Retail current value sales of in-car entertainment are in long-term decline, and COVID-19 restrictions accelerated this trend during 2020. With consumers spending more than at home and moving around less, they were much more inclined to spend money on home entertainment than in-car entertainment during the year, with demand for in-car navigation particularly weak.
TomTom International BC will strengthen its dominant position in in-car navigation in 2021, with Garmin France SAS accounting for most of the remainder. Both of these manufacturers benefit from a high level of brand recognition and a strong reputation for quality, enabling them to hold off smaller rivals offering cheaper products.
Other non-grocery specialist retailers will remain the leading channel for in-car entertainment during 2021. While this channel is steadily losing retail volume share to e-commerce, it is doing so at a much slower pace than in most other types of consumer electronics.
Retail current value sales of in-car entertainment will decline at an accelerating pace over the course of the forecast period. On the one hand, smartphones and (to a lesser extent) wireless speakers will continue to cannibalise demand for these products, particularly in-car navigation, while new cars will increasingly come with higher quality in-car entertainment that fewer consumers will feel the need to upgrade.
Despite having displayed resilience to the economic shock of COVID-19 than new cars, demand for used cars looks set to be subdued during the first half of the forecast period. The lingering economic shock of the pandemic will play a role in this.
With in-car entertainment sales in seemingly terminal decline, manufacturers are increasingly diversifying into other areas and shifting their focus to the supply of integrated systems to car makers, with some ceasing production of aftermarket components altogether. Over the forecast period, it is likely this trend will result in the competitive landscape becoming more consolidated, while also limiting new product development.
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This report originates from Passport, our In-Car Entertainment research and analysis database.
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