Automakers Reluctant to Use HD Radio

HD Radio has so far been unsuccessful with its plight for providing car manufacturers communication devices. It did not win over automaker clients. And the reason? It’s much too costly.

Among those who considered hooking up with the HD Radio are Hyundai, BMW and Jaguar. GM and Chrysler bigwigs claimed that they were not rushing to commit to the devices which would cost the struggling Big Three U.S. automakers as much as an estimated $600 million annually to install. It’s pretty sturdy price that some automakers aren’t willing to compromise. The radios are approximated to reap in $150 million to $200 million annually to each of the three automakers.

That said, HD affirms to distribute better sound quality than conventional analog radio and facilitates stations to transmit multiple channels. More than a tenth of the estimated 12,000-plus U.S. radio stations have upgraded to the technology which comprises of many in the country’s top 100 markets.

"I don't think there are too many American carmakers jumping on this. It's a fairly expensive proposition to put that technology in a vehicle and there's no certainty around the revenues associated with it," said Rick Lee, executive director of competing satellite radio services for GM unit OnStar.

Whatever the case, HD Radio should come up a strategic technique to cave in more clients especially major automakers that seem hesitant in wedding their vehicles’ car parts’ with HD products and doodads.