Sirius XM Radio Inc (NASDAQ:SIRI) has revealed plans to push their services further — into the used car and smartphone markets. Analysts at Bank of America Merrill Lynch said last month that the best is yet to come with the satellite radio company, and Sirius XM CFO David Frear certainly delivered this week at the Piper Jaffray Technology, Media and Telecommunications Conference.
One of the things Frear discussed was the satellite radio company’s push into the used car industry. He called phase one of the company’s growth as selling the devices in consumer electronics stores and phase two as pushing into the new car industry. Now he says phase three is bringing Sirius XM Radio Inc (NASDAQ:SIRI) into the used car market.
Frear pointed out that they have taken the company from zero to 50 million cars in just a decade of offering factory-installed radios. He said they plan to take that number up to 150 million vehicles in the next 10 years.
According to Frear, the used car market is an important untapped resource for Sirius XM Radio Inc (NASDAQ:SIRI). He said about 70 percent of the cars sold in the U.S. annually are previously owned, so they’re working in a couple of different ways to get into that part of the market. He said they’ve got deals with automakers for their certified pre-owned vehicles, although that accounts for just about 5 percent of previously owned cars in a year.
He also said they have a deal with an ADP subsidiary involving data exchange so that they can track their sales more closely. They’re giving free 90-day trials to customers of Digital Motor Works to try out the service, and from there, they are able to market directly to buyers of previously owned vehicles.
In addition to previously owned vehicles, Sirius XM Radio Inc (NASDAQ:SIRI) is looking to the smartphone industry for additional opportunities. Frear said by putting an app on smartphones, it builds customer loyalty and provide opportunities for even more consumers to use their services. He called the company’s smartphone apps an “extension of engagement for people who have decided they want us in the car.”