Westlake Village, CA (August 30, 2005)–Premium surround sound systems and high-definition (HD) radio are highly attractive features consumers would like to see in their new vehicles based on their estimated market prices, and consumers prefer to pay a one-time fee over a monthly subscription for satellite radio, according to the J.D. Power and Associates 2005 U.S. Automotive Emerging Technologies Study.
The study measures consumer familiarity, interest and purchase intent for emerging automotive technologies both before and after an estimated market value is revealed. While consumer interest in new technologies typically drops after a price point is revealed, relative interest in premium surround sound and HD radio actually improves dramatically after the market price is provided. Premium surround sound, which ranks sixth in consumer interest before the price is revealed, moves to second after consumers learn its market price ($400). With a realistic market price of just $150, the HD radio-compatible receiver jumps from 16th in initial interest to third after pricing is revealed.
“What is truly surprising is that among those interested in equipping their next new vehicle with the premium surround sound feature at $400, nearly 80 percent of those are willing to pay $800 for a branded system,” said Lawrence Wu, senior director of automotive emerging technologies at J.D. Power and Associates. “This suggests that automakers and audio suppliers could add value to their products for consumers, while increasing their returns. While we have seen the availability of branded sound systems increase the past few years, it’s evident from this research that there is sufficient consumer demand to warrant equipping a much broader vehicle segment base.”
Consumers still express more interest in satellite radio than HD radio prior to the introduction of price, but interest falls below HD radio at the realistic market price of $12.95 per month for satellite radio. The study shows that more consumers are willing to pay a one-time fee as opposed to paying monthly for the service.
J.D. Power and Associates