Feature Story:
In-dash car radios, amplifiers and automotive backup cameras are on the list of the next round of Chinese products due for a 10 or 25 percent tariff, which could go into effect early this month.
This would mark the third round of tariffs, with the first two impacting many 12 volt parts from speaker magnets to LED lighting diodes. Those tariffs went into effect July 6 and August 23rd.
But it’s the third round that may have the biggest impact on car audio.
The Consumer Technology Association (CTA), said the following products are on the list of Chinese imports slated for a tariff:
- In-dash radios
- Anything using Bluetooth
- Electrical rangefinders use for vehicle safety
- Electrical signaling equipment for motor cycles or vehicles
- Automotive backup cameras
This third round of tariffs would be the largest by a wide margin. Where the first two rounds affected $50 billion in goods combined, the third targets a sweeping $200 billion in Chinese import goods.
JL Audio, Cedar Electronics (Escort/Cobra) and Epsilon Electronics (Soundstream/Power Acoustik) all said that car audio amplifiers are on the third round list.
Public comments on this latest round of tariffs end Thursday, September 6 and Bloomberg reports that the Trump Administration wants the tariffs to take effect almost immediately afterward.
Several retailers said they are not averse to price increases, as the “race to zero” in car audio pricing leaves less room for profits. As Todd Hays of Columbus Car Audio, OH noted, “To be honest, I don’t think an increase in some of our prices is a bad thing…You see the price drop on some core products and you think, ‘Why are we lowering this price? We sell it all day long at X and now we’re going to sell it at Y.’ But if we lower the price 20 percent, we have to sell 20 percent more boxes. I hate lower prices.”
Maybe the long term effects of the temporary tariffs will be to bring manufacturing back to the US. I would love to see amp manufacturing back in this country.
You do realize that cost will go up too, right? It raises ASP but net margin is effectively the same. The prices increases would be pass through.
Here’s a great game next time you are out to dinner with a rep or vendor. Ask everyone to pull out their business card. Select one item on the table. Ask everyone what they think the selected item should sell for. Then have them write it down on the back of their business card and turn that card with the price they wrote face down. Flip the cards over one by one and have each explain how they came to that selling price decision. Odds are no one will match…and there will be a 25-50% difference in everyone’s pricing. That will just tell you can get just about any price you set for any product…if you make it affordable…and you can justify it. Sell the sizzle…and the benefits! The tariffs will have some impact…but, if ASP’s go up 20% and the tickets increase in size…life will go on just fine!
I couldn’t agree with Todd more. I’ve been saying the same thing for years.