Offshoring will pose a threat to manufacturers, though demand from key markets is on the rise
Los Angeles, CA (PRWEB) March 30, 2012
A steep decline in consumer and business spending, paired with fast-paced offshoring, caused drastic revenue drops for the Audio and Video Equipment Manufacturing industry from 2007 to 2009. Furthermore, consumers substituted some of the industry's products with built-in alternatives in mobile phones and computers. Nonetheless, revenue is expected to grow in 2012 as downstream demand from the Movie Theaters (IBISWorld industry report 51213) and Car and Automobile Manufacturing (IBISWorld report 33611a) industries increases. While revenue is anticipated to decline at an average annual rate of 18.3% over the five years to 2012, it is expected to increase 1.3% in 2012 to total $2.9 billion.
While consumer demand for new products continues to grow, offshoring to countries with cheaper labor is a dominant trend, says IBISWorld industry analyst Agata Kaczanowska. Offshoring is especially true of former major players in the Audio and Video Equipment Manufacturing industry; multinational corporations, such as Samsung, LG and Hitachi, have moved operations overseas to low wage-cost countries. Over the five years to 2012, import revenue is expected to experience especially significant growth when compared to steep industry revenue declines. The industry remaining in the United States mainly consists of high-quality sound-system producers, such as Bose.
Industry consolidation has occurred as a result of constricted demand and offshoring, continues Kaczanowska. For example, Audiovox purchased Klipsch in 2011, significantly increasing its market share. The industry’s major players include Bose Corporation, Harman International Industries Inc. and Audiovox Corporation. Due to consolidation and offshoring, the number of industry enterprises is expected to decline to total 228 in 2012. Concurrently, employment is anticipated to fall to total 5,608 people. Large firms have moved a significant amount of production abroad over the past five years, significantly reducing the revenue garnered by the industry. Manufacturers located in Japan, South Korea and China are the major sources of audio and video products supplied in the United States. Continued offshoring over the next five years will offset growing demand from consumers and downstream industries, including growth in demand from movie theaters and car manufacturers. Nonetheless, demand for advanced research facilities that produce new products and product installation services will increase, driving revenue up. Industry revenue is projected to continue to decrease gradually over the five years to 2017. For more information, visit IBISWorld’s Audio and Video Equipment Manufacturing report in the US industry page.
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IBISWorld industry Report Key Topics
This industry includes firms primarily engaged in manufacturing electronic audio and video equipment for home entertainment systems, vehicles and public areas.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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