in 1994.
Loudspeakers accounted for 17 percent of value sales, and 51 percent of volume sales in
1994.
The market segments into two sectors: the original equipment
market, where audio equipment is fitted to new cars usually on the production
line, and the aftermarket, where consumers upgrade or replace their systems by
purchasing equipment through various retail channels. By the mid-1990s, an
estimated 93 percent of all new cars were fitted with some form of in-car audio
system, and the original equipment market accounted for 50.7 percent of the overall
market in value terms, and 55.9 percent in volume terms in 1994. However, the
aftermarket has shown the strongest growth in recent years with new technical
developments, such as CD players, and new digital formats such as digital
compact cassettes (DCCs) and mini discs (MDs), being targeted at this
market.
Sales in the original equipment sector are inevitably linked to
new car sales. New car registrations fell in 1990 and 1991, with obvious
repercussions for the original equipment market, but new car sales recovered
significantly in 1993 and 1994, and the original equipment market is growing
again.
The number of companies supplying the in-car entertainment
sector has grown over the last decade. Many of the leading names in the
industry are Japanese-based companies with marketing and distribution
subsidiaries in the UK, and these include Pioneer, market leader in the in-car
entertainment aftermarket, Sony, Panasonic, Clarion and Alpine. The major
competitors to the Japanese companies include Philips, Goodmans, Bosch, and
Audioline. The car manufacturer Ford is also a leading supplier.
Year-on-year increases in new car registrations over the next few years,
coupled with further product developments and increased disposable income,
should provide the basis for healthy growth in the market up to 1998 at least.
In 1995, Key Note expects the market to reach £495m, while by 1999, it is
forecast to reach £566m, a 20.2 percent increase on the 1994 value.
Text © 1995 Key Note
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Last updated by Duncan Nottage 5th March 1999