There's always been a disparity between what consumers say they want in a new vehicle and what they're willing to pay for it, and that trend continues with the latest edition of the J. D. Power and Associates U.S. Automotive Emerging Technologies Study.
Safety technologies are always the top draws for consumers, even if they might pass them over when faced with the actual price.
But when it comes to premium surround sound systems and high-definition (HD) radio, the study finds, consumers interest actually goes up when the market prices are taken into account.
Lawrence Wu of J. D. Power explains that 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, Wu explains, "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 (all figures quoted here are in US dollars), and 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," says Wu, "nearly 80 percent of those are willing to pay $800 for a branded system."
For Wu, who is the 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."
Please note that there is no talk here of better sound from inside these systems, just a more famous label on the outside.
Consumers still express more interest in satellite radio (which is set to debut in Canada this fall) than HD radio prior to the introduction of price, says Wu, 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.
"Even though satellite radio is at an advantage over HD radio by offering commercial-free content and coast-to-coast coverage," notes Wu, "interest in HD radio is higher than satellite radio after the introduction of price."
On top of that, says Wu, consumers in general would rather pay once for a feature, and have been reluctant to embrace subscription fees. "This is evident in the trade-off exercise in this year's study, in which almost twice as many consumers chose lifetime (life of vehicle) satellite radio with a one-time $499 subscription fee compared to a one-year option."
Safety technologies are always the top draws for consumers, even if they might pass them over when faced with the actual price.
But when it comes to premium surround sound systems and high-definition (HD) radio, the study finds, consumers interest actually goes up when the market prices are taken into account.
Lawrence Wu of J. D. Power explains that 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, Wu explains, "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 (all figures quoted here are in US dollars), and 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," says Wu, "nearly 80 percent of those are willing to pay $800 for a branded system."
For Wu, who is the 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."
Please note that there is no talk here of better sound from inside these systems, just a more famous label on the outside.
Consumers still express more interest in satellite radio (which is set to debut in Canada this fall) than HD radio prior to the introduction of price, says Wu, 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.
"Even though satellite radio is at an advantage over HD radio by offering commercial-free content and coast-to-coast coverage," notes Wu, "interest in HD radio is higher than satellite radio after the introduction of price."
On top of that, says Wu, consumers in general would rather pay once for a feature, and have been reluctant to embrace subscription fees. "This is evident in the trade-off exercise in this year's study, in which almost twice as many consumers chose lifetime (life of vehicle) satellite radio with a one-time $499 subscription fee compared to a one-year option."