Tuesday, May 09, 2006

Korean automakers to Make Satellite Radio Standard by '09

May 9, 2006

Korean automakers to make satellite radio standard by '09
(Auto Week)


Kia and Hyundai are making satellite radio standard equipment, and rivals may be forced to dance to the Koreans' tune. Last month Kia Motors America Inc. announced it would install Sirius Satellite Radio Inc. equipment in all vehicles starting in the 2009 model year. The announcement follows one by corporate cousin Hyundai Motor America Inc., which said last year it would begin phasing in equipment from Sirius' rival, XM Satellite Radio Holdings Inc., on all vehicles.

The Koreans are the only carmakers so far to announce that they will make satellite radio standard, according to the satellite companies. Other carmakers offer it only as an option.

"You've got the bottom end of the market saying here's where we're going," said Stuart Kagel, analyst for Janco Partners in Denver. "The high end is heading in that direction. It's a function of where the middle shakes out.

"The Kia move puts pressure on companies in the middle to make the equipment standard, including General Motors and Ford Motor Co., Kagel said. "The notion that this becomes a standard product in automobiles and gets put in 16 to 18 million cars a year could cause people to revise upward their subscriber expectations," said Kagel.

Kagel predicts 59 percent of all new vehicles sold in the United States will come standard with satellite equipment by 2010. Other analysts have similar predictions. Such a trend would mean satellite radio could go the way of the FM radio, which was once an option that became standard. But there is a big difference: AM and FM radio were free, and XM and Sirius each charge $12.95 a month. Other carmakers such as Nissan have said they plan to install satellite radio in a high percentage of models."If Nissan does it, then Honda and Toyota are going to do it," Kagel said. "If Honda, Toyota and Nissan do it, you can bet Ford, GM and Chrysler are going to.

link to full story HERE via Autoweek

5/09/2006 07:11:00 AM

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