Is weak dollar fueling high-end audio export boom?
America still builds world-class high-end audio products and, with the dollar at new lows, export sales are on the rise.
Back in the day, we built great cars and the best TVs. And our advanced engineering was the envy of the world.
That was a long time ago. Today "world-class" design and manufacturing is mostly sent off-shore to Europe and Asia. American companies market and distribute products made somewhere else. According to American Economic Alert, the U.S. has imported $250 billion worth of goods and services more than we exported so far this year.
High-end audio is one area where made in America products are still truly world class. While the major brands like Audio Research, Ayre, Cardas, Conrad-Johnson, McIntosh, Thiel, and Wilson Audio are only known here by audiophiles, these brands are major players in the global audiophile market. And with the U.S. dollar at record lows, exports sales are healthier than ever.
Audio Research reports strong sales surges in Italy, France, and the U.K. Russia has just recently become a major market for Audio Research's vacuum tube electronics. The company is still selling mostly two channel audio components; home theater products aren't a big part of their growth over the last few years. In the U.S., you can buy an Audio Research VSi 55 tube integrated amplifier for $3,495.
Thiel Audio, based in Lexington, Ky., is enjoying robust sales. "Our export business doubled in 2007, and is now about 40% of our gross revenues. The biggest increase has come from Europe. Fortunately for us, our domestic business is up, too, though not as much as foreign sales," said Kathy Gornik, Thiel's president . I reviewed Thiel's least-expensive speaker, the SCS4 in the May issue of Home Theater magazine.
Cardas Audio, maker of high-end speaker and interconnect cables, has also noted that Russia is coming on strong. George Cardas, the company's CEO, said, "I have always found (that) overseas sales surge with a drop in the dollar. Distributors hold orders until the right moment and even increase orders if the drop is substantial." Interesting.
Steve Silberman of Ayre Acoustics, based in Boulder, Colo., chimed in too. "Export has been off the charts this year, mainly in Asia, though Europe has been growing steadily too," he said. "What's been the real surprise is that the U.S. saw growth in the first quarter on par with export growth." Ayre electronics have been part of my reference system for years.
Wilson Audio, the, is also doing well: "Our sales are up in all international markets. This is especially true of Europe, where we have benefited most from the weak dollar. Of course, it is a complex issue with several factors, only one of which is the weak dollar. For example, the Hong Kong dollar is tied to the U.S. dollar, and so in that market we don't directly benefit from the weak dollar. We are doing extremely well in Asia for an entirely different set of reasons, unrelated to the dollar."
Of course, all of these American made-products are far more expensive in other countries than they are here.