Car stereo is on the nose with the humble iPod cannibalising sales. Among those set to be hurt are Kenwood, Alpine Electronics and Pioneer Electronics. Instead drivers are investing in a new generation of navigation systems that are not made by the traditional car sound manufacturers.
Recent reports reveal that iPod users are turning to attach devices that plug into FM tuners or directly into a new generation of OEM car stereo systems which cater for the plugging in of an MP3 player or iPod player or iPhone. 
The Consumer Electronics Association who organise the CES Expo claim that global spending on aftermarket car stereo systems is expected to slip 28% from 2006. This includes everything from CD changers and speakers to satellite radio.
"We need to make car audio cool again," said Pioneer Electronics Vice President Larry Rougas at a recent industry summit called to address the sales slump.
US Today claims that a generation ago, most young drivers wouldn't consider their rides officially "pimped" until they invested in a blasting, soul-stirring stereo system. Makers such as Pioneer, Kenwood and Alpine were household names.
It was "a golden time to be in this business," says Bill Matthies of research firm Coyote Insight.
Today, one in three motorists can't name a single car stereo maker, the firm found. Its survey of 552 drivers found that about half feel their car's factory-installed stereo is good enough. And about half don't plan to buy any aftermarket electronics in the next two years, according to Coyote Insight.
Apple's iPod and the desire for music portability trump sound quality for many in the industry's traditional 16- to 24-year-old target market. Many tap their digital player into the car system via lower-quality FM modulators that are cheaper than the hard-wired connections of the aftermarket stereos that the industry promotes.
"The customer has changed," CEA spokeswoman Jennifer Bemisderfer says.
To the lure them back, the industry is moving to:
•Broaden product lines. Car stereo makers and retailers are selling a wider variety of vehicle electronics, from navigation devices to backseat video. "Take your life with you" when you get behind the wheel, says Mike Kahn, marketing director for Sony's mobile electronics.
Aftermarket portable navigation sales alone grew 136% from January to May this year vs. the same period last year, researcher NPD reports.
Despite falling sales, industry executives predict a rebound. "The industry can and will work together to solve this problem," says Stephen Witt, vice president of Alpine Electronics.