U.S. automakers not jumping into HD Radio

By Sue Zeidler

LOS ANGELES (Reuters) - Radio broadcasters, facing increased competition from iPods and satellite radio, are pushing a new digital format called HD Radio that has so far failed to win over U.S. carmakers.

Hyundai Corp. (011760.KS: Quote, Profile, Research, Stock Buzz), BMW AG (BMWG.DE: Quote, Profile, Research, Stock Buzz), and Ford Motor Co.-owned (F.N: Quote, Profile, Research, Stock Buzz), Britain-based Jaguar plan to offer HD Radio, and other carmakers are also set to announce deals.

Because of the amount of time people spend listening to the radio in their cars, striking such deals will be critical if the technology is going to take off.

But officials from General Motors Corp. (GM.N: Quote, Profile, Research, Stock Buzz) and Chrysler Group said they were not rushing to commit to the devices, which would cost the struggling Big Three U.S. automakers as much as an estimated $600 million annually to install.

"We're investigating HD radio and we'll probably make a decision in six months. When you add up the cost, it's a lot of money," said Michael Kane, director of technology strategy for Chrysler, a unit of DaimlerChrysler AG DCXGn.DE.

Ford was not immediately available for comment.

The radios are estimated to cost about $45 each to install, or each of the three carmakers about $150 million to $200 million annually, automotive industry sources said.

HD Radio promises to deliver better sound quality than traditional analog radio and enables stations to broadcast multiple channels. More than a tenth of the estimated 12,000-plus U.S. radio stations have upgraded to the technology, including many in the country's top 100 markets.