TAG McLaren Audio to Cease Production?

The international uncertainties of 2003 have not been kind to the specialist hi-fi sector, and are probably a key factor in this week's shock announcement. In a statement that sounds depressingly valedictory, the press release (reproduced in full below) baldly states: "TAG McLaren Audio ceases development of new products and commences a full strategic review of its participation in the audio market," before signing off with, "TAG McLaren Audio would like to thank everybody for their kind support over the years."

Although those simple sentences do sound pessimistic, and are not going to help the confidence of the trade and customers—both current and potential—in fact no final decisions have yet been made, I am told. As the release states, the "strategic review" is only just getting under way.

As we understand it, this press release was drawn up by lawyers, as a requirement of UK employment law, to allow for a statutory consultation period following the decision to eliminate jobs in the workforce (called "redundancies" in the UK). Certainly the company is trading, is continuing to trade, and plans to go on doing so in the future, even though research into new products is being curtailed.

The release continues, "Products already introduced into the market and their relevant, existing upgrades will remain available for the time being. Warranty, repair and Helpdesk services will continue to be available, whatever the outcome of the strategic review."

The fact that the brand is so closely linked to that of the much larger TAG McLaren Group means it would be difficult to put just the audio company up for sale. And since the company is not being closed, customer backup would seem pretty secure. Furthermore, there are still plans to release certain upgrades which are already well advanced—specifically the "Height Channel" software upgrade for the AV32R/DP and AV192R, and the VSM2048 Video Scalar hardware module for the AV192R.

The company blames its troubles on the current state of the world economy. The fact that all the major economies are currently simultaneously depressed has had a significant negative impact on the market for high-quality audio and home-theater products. According to TAG McLaren, a combination of soft prices and heavy discounting "has made it increasingly difficult to operate on commercially acceptable margins consistent with the levels of development investment required."

TAG McLaren Audio was founded in 1998, following the company's acquisition of British amplifier manufacturer Audiolab. That move took the whole industry by surprise, but the fact that such a serious high-tech company was getting involved in audio also created considerable optimism. Among the relatively small companies specializing in serious hi-fi and home theater, few were prepared to match TAG McLaren's substantial investment in new technologies, so the current retrenchment is particularly unwelcome.

Certainly TMA has made mistakes, especially on the distribution side of things. Some dealers have expressed little surprise at the turn of events, accusing the company of arrogance in the way, for example, the original Audiolab products were dropped and replaced by products at substantially higher prices with different styling [and that didn't appear to offer any significant advance in sound quality—Ed.].

For legal reasons, the company's CEO, Dr. Udo Zuker, declined be quoted directly for this article, but he remains unshakably optimistic that the company will weather its downsizing, and that it will get through the current difficulty.

Here is the complete text from the press release:

TAG McLaren Audio Limited ceases development of new products and commences a full strategic review of its participation in the audio market.

Since its inception in 1998, TAG McLaren Audio has dedicated itself to producing the finest quality audio and audio visual equipment available. The standard and quality of its products have been evident through numerous awards of excellence and countless exceptional product reviews.

However, the present world economy has had a significant impact on the market for high quality audio and audio visual products and this has made it increasingly difficult to operate on commercially acceptable margins consistent with the levels of development investment required.

It is for these reasons that TAG McLaren Audio has ceased development of new products and will forthwith commence a full strategic review of its continued participation in the audio and audio visual markets.

-Products already introduced into the market and their relevant, existing upgrades will remain available for the time being.

-Warranty, repair and Helpdesk services will continue to be available, whatever the outcome of their strategic review.

-The following product upgrades are almost completed and will be made available: Software Upgrade "Height channel" for AV32R DP/AV192R and for the time being the Video Scalar Module VSM2048 for AV192R.

TAG McLaren Audio would like to thank everybody for their kind support over the years.

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