By: Gino Lattarulo
Volkswagen is now offering a three month full satellite radio package in every certified pre-owned vehicle. The main reason I love this move is because car manufacturers usually follow each other. When one comes up with a marketing scheme the others will follow in an effort to stay competitive.
Right now the certified used car landscape is the place to be. Sales of these types of vehicles have increased almost 50% in the last 8 years; mainly because genuine factory certified cars carry a bumper to bumper / power train warranty that usually extends to 100k miles.
With this news from VW it will not be long before the other major manufacturers like GM, Toyota (TM), Ford (F) etc. follow suit. By creating an already active subscription in used cars, it will significantly increase subscriber numbers by retaining the percentage of people continuing with the subscription; similar to the retention percentage in the new car market. The current estimate of factory certified pre-owned vehicles is approximately 1.6 million per year.
This is a solid step for Sirius to move beyond the shackles of the new car environment and turn on those inactive radios. What would also be a good idea is for Sirius to roll out a campaign and give current used car owners with inactive satellite radios the same three month trial. In 2008, approximately 30% of new cars came with satellite radios. In 2009 that figure has jumped to 50%. It won’t be long before these cars become part of the used car market and give Sirius the opportunity to recycle the radio subscriptions to another owner. Go Green indeed.
It is very encouraging to see that Sirius is taking measures to step beyond the “same old same old” and look for creative avenues to increase customer retention and revenue. Alright, maybe this used car idea isn’t exactly a major epiphany. It’s more like a “duh huh” why didn’t they do this sooner? But hey no one can say an effort is not being made. In the pipe dream hopes of avoiding a reverse stock split, I truly hope that Sirius continues to boost their exposure as much as they can. Hey, it’s my delusion, don’t step on it.
Disclosure : Long SIRI
Editors Note:
Sirius XM currently has certified preowned programs in place with Honda, GM, Acura, Volvo, BMW, Porche and Ford (Regional)
Sirius needs it to take it one step further and offer to all used car dealerships and used car departments a voucher system that the staff can give to buyers of pre-owned vehicles with satrad in them. This would drive subs on non-certified cars which is an even bigger market. Take it from a car guy.
@Paul what a great idea! You should suggest that to them.
Gino, I did what you said. See below.
Dear Paul:
We value our shareholder comments. Your preowned vehicle marketing feedback has been shared with SIRIUS XM management.
If you have additional thoughts, please do not hesitate to write us again.
Thank you for your support!
Regards,
Shirley Huang
Associate Manager
SIRIUS XM Investor Relations
212-584-5242
________________________________
From: donotreply@broadcast.shareholder.com [mailto:donotreply@broadcast.shareholder.com]
Sent: Wed 6/24/2009 2:31 PM
To: Investor Relations
Subject: Pre-owned automotive market
The following comment was submitted via the Sirius XM Radio Inc. website by Paul Gourley [pgourley@comcast.net].
I have been in the pre-owned industry for over 20 years. I have been a Sirius investor for 5 or 6 years. The certified pre-owned market is good, but there are many pre-owned cars sold that are not certified. You could provide a voucher system with a 3 month trial. Pre-owned departments and dealers could give these to customers purchasing units that have satrad. You could spiff these dealers when the customer commits to a sub. The selling dealer could have a code that is needed for activation. Cheapest subsidy that SiriusXM will pay. Let the people in the field do the leg work. Cheap marketing and no hardware cost.
________________________________
Sirius XM Radio Inc.
1221 Avenue of the Americas
New York, NY 10020
Shareholder.com does not review, approve, filter or alter the contents of comments submitted by our clients’ customers. Shareholder.com does not warrant or otherwise assume legal responsibility for the comments received by it on behalf of its clients. We advise our clients to assess whether such review, approval, filtering or alteration is advisable and, if so, to perform such actions at their own discretion.
Shareholder.com 12 Clock Tower Place, Maynard, MA 01754 | 800/990-6397