China's car MP3 player industry and market trend
2008-08-19

                           China's car MP3 player industry and market trend

China is home to over 50 manufacturers responsible for producing more than half of the world's supply of car MP3 players and FM transmitters, estimated 60 to 70 percent. As demand for in-car audio products continues to skyrocket, makers are ramping up their production capacities and are coming out with better quality models with sleeker designs. In 2007, China shipped more than 20 million car Mp3 players and FM transmitters overseas. North America and the EU are the largest export regions because of their mature car industries and high acceptance of digital audio technology. And it is said that the total manufactures of car MP3 players are expected to increase by more than 10 percent while the global demand for car MP3 player is growing. To cope with the anticipated demand growth, many makers plan to expand their manufacturing capacity, some by up to 50 percent. However, the supplier base of 50 makers is unlikely to undergo significant expansion because of the increased production costs and fierce price competition faced by suppliers in the industry over the past two to three years. Certainly, the industry is relatively small compared to other digital industry in our country. Some companies are also gradually turning their attention to producing other types of in-vehicle electronics and reducing the share of car MP3 players and FM transmitters in their total sales. The following are some of the key trends we see in China's car MP3 player industry: - Export prices are expected to rise in 2008 as a result of rising raw material and labor costs. Intense competition among suppliers, however, will limit price increases to within 5 percent. - The quality of China-made car MP3 players will improve in the coming months as suppliers place greater importance on quality control and minimize defect rates. - Future releases will have sleeker designs - featuring touch button controls, metallic cases and water resistance. More FM transmitters compatible with iPod and iPhone series will also be released. - The majority of suppliers will raise their production capacity by 20 to 50 percent mainly by upgrading their existing facilities. - More suppliers will also enhance efficiency by automation and simplifying their production processes as part of their effort to manage increased labor cost. The following are some of situation we see in China's car MP3 player market: Designs began attention Following the trend in the forefront of IT, digital industry, surface design has been developed as a business focus. In 2007, surface designs in the car MP3 field began to get the unprecedented attention. In early 2007, a latest New Car which is mainly selling point of its design was grand displayed on Langke news conference held in Shanghai. This is the first products own a thickness of only 7 mm since the domestic car MP3 was available in 2003. Unique sense of design brings it a sure win from the market certainly,and quickly set off a "ultra-thin mirror" fashion. Insiders pointed out that after the car MP3 functions gradually improved, manufacturers began to spend more time and energy to consider the design to make a different appearance between the similar products of this field. From this perspective, the car MP3 designs in 2007 are valued and promoted and the market is entering a period of rapid development of positive signals.

Huge market yet to be excavated According to CCID statistics, in the first half of 2007, the traditional Chinese MP3 player market decrease 52 percent. In sharp contrast, high-speed car MP3 has soared and become a bright spot in the market. According to statistics, in the past three years, only the number of private cars has increase by 10 million. And with continuing development of the digital entertainment industry, to enjoy high-quality digital music while driving has become majority owner’s pursuit. It is learnt that among the domestic private car owners, car MP3 has got the awareness as much as 95 percent. What’s more, the accounting of consumers who are willing to have a try also reach 60 percent. The CCID Consulting statistics show that China-made sedan car MP3 player pre-installed rate has reached 12.8 percent. Some analysts believe that the capacity of car MP3 market is of billions. An unprecedented show of the new market is in the car in front of MP3 players. Merchant level mixed At present the domestic car MP3 market is in the development of the second stage. According to statistics, among the domestic car MP3 player manufacturers, besides MP3 leading brands Langke, there are hundreds of other manufactures rapidly accumulating in just two years. Like OPPO, BENQ, GEME and other well-known brands, certainly including some other brands. These vendors compete or at a low price to win, or for the foundry industry, or with great concentration, or fish in troubled waters. This makes that the quality of car MP3 players is uneven.