Number of American Manufacturers Dwindles : Imports Invade U.S. Piano Market
“Thirty-five years ago, my father threw a Yamaha dealer out and refused to sell his pianos. ‘Til the day he died, he called them the ‘disposable piano.’ Well, it is, and we sell it. It’s an excellent piano, but you just don’t fix it.”
That’s the story of the piano business as summarized by Frederick Schaeffer, a third-generation piano dealer in the Washington area. Pianos don’t get the same attention as cars and steel and VCRs, but like so much else in American commercial life, that industry has been reshaped by imports.
In 1901, his grandfather founded Schaeffer’s Piano Co. in Silver Spring, Md. Until Frederick’s father, Albert, died four years ago, the company sold and painstakingly rebuilt pianos made in the United States--and watched its business wane.
Last year, in contrast, sales rose 20%. The key to the turnaround is the shiny new instrument his father denigrated: the low-cost, polyester-coated, bright-sounding grand piano mass-produced in Japan and South Korea. What little rebuilding that goes on is largely limited to Steinway grands made between the two world wars.
Schaeffer’s experience reflects those of piano dealers around the country. After a steady postwar gain, except in recession years, piano sales dropped sharply. From a peak of 282,000 in 1978, volume slumped by 46%, reaching a post-Depression low of 151,000 in 1985, according to the American Music Conference, a nonprofit organization in Chicago.
Only a Few Remain
From the hundreds of domestic producers in the early years of this century, the U.S. piano industry has shrunk to about a dozen manufacturers. In 1985, Aeolian Piano Co. in Memphis and Kohler & Campbell in North Carolina went out of business. Many brand names familiar to generations past--Mason & Hamlin, Knabe and Chickering--are perpetuated by other companies because their originators folded. All the actions of Baldwin pianos are assembled in Mexico. Wurlitzer grands are made in Korea. Yamaha makes pianos in Japan and also in Georgia; Kawai assembles instruments in California.
As sales and profits plummeted, the beleaguered U.S. industry raised prices, cut costs--and, many say, quality--but to little avail. Into what had been a labor-intensive industry, the Asian manufacturers introduced computer-controlled machines, high-frequency gluing and automated stringing as well as inexpensive labor. The U.S. industry failed in its attempt to get the government to declare that Japan and South Korea were dumping pianos in the United States at prices below what they cost to produce.
Imports continued to capture an increasing share of a shrinking market. Competition became--and remains--fierce.
Then, last year, the industry experienced a modest turnaround. The National Assn. of Music Merchants in Carlsbad, Calif., which surveyed 500 retailers, estimated that between 163,000 and 165,000 pianos were sold in 1986, a gain of up to 10%. Dollar volume, which fell by 9% in 1985, is also expected to rise--by about 10%, to around $528 million. At a trade show two weeks ago in Anaheim, Larry Lincoln of the National Assn. of Music Merchants predicted 1987 would be an even better year.
Many of the same factors that pushed piano sales down are responsible for their comeback: lower interest rates that help consumers finance big ticket items, a higher birthrate that means more children to play pianos, and a return of more traditional life styles.
Some baby boomers who took piano lessons when they were younger now want the same for their children. Model houses often feature the grand piano as a status symbol. For yuppies, it’s a Mercedes in the driveway and a Steinway in the living room.
“Some people can’t play a lick, but the piano has to say ‘Steinway,’ ” said Gene Bond, sales manager of The Piano Man, another Washington-area dealer.
Statistically, fewer than than one out of 10 customers buys a piano without musical intentions, he said. Such non-musical buyers regard it an investment as well as a showpiece. A 10-year-old Mercedes kept in mint condition, for example, retains half of its purchase price, whereas a vintage Steinway can be worth half or more of the current retail price. For instance, a 1938 walnut grand, bought for $1,175, is worth $11,000 today, or 56% of the price of a new grand, selling for $19,600. Forbes magazine calculated that the annual appreciation on a Steinway concert grand built in 1976 was 19.3%.
More than any other single factor, though, Oriental imports are responsible for the piano revival. The least-expensive import from the Far East sells for $1,500, compared with $69,000 for the most expensive German Bosendorfer concert grand.
In 1980, Japan and Korea had 11% of the market, a figure that by 1985 had risen to 38%, according to Richard L. Witherspoon, a data analyst for the International Trade Commission. Based on imports of 63,500 pianos during the first 11 months of 1986, the Asian share for the entire year rose to about 42%.
The United States was once the world’s largest piano producer. Now it ranks behind Japan and the Soviet Union, with South Korea close behind.
Though Steinway still makes two grands for each vertical piano, Japan and South Korea have all but pushed U.S. companies out of the grand piano market. Those two countries now account for about 80% of the grand piano market, according to dealers.
For example, Baldwin, a domestic producer, turns out 20 verticals--uprights and spinets--for every grand piano. The average retail price of a grand made in this country is $15,642, according to Ancott Associates, a company in the Cincinnati area that tracks prices of the more than 1,000 models. The average price of a Japanese grand is close behind at $13,108 because of the 60% rise of the yen against the dollar. However, since the South Korean currency, the won, is tied to the U.S. dollar, the average South Korean grand piano sells for $7,130.
Mix of Products Upgraded
Domestic manufacturers have retained more of the market for vertical pianos, where the price differences are not so huge: $3,153 for a small U.S. upright versus $2,794 for a South Korean vertical. Spinets, a U.S. specialty, are out of favor because people have become accustomed to richer tones. Though traditionally verticals outsell grands by about 4 to 1, dealers everywhere are scrambling to upgrade their mix of products. The baby Kimball grand, which is 4 feet 5 inches wide and sells for $4,290 attracts the same type of customer as the Mercedes-Benz 190E, the “baby Benz.”
Yamaha, Kawai, Tokai and Tadashi; Samick, Young Chang, Sojin and Hyundai are some of the Asian names that appear above the ivories (which are universally plastic now). Though the basic design and mechanism of a piano are international--88 keys, 3 pedals and a wing-shaped or rectangular case--experts insist there are substantial differences among brands.
Sound quality is highly subjective, and opinions vary sharply.
“We’ve gotten our ear used to electronic sound, so Oriental pianos satisfy the ear,” Schaeffer said.
In a 1983 study of international competition, the International Trade Commission stated: “It is generally recognized that U.S. and Japanese pianos are of comparable quality; Korean pianos are considered to be of lesser quality than both U.S. and Japanese pianos.”
