Navigating to new profits

As long as there have been automobiles, people have tried to make them a little bit like home. In the early days, when the car was something of a novelty, some enthusiasts hooked up domestic audio equipment, the old 78 rpm record players to be precise, to the car to have a little music while on the road.

While such a jerry-rigged contraption may have worked, one cannot vouch for how good the audio quality was or how easy it was to change discs. In the 1930s, Galvin Manufacturing Corp. introduced the first commercial car radio, the Motorola 5T71, and in Germany Blaupunkt attached their first car radio to a Studebaker; and in the UK Kingdom Crossley offered a wireless for owners of their 10 hp cars in 1933.

Today, car electronics have exploded beyond the simple car radio, encompassing everything from advanced audio systems that can play MP3s and directly hook onto iPods and other digital devices, to navigation systems, DVD video, rear parking cameras and tire pressure monitoring systems. And this market is now one which boasts some pretty impressive profits.

IC Insights, a Scottsdale, Ariz.-based market research firm, said in a 2007 IC Market Drivers report that today’s automobile is a fertile environment for new kinds of high-tech systems and components. Part of this is being driven by consumer demand, but also by new government regulations for things like pressure sensors and safety systems to be in vehicles. If fact, the IC Insights predicts this year alone the market for advanced electronics and systems for vehicles will reach US$13.2 billion by the end of 2007, up seven per cent from 2006; and will reach US$17.2 billion by 2010.

Safety a big driver for new car electronics

Roni Prizant, president of Unique Visions Auto Styling in Concord, Ont. has been modifying cars since he was 15 years old. After starting and growing a successful electronics business, Prizant decided to combine his love of high-tech and cars, and started Unique Visions in 2005. The company which employees six trained technicians and has two locations, the second being in Newmarket, Ont., specializes in installing a wide range of technologies in today’s automobiles, from car audio and multimedia systems, to navigation and safety technologies.

In the past two years, Prizant has seen more vehicle owners wanting to install rear-view cameras, particularly for the safety benefit it can bring. A rear-view camera is especially useful in that it allows the driver to see more clearly what is really behind their car or SUV as all vehicles have blind spots behind them regardless of whether the vehicle is high off the ground or has a large windshield in the back. That blind spot can be a potential safety hazard.

“If a person has a doubt of having a rear-view camera, all you have to do it this,” Prizant added. “Tell them to pay attention to you and have them back up when they feel it’s safe. Now walk around to the back of the SUV so they can see you walking past the vehicle in the rear window. Now crouch down on the second walk (back there) but lower down than the rear window. I can guarantee you the driver cannot see you anymore and they naturally assume nothing is behind them and they begin to reverse. This is when you scream for them to ‘Stop’ and you say, ‘You just ran over a kid.'”

Enzo Turco, a salesperson with Toronto-based Kromer Radio Ltd., which has been installing car electronics and systems for 50 years, said rear-view camera technology has been one of the fastest growing segments for Kromer Radio because of the safety benefits it offers to drivers.

He added even navigation systems are another technology car owners are looking at installing, not only for the convenience factor of knowing where one is, but also helping in getting safely to a destination.

Safety is even driving the adoption of Bluetooth hands-free phone technology for the car. The Bluetooth technology allows a phone call to come to the driver, but instead of the driver having to fumble about for the cellular phone and thereby increasing the danger to themselves and others on the road, the Bluetooth system simply picks up the call and routs it through the car’s audio system, allowing the driver to keep their eyes on the road. Some systems are so advanced that a screen can be built into the vehicle dash which can display who is calling, giving the driver an option of either accepting the call or sending it to voice mail. There are several Bluetooth aftermarket kits available, one being from Parrot USA which offers several Bluetooth car phone kits, and Motorola has the HF850 Bluetooth Car kit.

Tire pressure check goes high-tech

Where independent service providers will likely see the most immediate profit possibilities is with tire pressure sensors. Under the TREAD Act in the United States, all new vehicles manufactured in 2007 must have tire pressure monitoring systems installed that will warn a driver when the tires are under inflated. The systems are made to improve driver safety as under-inflated tires can be a potential driving hazard.

The Frost & Sullivan research firm predicts strong growth in the installation of aftermarket tire pressure sensors as car owners discover the benefits of such systems, both in terms of improved safety and the better gasoline mileage from having tires that are correctly inflated.

Bob Bignell, administrative director for the Drayton, Ont.-based Ontario Tire Dealers Association (OTDA) said the OTDA already provides training for technicians on how to properly maintain tire pressure sensors and valve systems in new vehicles, as technicians have to get up to speed on the technologies if they want to service today’s newer vehicles.

“From the standpoint of when you are changing a tire, we recommend that you also take the time to inspect and service the sensor,” Bignell said. “And there are excellent (service) kits available which can help in replacing the grommet and vale cap seal and nickel-plated core. You also have to know how to torque it in correctly and these kits do come with tools you will need.”

That’s Entertainment! — And you need the training to do it right

The biggest market growth in the aftermarket for car electronics after navigation systems and Bluetooth cellular will be entertainment systems.

Kromer Radio’s Turco said a growing number of mini-van and SUV owners are coming to Kromer looking to have an entertainment system installed, be it DVD systems or iPod connectors. The reason is that many of these owners have kids and spend a great deal of time ferrying them to school, sport events and family vacations. An entertainment system allowing the kids to watch a movie or listen to music without disturbing the parent driving is something that outweighs whatever the cost is of the system and its installation.

However, installing such systems correctly is a bit tricky and not everyone can or should do it.

Unique Visions’ Prizant said vehicle electronics today are so complex and rely so heavily on computer systems that installing even a simple MP3-enabled audio system requires the technician to have an advanced knowledge of car electronics.

“Your installer must understand car electronics much more today in order to do a correct install of any kind. For example, a lot of newer vehicles these days don’t have accessory power as they once did, so you have to create your own accessory power, or install an appropriate module to correct the issue,” Prizant said.

Prizant added any technician planning to enter this market needs to first get the proper training, for example, from Mobile Dynamics in Thornhill, Ont.

Mobile Dynamics offers an eight-week accredited program that takes a technician through the basics of car electronics and diagnostic tools on up to the proper installation various kinds of devices to a vehicle’s complex electronics.

But that is just the start. After getting that basic certification, all installers of car electronics say a p
rospective technician will have to get up to some 4,000 hours of hands-on work as well to be considered qualified.

“You just can’t be a guy who comes out of university or college, or even a training school, and start installing,” said Prizant. “My head installer here has been installing for over 15 years and is an Automotive Electronics Accessory Technician government certified, and has his Mobile Dynamics certificate.”

There is also another challenge and that is from the vehicle manufactures as well. Having seen the growth of this market, many car makers are incorporating entertainment, navigation and rear-view camera technologies into their newest vehicles. The 2008 Ford Escape is slated to have as standard equipment an MP3/iPod audio jack and the 2008 Buick Enclave will come with a built-in dash navigation system; the 2007 Chevrolet Silverado is equipped to take a ceiling mounted DVD player.

Kromer’s Turco said he knows about the car manufactures moving into this market, but suggests aftermarket installers of such technologies have a unique advantage. In many cases, the auto manufactures will charge a premium to have vehicles come equipped with the systems, much more than simply going to a qualified aftermarket installer of such technologies. As well, many dealers are not, according to him, interested in installing the systems themselves as an accessory because of the complexity of doing so. In fact, Turco said Kromer gets a lot of business from the dealers who send interested customers their way for installing the technologies. Often those technologies will be of a better quality than what the car manufacturers can offer.

“A lot of vehicles are coming with video,” Turco said. “But for the same price (as a dealer) we can offer you such things as a larger screen, better quality and we can offer a three year warranty instead of one.”

REFERENCE LIST

Kromer Radio Ltd. www.kromerradio.com

Mobile Dynamics www.mobiledynamics.ca

Motorola Canada www.motorola.ca

Ontario Tire Dealers Association www.otda.com

Parrot USA www.parrot.biz.usa

Unique Visions Auto Styling www.uvisions.ca