Despite falling U.S. auto sales, XM Satellite Radio delivered the highest number of vehicle based subscriptions in satellite radio history, said CEO Nate Davis during yesterday's earnings call.

"Even with the relative softness in the US auto-market, XM delivered the largest number of OEM growth additions in the history of satellite radio," Davis said.

XM had over 800,000 gross OEM additions and roughly a million factory installed XM radios manufactured and delivered to dealers in the quarter, Davis told investors. "That is a 48% year-over-year quarterly increase."

XM ended the quarter 355,000 net subscriber additions from the OEM channel, while Sirius brought in over 321,000 net subscribers from the automotive channel.

Still, XM had a net loss of 51,000 subscribers from the Retail channel, while Sirius squeaked out just over an additional 2,500 subscribers from Retail

Davis explained that while the company had successfully increased direct retail sales to their website and call centers, those increases did not offset "the continuing decline in overall retail sales through the big box retailers."

"However, offsetting this retail weakness... is a continued acceleration of our OEM growth," said the CEO. "XM 2008 installations could well exceed 4 million units close to the long range estimate we provided a number of year's ago."

[Transcript via SeekingAlpha]

Microsoft Corp. and Hyundai-Kia Automotive Group have partnered together to build a music and information system to rival Ford Motor Co.'s SYNC system. The system is set to debut in cars sold in North America in 2010.

Hyundai is the first major Asian automaker to commit to using the Microsoft Auto platform with the goal of bringing these systems worldwide.

The infotainment systems will be a voice-controlled interface linking mobile devices to car stereo systems, with the ability for new functionality through software updates via the USB port - much like Ford SYNC. Later versions are expected to include multimedia and navigation-related features, said Microsoft/Hyundai.

Hyundai-Kia will first introduce vehicles in North America in 2010 and expand to the Asian and European regions shortly afterwards.

As I predicted, this is only the beginning. The product deal marks a win for Microsoft and you can bet that we will see more of these partnerships with other automakers in the future. Microsoft Auto systems - which are essentially mini-PCs - are currently available in Fiat in Europe and South America, and in Ford in North America.

With automakers like BMW and Chrysler working to bring Internet access to vehicles, the market for car-based information and data systems is expected grow rapidly in coming years, and Microsoft plans to be part of this movement.

U.S. auto sales fell sharply in April, leading some automakers to suggest that industry-wide annual sales could fall to the lowest levels in more than a decade and a half.

General Motors posted an incredible 23 percent decline in sales, led by a 32 percent decline in truck sales. Sales for Ford Motor Co dropped 19 percent, which included an 18 percent decline in truck sales.

Toyota Motor Corp saw sales fall nearly 5 percent on sharp drops in SUVs and pickup trucks. Nissan reported a 1.6 percent overall decrease in April U.S. auto sales. Honda and Chrysler are expected to post sales data later today.

GM and Ford said preliminary data suggested industry-wide sales had fallen below 15 million units on an annualized basis, which would mark the weakest result in more than a decade and a half, according to Reuters.

Rising gasoline prices weighed hardest on sales of large SUVs and trucks, creating a market shift toward cars - a trend that tends to favor Japanese car makers.
 

"Smaller vehicles are going over big," said Toyota U.S. sales chief Jim Lentz. "With oil prices at record levels, compact cars and hybrids continue to lead the way."

The trend towards smaller vehicles could impact the conversion rate for satellite radio, though it remains unclear if this is truly the case.

"The more SUVs you have, the more high-end cars you have, the higher the conversion rate," said XM Satellite Radio CEO Nate Davis to analysts in late February. "The lower, the low-end cars, the less [the conversion rate] is."

[Reuters]

General Motors said yesterday that the US market slowdown had led to a sales decline that has given Toyota an early lead for this year's global auto sales.

For the first-quarter, Toyota capitalized on growth in China and Europe as GM saw its North American sales drag down gains in other markets. Toyota said sales grew 2.7 percent, selling 2.41 million vehicles for the period, compared with GM's 2.25 million, a decline of less than 1 percent. As a result, GM is about 160,000 vehicles behind its Japanese rival.

On Wednesday, GM became the latest automaker to predict that the industry was entering its worst months of the year. GM said that the second quarter, which typically has strong auto sales, could end up being the slowest period of the year.

Ford officials echoed the sentiment this month, stating that they believed Spring would be the slowest season for automakers in 2008.

Chrysler too said it was not counting on a significant improvement in the market this year.

"The big caveat is gas prices," said Michael C. DiGiovanni, GM's chief sales analyst. "This is clearly a head wind we didn't anticipate would be to this level."

The average price of regular gas has reached a record high of $3.533 a gallon, according to the AAA motor club. And that doesn't bode well for the belt-tightening consumer, who will continue to be less likely to purchase a new vehicle, and as a result become a satellite radio subscriber.

[New York Times, AP]
Pictured: The 2009 Cadiallac Escalade Hybrid, © General Motors.

Toyota has gone and partnered with iBiquity, to offer HD Radio in its Scion vehicles.

Details are pretty scant at this time, all we know is that HD Radio will be offered in "select audio systems" in the "near future." Which means that it's not standard equipment and it won't be available in every system across Scion's three model lines.

Here's the standard corporate blah-blah from Toyota (iBiquity's isn't even worth quoting):

"Since Scion customers are in tune with audio technology, it makes sense that we enhance our already outstanding audio offerings for them," said Jason Adang, Accessory Audio and Electronics Planning Manager, Toyota Motor Sales, U.S.A., Inc. "Digital HD Radio technology is ideal for our youthful, tech-savvy customers who will enjoy the wide range of content available on HD Radio channels."

He's right, Scion users are indeed in tune with audio technology, they're also notoriously young. Which isn't an insignificant development, as terrestrial radio is trying desperately to re-engage that youth audience.

The real question is whether this opens the door for HD Radio inclusion in more Toyota vehicles.

Sirius and XM introduced their real-time traffic services in 2004, but even though they were fairly early to the game, they're definitely not the only ones focusing on the space.

Last week a group of broadcast corporations - comprised of Cox Radio, Entercom, Bonneville, Emmis, Beasley, Greater Media, Radio One, and NPR - formed a joint venture called the Broadcaster Traffic Consortium. The goal? To help monetize the HD Radio spectrum (which is in dire need of monetization). And they're working with NAVTEQ to make it happen.

Meanwhile, back at the ranch, Microsoft Research laboratories spent the last five years developing a complex software model to avoid traffic jams, called Clearflow.

Clearflow will be freely available as part of Live Maps, with support for 72 cities. It doesn't just reroute you around traffic jams, because in some cases rerouting off the highway can send you into even more congested areas. Instead, Clearflow will figure out whether its worthwhile to stick it out on the freeway, rather than taking a detour.

Of course Clearflow was created to help Live.com compete with Google, but how long before Microsoft applies the Clearflow technology to MSN Direct?

MSN Direct has snuggled up with Garmin over the years, and the folks at Redmond have even partnered with Clear Channel to deliver MSN Direct HD over - you guessed it - the HD Radio spectrum (note that Clear Channel isn't part of the consortium).

And then there's the ICO mim service - which yesterday enjoyed a successful launch of their ICO G1 satellite - that will be going online in the near future with a trial service. Their setup will be similar to Sirius and XM, using a hybrid satellite and terrestrial network (as opposed to HD Radio's pure terrestrial setup). ICO is still in its infancy when compared to these other technologies, but shouldn't be discounted either.

The bottom line is that the current solution for avoiding traffic congestion (i.e., listening to your local radio station) is a subpar one to say the least. By the time an accident is mentioned on the radio, it's usually too late. And the daily commuter will be more than happy to plunk down a few bucks a month when they're stuck in a mile-long jam.

Don't get me wrong, Sirius/XM were pretty darn smart in seeing this need and getting a shoe-in with automakers nearly 4 years ago. But this is still extremely new technology as far as the consumer goes. And as a need arises, there will be plenty of companies willing to profit from fulfilling it.

XM will be sponsoring the RS*R Scion tC in Formula Drift events this year.

Scion's drift car is based on its most popular model: the tC sports coupe. But this isn't any regular ol' tC kids. This Scion was converted from front-wheel drive to a rear-wheel drive to make it a true drifting contender. Exhaust and suspension manufacturer RS*R used its performance shop to transform the tC's stock transverse engine to a longitudinal setup, driving power directly to the rear wheels.

"This sponsorship of the RS*R Scion tC in Formula Drift events is an extension of our support in the racing community and our relationship with Scion," said Joe Verbrugge, senior VP of XM's automotive partnerships and international operations. "XM loves racing, and we're thrilled to join Scion's involvement in this cutting-edge motorsport."  

The RS*R Scion tC, which is also sponsored by Toyo Tires, Rogue Status, BASF, Sparco, Enkei, AEM, Proceed and Meguiar's, will make its first appearance at Formula Drift's Round 1, Streets of Long Beach in California this Friday, April 12th.

XM displays will be at each event alongside the Scion/Toyo Pit area, featuring prize giveaways and live XM listening stations.

Photos available after the jump...

XM NavTraffic is continuing to grow in vehicle penetration. Today at the 2008 Dallas Auto Show, General Motors revealed that it is adding the satellite-driven data service to many of its vehicles.

GM will add XM NavTraffic across its lineup to provide real-time traffic data to 22 navigation-equipped vehicles in the 2009 model year.

Among the vehicles to offer XM NavTraffic will be some of GM's most popular models, including the Chevrolet Tahoe, GMC Sierra, Buick Enclave, Saturn Vue and Hummer H2.

All GM models equipped with XM Radio and XM NavTraffic come standard with a 3-month free trial subscription. Click the jump to see close-up photos of the interface...

March auto sales fell 12 percent from a year earlier on an unadjusted basis, thanks to declining consumer confidence, higher fuel prices and recession concerns.

GM reported a 13 percent sales decline for the month, Chrysler dropped 13.2 percent, and Ford saw a 7.6 percent decline. Toyota, the #2 automaker in U.S. sales, said sales fell 3.4 percent.

"We're not immune to economic cycles," said Toyota division sales chief Bob Carter.

Toyota, which cut U.S. truck production in March, said it would be forced to lower its forecast for U.S. industry sales of 16 million vehicles in 2008.

"I think the main weakness is consumer confidence," said GM sales chief Mark LaNeve. "It's (mortgages) resetting. It's worry about the news. It's presidential candidates telling you how bad it is. It's Bear Stearns."

Conversely, Honda and Nissan outperformed the weak industry and increased their market share. Sales at Honda rose 4.2 percent while Nissan posted a 3.6 percent gain.

"The compact cars and the new crossovers are really what is carrying most manufacturers," said Jesse Toprak, executive director of industry analysis for Edmunds.com, highlighted by the fact that sales of pickup trucks and SUVs fell 18 percent in March.

"Consumers want to buy cheaper, more gas efficient vehicles," Toprak said.

[Reuters]

UPDATE: I just want to point out that the AP story has been updated to be somewhat less misleading. Previously it read "More Choice in Satellite Radio Years Off" but now the article, written by Christopher S. Rugaber, reads: "'A La Carte' Satellite Radio a Year Away."

Also, there's a bit of confusion surrounding the timing. Understand that the "3 years" cited here is based off of Barrington Research's estimates for OEM radios (due to the lag time that automakers tend to require) that does not mean Retail radios will suffer the same slowness in getting to market. Sirius and XM have said, from the beginning, that the A La Carte receivers will be available to customers within one-year after the merger is complete. I just wanted to make sure this was clear.

Following the merger of Sirius Satellite Radio Inc. and XM Satellite Radio Holdings Inc., it could take up to three years before new cars would feature both services in "a la carte" packages.

That's the prediction of media analyst Jim Goss at Barrington Research, who told the Associated Press that automakers require lead times of several years to update dashboards with new products. As a result, cars with interoperable radios likely wouldn't be on dealer lots for up to three years.

That's not to say that both Sirius and XM won't be providing "best of" programming (see: will my radio still work?), which essentially is simulcasting of certain content from one service to another. We don't know exactly what big-name programming will be available yet - those content agreements all need to be worked out once the deal is finalized.

Still, analysts seem to think that few current subscribers will pony up for the new receivers.

Perhaps 5% to 10% of current subscribers "might go through the trouble" of buying new radios for the "a la carte" option, Stifel Nicolaus analyst Kit Spring wrote in a recent note to clients.

So here's a question:
Since most of you are current Sirius or XM subscribers - would you buy a new receiver when the "a la carte" enable radios come out?