The days of do-it-yourself stereo system and subwoofer installations in cars are long gone, supplanted by smartphones and connected car telematics. So, is the automotive electronics aftermarket over? To get insights and answers to the question, Dealerscope asked two leaders in the automotive electronics space, Andrew Poliak, CTO of Panasonic Automotive Systems of America, and Joseph Sherbondy, Director, Radar Category at Cedar Electronics, the parent company of Cobra Electronics and Escort.
Andrew Poliak, Chief Technology Officer, Panasonic Automotive Systems of America:
Dealerscope: With all the advances in infotainment systems now in vehicles, is there much of an aftermarket left for what used to be called the 12-volt market?
Andrew Poliak: We ship about 16 million cars a year, so there are still tons of cars that are old that need modern technology. So, there’s still a legacy market. But going forward there’s a level of integration that makes it more difficult to upgrade.
But look at the history. First it was the radio that was integrated with speech recognition and navigation; those used to be separate. The next stage was cockpit controllers, where it is all coming from one box. It became nearly impossible for an aftermarket device to plug into that. With ADAS (advanced driver assistance system) any integration also requires a level of safety, and safety certification, and that makes any integration really difficult.
Although there’s room for speakers and cameras – but even that is difficult. For example, Toyota launched a trailer that uses a camera of ours; not only does it allow you to live stream what is going on behind you, it also integrates into the head unit and the rear-view mirror so you can still see behind you. That level of integration requires a deep knowledge of the car’s system. So, as for the aftermarket, it’s going to get more difficult every year.
DS: Are most head units and other upgrades for cars now performed by professional installers?
AP: I think there’s a legacy answer and there’s a “going forward” answer. In an ’80s Camaro or Corvette, you can do the installation yourself. I was an installer in the ’80s and ’90s. I might be tempted to replace the speakers, but even that will get more challenging in the future. At the last CES, we showed EV Audio. [EV Audio is designed to lower power and weight demands for electric vehicles.] It uses small speakers in the dash and a subwoofer and removes the speakers in the door. Instead, it uses windshield reflection to make a huge, beautiful sound. So OEMs are building very custom environments for the audio.
DS: Is there an opportunity for third party products based on the connectivity (cellular and Wi-Fi) built into vehicles now? Or has it all moved to connected smart phones?
AP: It’s all related to software, but that’s not to say there won’t be an opportunity for software, or other solutions. For example, anything that can be self-contained, such as a drive recorder or a radar detector. And there are new things coming such as external microphones to detect emergency vehicles, so there might be new applications for those systems. OEMs may expand ways of monetizing those systems. Some of that is happening now, with navigation: Are they going to pay for it to be integrated? People are using their brought-in devices now, but integrated navigation will be needed for autonomous driving. And there are built-in screens. The BMW Series 7 has a huge screen that rolls down in the back. It allows for more downloadable content, such as Dolby Atmos for surround sound. But the trend is toward deeper integration, for instance active noise cancellation, even in commercial trucks. There will be more ways to customize it, but it will be more a part of the software.
DS: What automotive accessories (consumer electronics) do consumers still seem to be interested in and what do you see the future trends in the space to be?
AP: Dash cams are extremely popular in Asia and in some portions of the former Soviet bloc countries, it can be admissible as evidence. We do have a lot of those camera systems in Japan. And there are taxi and emergency vehicles that can upload that content. There might be other ways to do some of those features in the future with augmented reality systems and head-up displays. But there are still opportunities for anything that requires a lot of storage. Automotive grade flash memory is incredibly expensive; dash cams are using consumer grade memory, which lends itself to being a better aftermarket solution. Drive recorders are another solution, but driver monitoring is becoming a safety requirement in Europe. It’s a tricky one [in terms of privacy worries in the U.S.]. In the EU it is being mandated, and they are going to have in-cabin cameras. We have a windshield reflected IR camera for HUD [head up display], and it is being used to manage the fidelity of the image as you move your head, and you don’t lose the eye box – that is its only purpose.
Joseph Sherbondy, Director, Radar Category at Cedar Electronics (parent company of Cobra Electronics and Escort).
DealerScope: Is there a current demand for automotive accessories in the 12-volt market?
Joseph Sherbondy: There is a great market for automotive accessories in the 12V market. Consumers still focus on products that will keep them safe and informed. There are a number of large brands who participate in this market across multiple categories. We can also see this in the growing level of interest in certain categories such as “Dashcams” on Google Trends. And while “Radar Detector” may have fallen slightly vs. the peak in previous years, interest remains very strong and is on an upward trend.
DS: What car accessories are consumers still purchasing and why?
JS: Radar detectors, dash cameras, CB radios, power (inverters, portable power) just to name a few of the categories we participate in.
DS: What do you think future trends will be in the automotive accessory space?
JS: The market continues to be an area of growth for us and others. Smartphones and OE vehicle tech can’t offer or address all of the consumers’ needs in both new and used cars. Most people tend to think of the new car market. Keep in mind the used car market is twice the new car market (forecasts for 2023 $35.7M for used and $15M for new). Couple this with average consumers keeping their vehicles for over 10 years and the market will remain strong for accessories for the foreseeable future.
DS: Smartphones have really taken over as the primary car accessory, but is there opportunity in terms of other products or services?
JS: Smartphones are certainly an integral part of vehicle use as an accessory. Other aftermarket 12V products such as radar detectors and dash cameras utilize the smart phone through the use of companion apps. Smart phones by themselves can be limited in their use. For example, you could use the smart phone as a dash cam, but you would not leave it in your car when you park and go. A mounted dash cam will monitor motion and record incidences while the vehicle is parked. Radar and laser detectors have the ability to detect threats far in advance. For example, while the use of apps such as Waze are powerful with crowd sourcing, police will use unmarked vehicles and will move, limiting the effectiveness of an app by itself. When combined with hardware, the addition of a smartphone can be a very powerful tool. Our users rely upon our vehicle Wi-Fi integration capabilities for live server data, communication, and software updates from the convenience of their vehicles.
Since almost every driver has a smartphone with them, but many distracted driving laws prevent drivers from constantly interacting with their phones, we will continue to see growth in connected devices that provide more information, awareness, and safety and that do not require direct smartphone interaction. For example, Waze pioneered crowdsourced traffic alerts, but the flip side is that it requires people to generate the data on their phones. On the other hand, when you connect one of our radar detectors to our Drive Smarter network, it is not the human that needs to generate the alerts but the detectors themselves. This machine-to-machine sharing and reporting of data is more accurate than crowdsourced data, and doesn’t require human interaction. Our connected dash cams also benefit from this network by being able to receive shared alerts from our connected detectors. That’s why our Drive Smarter network has been called “Waze on steroids.” The more sensors and devices we add to the network, the more it will benefit all users without the need for anyone to enter in their data manually.