Makers are banking on product customization and add-ons to spur growth in the car CD player line.
China’s car CD player manufacturing industry is moving toward value addition and feature customization to boost margins in the mature sector. Even though the line remains a major category in the country’s in-vehicle audio market owed to its price advantage, competition from more advanced car electronics could dent sales.
Makers’ product enhancement efforts generally center on strengthening customization capability to match users’ requirements. R&D work revolves around adding private panels or improving aesthetics, and incorporating user-friendly interfaces or other upscale specifications. Huizhou Foryou General Electronics Co. Ltd, for instance, provides optional output end design, including 4-channel 2V, 2-channel 4V and 4-channel 4V line- and sub-out. Huizhou Desay Auto Electronics Co. Ltd offers car CD players for buses and vans that have 24V power output.
Suppliers also offer remote control, RDS and built-in Bluetooth as add-ons. For wireless technology, makers offer buyers several modules based on different ICs to cater to varying cost requirements. Such options, however, generally support Bluetooth advanced audio distribution, A/V remote control or handsfree profile. There are also models with interfaces that allow connection to the iPod and iPhone. Many are likewise integrating USB ports and card reader functionality.
Universal 1-DIN configurations are mainstream, but 2-DIN variants are rising in number. Some tier 1 manufacturers provide versions in the last design. These multidisc car CD players have a storage playback mechanism and an auto CD loader that works with three to 10 discs.
More companies are shifting to color LCDs from single-color or VFD variants. Although fixed panels are mainstream, detachable types are available.
Still another trend is the 3-in-1 design. With the cost of MP3 decoder chips going down, a growing number of enterprises are releasing models with CD, radio and MP3 functions rolled into one.
2-in-1 car CD players still mainstream
Expanding overseas markets of car CD players
Hong Kong: Makers focus on upscale integrated variants
Basic releases from China are usually 2-in-1 variants with CD players and AM/FM radios and are preinstalled in economy cars. These have clock display, equalizer, volume setting and mute buttons.
Mainstream units read MP3 and WMA formats, and have a USB port and card reader. Built-in MP3/WMA decoders allow users to play music directly from USB devices and memory cards. Fast music, file directory and ID3 tag displays, and repeat, random play and multiple preset equalizer functions are integrated as well.
The CD loader, IC and display are the most important manufacturing inputs, determining product performance and price. The first is sourced mostly from domestic suppliers. Tier 1 enterprises such as Huizhou Foryou make their own CD mechanisms. Foryou, Kingpai and Shinwa are the mainstream local brands. Other enterprises integrate components from Clarion and Komec. Laser heads from Sanyo and Hitachi are the top choices for those targeting a higher performance-to-price ratio. CD mechanisms from Sony, Panasonic and Tanashin can also be adopted on request.
For chips, few tier 1 suppliers have the capability to develop their own solutions so most are sourced from third-party design houses, with those from Sunplus and Toshiba being the popular options. MCUs, decoders, amplifier ICs and tuners are from leading providers Samsung, STMicroelectronics, Toshiba, Rohm and NXP.
Car CD player manufacturers generally capitalize on the segment’s competitive advantage in terms of price and established niche in the in-vehicle audio system market. Mainstream models are currently $30 to 50, while a 2-DIN DVD player with a screen exceeds $80.
Some OEM clients, however, have strict requirements in terms of product design, raw materials used, and manufacturing and testing processes, which raise quotes. Units from tier 1 makers are offered at a slightly higher price of $40 to 60. Releases with Bluetooth functions require an additional $8 to $15 depending on the module and license fees. Another $1.50 to $3 is added for RDS, and iPod connectivity accounts for an additional $3 to 5. Enhanced models with multidisc capability list at $100.
Overall, prices of car CD players are expected to remain stable in the next six months. Some suppliers have increased quotes by 2 to 3 percent in response to the continuous appreciation of the yuan. To keep rates down, companies provide buyers with several options for the chips and modules. Makers usually offer at least two series of ICs. Vehicle Electronics Co. Ltd, for instance, lets its clients select between Sunplus and Toshiba solutions.
Europe is still the primary market for the majority of China suppliers, but more companies are eyeing emerging areas such as South America to boost margins. To penetrate new export destinations, manufacturers are integrating user-friendly interfaces and including manuals in the local language in the package.
Xinhui Goodbee Technology Co. Ltd, which focuses on the aftermarket, ships car CD players to Eastern Europe, South America and Russia.
Besides these locations, Desay’s releases go to the Middle East. Europe, Brazil, India and some countries in Southeast Asia are the target markets of Vehicle.
In general, tier 1 and midsize China suppliers work closely with car manufacturers as this ensures better sales and guaranteed niche markets despite detailed requests on product configuration.
Foryou has been collaborating with a foreign vehicle specialist. Meanwhile, Vehicle delivers car CD player parts to an automotive factory in Turkey.
Hong Kong manufacturers of car CD players are cutting down on new product development in favor of high-value in-vehicle electronics such as DVD players, GPS navigators, entertainment systems and PCs. Car multimedia and MP3 players, in which the SD card slot and USB port have replaced the CD loader, are occupying a steadily expanding share of rollouts.
Besides the CD loaders, suppliers are providing several optional features. In terms of audio entertainment, there are MP3, WMA and Ogg Vorbis playback, connector for the iPod and iPhone, and built-in flash memory. Radio options include PLL AM/FM and RDS. For communication, makers can integrate a Bluetooth module for enabling handsfree mobile phone calls.
There are about 30 manufacturers of car CD players in Hong Kong. Each supplier offers dozens of models, many of which have similar internal components and circuit boards, and differ mainly on the faceplate. Despite the cost pressure, companies insist on sourcing tried-and-tested inputs such as ICs from South Korea and Japan, and LCD panels from Taiwan. Most deck mechanisms are from the first two.
Manufacturers refresh their lineups regularly, turning out eight to 12 new models each year. As such, they invest in tooling and mold-making equipment and automated insertion and soldering machines. Many are enhancing capability for full customization services and upgrading QC systems to comply with buyers’ stringent quality requirements. Some R&D teams are even reinforced with foreign recruits, typically from South Korea, to complement the engineering staff, most of whom are from the territory and mainland China.
Cartek Electronics Ltd can customize a client’s design within 45 days, carrying out all production processes in-house. Its R&D department is composed of 40 engineers responsible for software and hardware design, and electrical engineering. The company’s selection includes more than 100 car CD and multimedia players.
Superior Sound Car Audio Fty Ltd, which has been in the in-car entertainment system business since 1994, offers entry-level manual tuning car radio cassette players to all-in-one, custom-fit designs.
A subsidiary of the SCE Group, SCE Multimedia Co. Ltd has more than 30 models of car CD and multimedia players, and GPS receivers. One of its latest releases from the first category is the KSC107 model, which has an AM/FM-RDS PLL receiver. The unit plays back CD, MP3 and WMA files, and integrates an SD/MMC card reader.
Cartek Electronics Ltd
Huizhou Desay Auto Electronics Co. Ltd
Huizhou Foryou General Electronics Co. Ltd
Huizhou Saisun Electronics Co. Ltd (mainland China)
Jiangmen Xinhui Goodbee Technology Co. Ltd
SCE Multimedia Co. Ltd
Vehicle Electronics Co. Ltd
Note:This article was originally published by Global Sources, a leading business-to-business media company and a primary facilitator of trade with China manufacturers and India suppliers, providing essential sourcing information to volume buyers through our e-magazines, trade shows and industry research.
All price quotes in this report are in US dollars unless otherwise specified. FOB prices were provided by the companies interviewed only as reference prices at the time of interview and may have changed.
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