Home entertainment specialist Bang & Olufsen is entering the in-car audio market to make up for losses in its core business.

Starting late this year Audi will offer a 14-speaker, 1,100-watt B&O audio system in the upper-premium A8. The system, which will debut in September at the IAA in Frankfurt, will cost "a few thousand euros," said Audi chairman Martin Winterkorn.

Audi is B&O's first auto partner, but the Danish company aims to work with Germany's other premium car makers. B&O CEO Torben Ballegaard Soerensen expects that its in-car audio business will represent more than €60 million of the group's total sales by 2010. B&O is on track to make sales of about €460 million during its 2004-2005 business year, which started June 1, 2004.

The company wants to increase its in-car audio business to make up for the continual drop in sales of home entertainment equipment.