By Amy Gilroy
David McNamara was Infotainment Manager at Ford Motor Company (NYSE:F) until 2006. He was also a panelist at CES for the seminar “Are Automakers Running the Aftermarket off the Road.”
Here’s what he said about the aftermarket from Ford’s point of view. “We had a love-hate relationship with the aftermarket. We could see they were doing things we couldn’t do. Chief engineers would come to me and say, why can’t I have that [subwoofer] in my car. I would make excuses.”
He continued, “That has changed. The digital world has disrupted our lives. The customers want to use the smartphone in the car.“
The car companies are now spending as much a third of their research and development budgets for the entire car on infotainment, he said. A third of the R&D budget for the WHOLE CAR. That’s a lot of money considering that many aftermarket companies have reduced their R&D budgets due to belt-tightening.
McNamara says the OEMs are really in an experimental phase when it comes to infotainment. “This is a disruptive time for us. The losers are the traditional suppliers…The OEMs are going directly to the technology partners.”
During the seminar Lonnie Miller of R.L. Polk, also noted that there’s a lot of pressure on the car makers to get the infotainment system right. They’ve “got to nail it.” He said, “The car companies have to wise up quickly because they are responsible for a good experience for the consumer. Everyone’s stretching themselves a bit.”
The average age of the cars on the road is approaching 11 years, an historic high, said moderator John Stewart of SEMA.
Both Jim Braun of Dual Electronics and Tom Malone of Audiovox Electronics ( VOXX International Corp., NASDAQ:VOXX) were also on the panel and said there is still plenty of opportunity for the aftermarket. Now that car makers are including more technology, it raises awareness of those products for the aftermarket, both said. Also technology continues to update on a shorter life cycle than that of a car.
“The aftermarket has every opportunity the OEMs have, like new technologies like wireless charging and Near Field Communication and they can react faster. But our industry has to understand it’s not the industry we’ve been in for a long time. We have a different complexion,” said Malone.
Braun noted, “You may see fragmentation [many different product groups in the aftermarket like remote start as well as subwoofers], but there will be demand for new products in the car. By the time the car is 3 or 5 years old there are going to be so many choices of newer technologies available in the market. I don’t see that ever changing.”
He said “on dash” is going to become a bigger factor in aftermarket products as opposed to “in dash.”
Amy Gilroy is the Editor of CEoutlook and a Contributing Author to Market Playground and Satellite Radio Playground. Amy has been a fan of car audio longer than she cares to admit. At age 17, she was told an amplifier could make the car radio sound better, and from then on, she was hooked. Prior to launching CEoutlook, she was a Senior Editor at TWICE magazine.
Contact Amy Giroy: firstname.lastname@example.org