“The Complete Piano Buyer's Consumer Information Guide to Quality Pianos”
A C O N S U M E R G U I D E T O U S E D P I A N O S
1 9 8 0 TO 2 0 1 0Piano industry estimates in 2009 are that more than one million plus pianos being sold each year, only 60,000 or so new. The rest are being sold by private parties, and the resurgence of the American piano builders, the piano industry no one seems to know about. The return of the true craftsman in the form of the new piano re-builders, who make a piano better than new for a modest investment, here's the answer to the perplexing question, of how to buy a really good quality piano for a reasonable cost. A new grand piano of decent quality will run around $25,000, or you can buy a great used grand have it rebuilt and refinished, and the truth is you'll wind up with a far superior instrument for about half the cost. A quality grand piano completely rebuilt and refinished by experts who do their work just a little bit better than perfect IS better than new. It's almost as though your instrument becomes a hand crafted, true one-of-a-kind, collectors dream. In this case the old instrument is not only less money but better in many respects. Better materials, better workmanship, because now you have a master craftsman rebuilding this piano the way pianos were supposed to be built one-at-a-time.
Several factors contribute to the used piano market. One is the high price of new pianos, whose manufacture is questionable compared to the lower and lower prices of electronic entertainment devices televisions, VCRs, and electronic keyboards. Another is the growing pool of skilled piano technicians who are rebuilding and reconditioning pianos, and efforts fueled by the bad reputation earned by the junk import piano makers of the last two decades. A hundred years ago there were literally hundreds of piano makers in the United States, and even twenty five years ago there were at least a dozen major firms, now only a few remain, five having ceased production in the first half of the 1980s alone. Some of the ones that remain are able to hold on only because they have diversified to other products that subsidize their meager piano sales. Consumer interest in the piano seems to remain vibrant. If only the industry could create an instrument that would render past models obsolete in the minds of the buying public.
If a piano brand is not currently being manufactured, it is usually not being promoted to the public through advertising, media and other efforts that increase it's reputation and recognition. The amount of advertising dollars spent on promoting a piano to the public by both the manufacturer and the dealer has an impact on the used values of pianos of the same brand name. If the piano manufacturer does not spend a lot of money promoting the brand recognition, then usually this will decrease the value of the piano. These prices are based upon the U.S. Market and U.S. dollars. It is common to find that many European made pianos, that are very well promoted and recognized in Europe, have significantly lower resale values in the U.S. because the brands are not promoted or well represented by dealers in the U.S. Market. Also, there are recently established manufactures in places like China, Belarus, Indonesia, that have simply not been around long enough to have a solid market recognition in the U.S. Market.
Part of the value of a used piano is based by the opinion of the technicians who servicing them. If a piano hasn't had at least 25 years of service history with technician's in the U.S., it is basically considered a newcomer. It takes about 25 years of service history to begin to predict issues like durability. If a piano lacks that service history, then when it is time to resell it, the seller may find that technicians discourage potential buyers from buying it either because of a poor service history or a lack of service history. This makes it necessary for the seller to lower the price in order compensate for the perceived risk the buyer is taking in buying the piano when it may have inside problems.
A piano is a precision engineered musical instrument but it is also a piece of furniture. There are furniture styles that affect the popularity of a piano. If a particular style is not considered desirable by most buyers, it may be difficult to sell without refinishing or modifying the cabinet style. Usually traditional finishes such as ebony, walnut, mahogany have always been in fashion throughout the ages, despite furniture trends. And specialty cabin. It is the colors like white or ivory that seem to go in and out of fashion the most. There was also an era when pianos were painted (not usually by the manufacturer but by the owner) and these pianos are way out of fashion today.
Over the past 50 years some nine million new pianos have been sold in the United States. Given the longevity of most pianos, it is reasonable to assume that a large percentage of those nine million instruments are still in service out there somewhere. From a high in 1979 of 275,600 units, piano sales slid to 98,778 units in 1994. This precipitous decline has prompted serious soul-searching at all levels of the piano industry. The truth is many of these used pianos have not been used in many years and in some cases are "like new" with some TLC will out perform most imports.
Piano Sales from 1987 to 1991
1987 1988 1989 1990 1991 Total Market 216,193 209,361 181,845 179,635 168,260 Verticals 141,293 128,761 94,871 95,635 81,204 Digitals 41,200 46,500 53,100 54,900 57,500 Grand Pianos 33,700 34,100 33,874 29,100 29,556 Piano Sales from 1997 to 2006
CLICK ON IMAGE TO VIEW CHART
Historically:
Given the fact that pianos don't wear out, used pianos have been a factor in the market for over a century; however, in the past decade the influence of used pianos has steadily grown. The chart below illustrates that between 1950 and 1979 new piano sales closely tracked household formation. Declines posted in 1970 and 1975 reflected recessionary problems, and the surge in 1965 was the result of the baby boom generation approaching lesson-taking age. How then to explain the halving of household penetration between 1979 and 1985? A look at historical production levels offers some telling insights.
Acoustic Piano Sales: 1975-98 (units)
1975 . . . . . . . . . . . . . . . . . . . . 208,429 1987 . . . . . . . . . . . . . . . . . . . . 169,100 1976 . . . . . . . . . . . . . . . . . . . . 237,092 1988 . . . . . . . . . . . . . . . . . . . . 141,697 1977 . . . . . . . . . . . . . . . . . . . . 247,446 1989 . . . . . . . . . . . . . . . . . . . . 126,317 1978 . . . . . . . . . . . . . . . . . . . . 262,920 1990 . . . . . . . . . . . . . . . . . . . . 111,928 1979 . . . . . . . . . . . . . . . . . . . . 255,039 1991 . . . . . . . . . . . . . . . . . . . . 106,941 1980 . . . . . . . . . . . . . . . . . . . . 212,849 1992 . . . . . . . . . . . . . . . . . . . . 102,882 1981 . . . . . . . . . . . . . . . . . . . . 209,876 1993 . . . . . . . . . . . . . . . . . . . . 99,721 1982 . . . . . . . . . . . . . . . . . . . . 191,319 1994 . . . . . . . . . . . . . . . . . . . . 98,778 1983 . . . . . . . . . . . . . . . . . . . . 187,965 1995 . . . . . . . . . . . . . . . . . . . . 98,229 1984 . . . . . . . . . . . . . . . . . . . . 174,341 1996 . . . . . . . . . . . . . . . . . . . . 84,356 1985 . . . . . . . . . . . . . . . . . . . . 147,487 1997 . . . . . . . . . . . . . . . . . . . . 94,709 1986 . . . . . . . . . . . . . . . . . . . . 163,100 1998 . . . . . . . . . . . . . . . . . . . . 106,759 Note.–Includes sales of domestically produced and imported pianos. Source: For 1975-87, National Piano Manufacturers Association and industry estimates; for 1988-98, The Music Trades, April 1994 and April 1999 issues. Link to the> "1990 Consumer Information Guide"The number of new pianos sold in the United States (including imports) peaked in 1978 at over 282 thousand, by 1985 only a little more than 150 thousand were sold. A survey sponsored by the American Music Conference and carried out by the Gallup Poll Organization reports that amateur piano playing is as widespread as it has ever been, and extrapolations from the survey suggest that nearly two million U.S. households bought a piano in 1984.
The first thing a buyer usually discovers when looking for a piano, is that the prices are usually not fixed, they are negotiable. The piano "sale" is still an event used to motivate purchases on the spot, but most buyers take more time to make their decision. And that time taken will show them that prices are not what they at first seem. Something usually tips the buyer off to this fact. Buyers may call a store and ask for prices over the phone, only to be told that prices are only given to buyers in person. Or they may receive one price over the phone and another when they walk in the door. A buyer may find that none of the pianos are marked by price. A salesperson may drop the price on a piano to motivate the buyer to close the sale today.
Pianos hold their value well, in fact well enough that many piano dealers I know have for many years, guaranteed to buy a piano back, or take it on trade at 70% of its original purchase price for 3 years after purchase. Long-term dependable pianos may cost a little more, but your money is safer, and the musicians in your home will be more inspired.
Most people pay too much for old pianos; the as-is value of old pianos is actually quite low. Unfortunately however, a naive buyer may see new pianos for $4,000 and think an old piano they see privately for $800, is a bargain. In reality they will probably pay $600 too much, particularly if it requires thousands of dollars worth of work. There is no reason why a piano buyer or shopper should pay to have a piano technician inspect a new or used piano. No matter how many books that are written piano technicians for piano technicians or would be piano salespeople. The very simple rule to follow is:
Before buying any piano NEW OR USED is to see it and play it and:
IT MUST BE IN TUNE - IT IS THE SELLERS RESPONSIBILITY TO HAVE THE PIANO IN TUNE - IF IT IS NOT IN TUNE PASS ON IT - IT SHOULD HAVE BEEN TUNED RECENTLY BY A PIANO TUNER AND THE SELLER MUST PRESENT A TUNING CERTIFICATE WITH NOTATIONS OF ANY REPAIRS NEEDED. YOU DO NOT HAVE TO PAY A TUNER TO FIND OUT IF IT IS IN GOOD CONDITION.
THE RECEIPT IS A FORM OF A WARRANTY AND IS ACCEPTED IN ANY COURT AS THE REPRESENTATION OF THAT MUSICAL INSTRUMENT AND DOUBLY SO IF YOU ARE BUYING A NEW PIANO - AVOID ANY PIANO THAT YOU CANNOT SEE AND HEAR. THE SELLER SHOULD AND MUST HAVE THE PIANO TUNED BEFORE THE SALE. APPLY THIS RULE TO ANY PIANO YOU WANT TO BUY. AND IF YOU ARE SELLING, A TUNED PIANO WILL SELL FASTER AND FOR MORE THAN ANY PIANO NOT IN TUNE.
Do not think that pianos age like violins and guitars. Unlike violins and guitars, the strings in a piano create literally tons of stress which takes its toll on soundboards, bridges, and pin-blocks, aging a piano far more quickly than other strung instruments. Moreover, there is nothing between your fingers and the strings of a violin or guitar, but when you play a piano, you express yourself through a very complicated machine which like any machine wears out as it is used.
Many parents think any old piano will do for their children starting out. If these parents knew as much about pianos as they do bicycles they would realize that their children were about to go on a bike with flat tires, a bent frame, and twisted wheels.
If you find a younger piano, bear in mind that even if you have been very lucky and found an instrument in excellent condition, it would cost at least $400-$700 to put it in a similar condition to one you'll find at a reputable dealer showroom floor. Unfortunately most older pianos require far more expensive repair.
If a piano passes a common sense test i.e: the price is right and it does not seem to have been abused; and it is in tune - If you fall in love with the cabinet charm and craftsmanship of an older piano, then it is something like falling in love with a beautiful turn-of-the-century home.
The cost of restoration is certainly worthwhile, but it will make the home (piano) far more expensive then most new or newer homes (pianos). It is true that many old pianos were wonderfully made, and happily their technology has not evolved in a hundred years, so components are still readily available, and in the hands of a good re-builder an old piano can be made new again. Yes, they are better pianos than any of the current Japanese, Korean, Chinese or Indonesian new piano of today - and don't let anyone tell you different.
Many advertisements in the paper which appear to be private people selling pianos are really dealers, and they are usually selling dubious pianos with inadequate work performed. Remember they've already deceived you once with a misleading ad. When a buyer discovers that the prices are negotiable, this makes things more complicated for them. After all, what price should they really pay for the piano they want? How do they know what is fair? What is included in the price?
CONSUMER INFORMATION REPORT
(Retail Prices
and Quality from 1974)
You are shopping for and interested in buying a piano, and that you share some of the questions and problems similar to other piano buyers. Any advice we give you about buying a piano, is really based upon opinion and experience. This Guide was created as a tool to help you do things on your own. It does require more than just looking up a piano price in the guide and asking the dealer to give you a piano for the low price listed for that model. I recommend that you read everything on this page before using the guide. This will help you understand the context for the prices offered and give you suggestions as to how to use this information.
Today's piano market is flooded with dozens of brand names pianos coming from countries like the U.S., Austria, Germany, Czechoslovakia, Korea, Japan, Indonesia, China and Russia. With so many models and price points offering different features for different segments of the public, it is impossible to generalize the quality of one brand over another. Although it is important for you to be happy with a beautiful-looking instrument, don't let it be the deciding factor in purchasing a fine quality musical instrument. Let the quality of construction, the tone and the feel of the keyboard be the final judge. Plan to spend plenty of time browsing on several trips, and promise yourself you won't make a decision before you see as many pianos as possible. Visit as many reputable piano retailers as are available to you.
Play as many pianos as possible, from the best to the worst, just to get an idea of the differences in touch and tone. You can learn a lot about what you like by playing pianos that either you can't afford, or that are too poor in quality for you. After you have narrowed your choice down to about 2 or 3 pianos whose tone, touch and appearance appeal to you, negotiate a price with the salesperson. Every piano should come with a bench and at least one free tuning. You can usually knock 10 to 20 percent off the price tag if you are willing to walk away and think about it, or go to another dealer.
RETAIL PIANO PRICE GUIDE - CURRENT STREET PRICES OF NEW PIANOS
When shopping for a piano you'll find that dealers don't want to give you price information over the phone. They expect you to come into the store and hear a sales presentation before prices are given. If you know what pianos cost this can make it very difficult when you want to buy. Most buyers want a general idea of the marketplace before they go out shopping because it helps them to make the larger scale decisions like: "How much money do I want to spend?" and "What will I get for what I pay?". If you buy a tip sheet, a piano book will give you a good understanding of what is available for sale and how much it might cost on the high and low side. Based on someone else's opinion. But don't expect anyone to tell you the truth that doesn't have their hand out.
If you have already been out shopping, you may have found that each dealer has their own "List Price" for their pianos and there often is no consistent information available to you that will help you know what is a fair price for a particular piano. No two dealers are alike, and no two markets are alike. One dealer may mark their piano list price up considerably higher than another so that when they discount the price, it seems that you are getting a much better deal.
Competition at the Retail Level
Since most of the dealers in the United States offer a variety of models in both domestically produced and imported pianos, manufacturers often compete at the same dealership. The reduction in the number of retail outlets combined with a growing variety of pianos sold has increased competition at dealerships across the country. Many dealers sell both new and used pianos. An industry representative noted that prices advertised on used pianos often serve as a leader to entice customers into the store and provide the opportunity to sell them a new piano.
In the late 1980s, new methods of retailing, called “event sales” and “academic sales” were introduced. These methods were designed to remove excess inventories. The event sales take place at locations such as an armory, stadium parking lot, or hotel ballroom. The academic sales take place at a college or university that advertises the sale of its used pianos in the local newspaper. The prestige of the academic establishment’s music department is used to sell instruments that have been at the department for varying lengths of time. New pianos are also brought to colleges and universities for these sales. Piano companies were allowed to use the University’s letterhead on specific occasions and obtain alumni mailing lists. Alumni are often inclined to buy pianos on these occasions and are willing to pay relatively high prices because they believe that their purchases will benefit the institutions. Although this type of sale was originally designed to remove excess inventories, it has become a more regular method of marketing for certain U.S. producers and importers based on cooperation between the piano manufacturer or dealer and the academic institution.
"They are all fighting for a piece of the pie on the sales floor.” We currently live in an era of "warehouse" clubs and large chain discounters. This mentality is carrying over into the way people think about all consumer purchases, whether large or small, simple or complex.
Sam's Club is a membership-only warehouse club owned and operated by Wal-Mart
Stores, Inc.
The first Sam's Club opened in April 1983 in Midwest City, Oklahoma in the
United States.
Sam's Club is named after Sam Walton. A division of Wal-Mart announced that it
would stock a Kohler & Campbell grand piano in each of its 300 stores, a
number of keyboard retailers were justifiably concerned. It would appear that while the giant discounter can
move immense quantities of consumer goods but not Grand Pianos. "With only one
model, and a reasonable price, We think they actually might help business by
putting the idea of grand piano ownership into the minds of the millions of
consumers who receive the catalog and visit the store each day. It is certainly
presents the piano in a more positive light than a lot of the blow-out armory
sales and university promotions the industry has been running."
A Kohler &
Campbell grand piano graced the cover of its Christmas catalog, which is mailed
to 8 million, and a 1/2 page ad within the publication describes the instrument,
although the name is spelled incorrectly as Kohzer & Campbell.
Priced at $5,450, the 5'1" Kohler & Campbell Grand Piano at SAM'S Club
was
competitively priced, but certainly not at a level dramatically below many
specialized keyboard dealers.
The first thing a buyer usually discovers when looking for a piano, is that the prices are usually not fixed, they are negotiable. The piano "sale" is still an event used to motivate purchases on the spot, but most buyers take more time to make their decision. And that time taken will show them that prices are not what they at first seem. Something usually tips the buyer off to this fact. Buyers may call a store and ask for prices over the phone, only to be told that prices are only given to buyers in person. Or they may receive one price over the phone and another when they walk in the door. A buyer may find that none of the pianos are marked by price. A salesperson may drop the price on a piano to motivate the buyer to close the sale today.
This is what makes piano pricing in the US a complete jungle, i.e. the lack of control that manufacturers have on the pricing by the distributors and dealers in the US. Retail pricing is the responsibility of the dealer. No two dealers are alike, and no two markets are alike and many starting retail prices are set by individual dealers. Prices will vary from dealer to dealer with local economic conditions. Discounts of 20 to 25% are normal. One dealer may mark their piano list price up considerably higher than another so that when they discount the price, it seems that you are getting a much better deal.
If manufacturers were to make public "Manufacturer Maximum Selling Prices" - as is the case in Europe - there would be no way the dealer could first mark up these and thereafter apply a discount. The end user price would then vary somewhat from dealer to dealer but would be determined by what discount the difference between wholesale and that 'recommended max. selling price', and legal constrictions would be possible for any particular dealer.
None of our published price guides profess to provide anything more than a general reflection of marketplace conditions compiled just prior to publication. The more sources you consult, the more informed your buying or selling decisions will be. It's really as simple as that! Just keep in mind that these are only guides, and that there really is no substitute for experience. There is wisdom in a multitude of council.
Description of the Market - The Six Market Segments
According to piano manufacturers, there are essentially six types of customers in the U.S. market for pianos.
(1) One segment is made up of low or middle income consumers who are purchasing a piano as a piece of furniture to decorate the home. The piano will be played rarely, if ever. Their prime concern is price and styling. The piano must match the rest of the decor in the house. Purchases by these customers usually rely on the availability of retail credit. These customers usually choose spinets or consoles.
(2) Traditionally, parents of beginning piano students between the ages of 4 and 12 have been by far, the largest market for the industry. These purchasers seldom are aware of the features which determine quality. However, they have put a great deal of thought into the purchase. because the piano is usually going to become the most expensive piece of furniture in the house. The piano they finally choose will depend on various factors including access to credit, commitment to their child's music education, styling, and piano teacher's recommendations.
(3) The parents of serious students are far less numerous than those of beginners. These students know what quality features to look for in a piano. They probably want a grand, but family finances may dictate settling for a studio upright. Once again, this sale may hinge on the availability of retail credit. The furniture styling is less important than quality of sound for these consumers.
(4)Unmarried, young professionals and childless, two-income families are the fastest growing of the various market segments. Like the serious student, they usually choose a small grand or a studio upright depending upon available space. Access to credit is usually not a problem for these customers. They demand quality in both sound and styling.
(5)Institutions such as schools and churches are declining in importance and have all but disappeared as sales markets. In the past brand and model choices are usually based on school board specifications budgets, price, quality, recommendations by piano tuners, personal preferences of the incumbent music instructor or church pianist organist, and discounts etc. offered by local piano dealers. Today these instruments are offered free of charge in exchange for some commercial benefit to the dealer and factory, The selection in the past was usually a studio upright.
(6) Professional tastes vary with regard to tone and styling. Naturally, grand pianos are the first choice. The size and manufacturer selected can depend on the capital available to the performer or the institution for which the artist performs. Another consideration is the size of the stage on which the artist is likely to perform. Small stages may require a studio upright. Competition in the U.S. market is based on a variety of factors the most important of which are price; styling; brand name; availability; service; and perceived determinants of quality such as tone, tuning stability, workmanship, and durability. Each brand of imported and domestically produced pianos has its advantages. Certain U.S. producers have advantages over those of imported pianos because of name recognition due to traditionally high quality or an association with an organ line. Some imports offer price advantages over U.S.-made pianos in some models - particularly grand pianos. Many dealers allege that the polyester finish and continental styling are an advantage for the imported pianos in appealing to the market. During the public hearing the technical expert for the domestic industry pointed out that tonal quality was a key factor in piano selection. It was further pointed out that the domestically produced U.S. piano has a more mellow tone, needs service and voicing less often, and stands up to U.S. climate variations better than imports. The technical witness pointed out that the Japanese piano tone was sharper than that of the U.S. instrument. Generally, it is recognized that pianos from Korea incorporate the same type of tonal qualities, since Korean models imitated the Japanese item. In terms of quality, the U.S. and Japanese pianos are generally viewed to be comparable. Korean pianos are considered to be of lesser quality.
Imports are concentrated in area: where it was felt that they could establish a market niche, i.e., in large, professional quality uprights, lower-priced grand pianos and by offering styling and finish that is available on a limited basis from U.S. producers. However, when all of the factors are taken into account, imported and domestically produced pianos are extremely competitive.
The two major producers in Japan used similar approaches to enter the U.S. market in 1960. Each offered a limited selection of moderately-priced, fair-quality uprights and grand pianos to the U.S. market. Over the next two decades, each upgraded the quality of its pianos and broadened its range of price points, models, styles, and finishes. In addition, they expanded their technical and educational services to dealers, piano tuners, teachers and potential customers. During the early 1990's both of these manufacturers started offering pianos being manufactured in China or Indonesia . In addition the two principal Japanese producers chose to maintain a limited number of dealers, generally not allowing more than one each per market area. In this way they can control the prices and the discounts. Once a dealership is established and a beginning inventory shipped, future shipments are made only to replace sales. Consequently, when the high interest rates adversely affected business during 1980-82, fewer of their dealers went out of business. As dealers sought to limit the lines they carried in order to reduce inventory, one Japanese producer became especially attractive because of its broad range of price levels, styles, and finishes and the other Japanese producer appealed to dealers because of a fast turnover rate.
Three Korean producers began exporting to the U.S. market in 1978, 1980, and 1981. Korean producers quickly began emphasizing low-end grand pianos. In 1982, grand pianos constituted 47 percent of the pianos imported from Korea, compared with 35 percent of those imported from Japan and 4 percent of those shipped by U.S. producers. Grand pianos are more labor intensive than uprights, giving Koreans a greater cost advantage in producing the former. Furniture styling is not as important for grand pianos as for uprights; thus, Korean producers could avoid competing against U.S. producers where they were strongest. In addition some U.S. producers started importing Korean pianos to round out their price lines and in 1982, grand pianos made up 77 percent of the Korean-made pianos imported by U.S. manufacturers.
Price - A critical factor affecting the retail price of a piano is the manufacturer's costs, which vary considerably depending on labor, raw material, purchased components, and overhead. The most significant portion of a piano's production cost is material, which ranges from about 50 to 60 percent of total cost. In general, domestic producers have a competitive advantage in raw-material costs over their chief competition in Japan and Korea. However, improved manufacturing process, vertical integration, and lower labor costs in foreign firms have offset this advantage in many cases. Lower labor rates give manufacturers in Japan and Korea a cost advantage over U.S. producers. This advantage is more significant for grand pianos than uprights and is greatest for Korean pianos
Applying average hourly labor rates estimated by the U.S. Department of Labor to the typical number of man-hours required to build a grand piano in the United States, the labor cost in producing the product domestically in 1982 was$1,886.40, compared with $931.20 in Japan and $195.20 in Korea.
Applying average hourly labor rates estimated by the U.S. Department of Labor to the typical number of man- hours. required to build a grand piano in the United States, the labor cost in producing a grand piano domestically in 1982 was $1,886.40 compared with $931.20 in Japan and $195.20 in Korea.
Korean pianos were priced above their U.S. competitors in the U.S. market, but they were usually priced much lower than the weighted-average wholesale prices for U.S. made grand pianos each year.
The weighted-average wholesale of spinets: by U.S. producer: increased by 45 percent during 1978-82, when there were no imports of spinets.
Imported consoles were priced higher than domestically produced consoles throughout the period, exceeding the domestic average by 43 percent in 1982. Imports from both Japan and Korea were priced higher than the average U.S. producers' price in each year. Prices of the Japanese models were 16 percent higher in 1982, and consoles from Korea were 11 percent higher.
Total imports of studio uprights as, well as imports from Japan, were priced higher than the U.S. industry average during 1978-82; Korean models were priced close to the domestic average. In 1982, studio uprights from Japan were priced 15 percent above the industry average, whereas imports from Korea were 11 percent below it.
Grand Pianos under 5 feet 6 inches. Imports of smaller grand pianos from all sources and from Japan were priced below the average for the U.S. product In each year during the period except 1978, finishing 10 percent less in 1982 for all imports and percent less for the Japanese units. The weighted average wholesale price of imports from Korea was above the industry average in 1978 and 1979, but finished 18 percent below in 1982. The margin by which imports are lower priced is even greater when the prices of grand pianos under 5 feet are considered separately. There were no imports in that category.
Grand Pianos 5 feet 6 inches to 6 feet 1 inch. Total # imports and imports from both Japan and Korea of intermediate-sized grand pianos were lower in price than the U.S. industry average in each year during 1978-82. Total imports were priced 32 percent below the average for the domestic product in 1982; imports from Japan and Korea were and 44 percent less, respectively.
Grand Pianos over 6 feet 1 inch, as with intermediate-size grand pianos, imports of larger grand pianos from Japan and Korea were, below the weighted-average prices for the U.S. industry in each year during 1978-82, with the price of pianos from Japan finishing 9 percent under the industry average in 1982, and the price of imports from Korea, 39 percent less. The weighted average price for all imports was higher than the average for domestic producers' prices in 1978 and 1979, but lower thereafter, finishing 16 percent less in 1982.
As a further indication of the competitive position of domestic and foreign pianos, a comparison of actual prices for comparable models of five types of pianos by each of the principal producers and importers was made. A ranking of the individual producers and importers, by price, revealed that Japanese uprights were generally priced in the upper-middle to upper range of suppliers in the U.S. market; Korean uprights were in the lower-middle to middle. In the grand piano market, the prices of all U.S. producers except one were above those for imported pianos. This single U.S. producer is one of the largest producers of Grand Pianos and enjoys a combination of economies of scale and vertical integration not currently available to other U.S. grand piano manufacturers.
QUALITY
As previously stated, a piano is both a piece of furniture and a musical instrument. Several factors determine quality: (a) the tone, touch, and tuning stability of the musical instrument; and (b) the beauty and durability of the furniture. As previously noted, the tonal qualities of U.S., Japanese and Korean pianos are different. In addition, touch characteristics vary with some U.S. and Japanese higher-priced pianos incorporating an action which permits a quicker touch response. All Korean producers, some Japanese producers, and most American producers utilize an action with a slower response. U.S. producers claim that there is greater stability consistency in the voicing and tuning. particularly with respect to stability, in the U.S. product. The degree of quality achieved depends on the material used, the structural design of both the furniture and musical instrument aspects, the manufacturing processes used, and the skill of the work force.
Domestic manufacturers produce pianos that fall in the full range of the quality spectrum. Uprights and Grand Pianos are built on separate assembly lines, in the United States, as well as in Japan and Korea. However, a spinet and a concert grand may be built under the same roof. The production of the grand requires more demanding specifications with less emphasis on speed, and a higher skilled work force. The largest manufacturers may produce different models in a general category which will vary according to specifications and quality in order to offer the consumer a variety of price levels.
MARKET SHIFTS
Domestic producers have maintained a dominant position in the U.S. market for upright pianos though they are being challenged, primarily by Japanese models, in the studio end of that market. U.S. manufacturers have exploited their ability to mass produce spinets and consoles in attractive furniture styles at relatively low prices to appeal to middle-income homeowners. Unfortunately high interest rates associated with the recession severely restricted this market. It is anticipated that the market for consoles will bounce back with the return of lower interest rates. However, it is believed that the market for spinets will stay weak, reflecting demographic changes (fewer beginning students) and an increasing trend in which homeowners are demanding higher quality sound than that afforded by the spinet.
This trend toward more emphasis on quality has also seen a growing proportion of "professional" or studio uprights sold to homeowners instead of institutions such as schools and churches. This development has benefited Japanese producers, because studio models constitute the bulk of the market in Japan and manufacturers there have wedded the mass production associated with economies of scale together with attention to quality requisite for success in the studio market. In an effort to. better compete with the Japanese, one domestic firm has made a substantial investment in equipment. This firm is also enhancing the cosmetics of its studio models, despite a resulting increase in price.
In contrast to their treatment of the upright market, U.S. manufacturers have not applied modern production technologies to operations on grand pianos. Industry sources explained that domestic firm's have lacked the economies of scale to justify the substantial investments that would be required for U.S. producers to keep pace with the advancements made in Japan. Whereas the Japanese producers have an advantage in production efficiencies, the Korean manufacturers have a distinct wage advantage in this labor-intensive end of the piano business. As a result of lower costs of production for both the Japanese and Koreans, imports from these sources have consistently been priced below those of all but one U.S. manufacturer. Japanese-made grand pianos compete on the basis of both price and quality. As the price of the Japanese grand pianos increased over time, it left a void in pricing now being filled by the Koreans.
Note: Import pianos, supplied 46 percent of U.S. apparent consumption of vertical pianos during January-September 1998, up from a 35 percent market share for the same period in 1997. Imports of vertical and grand pianos from Japan, Korea, China, and Indonesia accounted for 93 percent, by quantity, of total U.S. imports of pianos during January-September 1998. U.S. producers are major importers, buying foreign-produced pianos to complement their product lines.
In foreign developments, the growth of Chinese production and exports in the 1990s has been notable, both from independent Chinese producers and operations established in China by other Asian producers. During January-September 1998, the quantity of U.S. vertical piano imports from China more than tripled compared with the same period in 1997, increasing China’s share of U.S. apparent consumption from 6 percent to 16 percent.
U.S. piano producers faced numerous competitive disadvantages during 1994-98: Japanese and Korean producers’ operations in Asia were more automated than operations in the United States; Asian producers, with the exception of Japan, have considerably lower labor costs than U.S. producers; the East Asian financial crisis drastically curtailed piano sales in the home and regional markets of principal Asian piano manufacturers, and it appeared that pianos were redirected from these markets to the U.S. market; and the national currencies of three of the four principal Asian competitors significantly depreciated in real terms against the dollar during the period under consideration. U.S. producers, however, have the following advantages: close proximity to wood resources, more experienced labor force in making furniture-style pianos, and lower transportation costs when selling in the U.S. market.
