Sirius XM (NASDAQ:SIRI) is taking a number of steps that will ramp up its total addressable market in the U.S. The satellite radio company has done very well in terms of achieving healthy penetration rates and, in the process, has amassed more than 25.8 million U.S. subs. Going forward, the company's subscriber count should increase substantially.

Higher penetration
The number of cars on the road in the U.S. stands at roughly 260 million, whereas Sirius XM has less than 26 million users. It's not hard to see that there's significant room for heightened penetration in the U.S. That being said, the company doesn't need all of those users and, if the company can grow its current penetration from 10% to 15%, that would translate into 13 million more users for the company down the road. And with a growing population and more cars on the road, that's a very achievable scenario five to 10 years down the road.

Sirius XM's majority shareholder Liberty Media (NASDAQ:FWONA) made similar remarks about the company's total addressable market. Liberty's CEO Greg Maffei stated that they don't anticipate all the automobile users to adopt Sirius XM, but a small piece of that huge market would be enough for Sirius XM. So, Sirius XM growing its total customer base to 35 million-40 million subscribers in the next decade is not a pipe dream.

In addition, AM/FM radio has more than 200 million weekly listeners and, with more aggressive marketing and OEM roll-outs, Sirius XM can expand consumer adoption of pay radio. Sirius XM has a lot of exclusive content, and offers more than 140 channels on its service, so the company provides a great value proposition for customers. Sirius XM's conversion of paid or free-trial customers into self-pay customers stood at 42% in Q1 2014, and the company can increase this conversion rate as it's constantly adding exclusive content, including highly valued sports content.

Addressable market increasing
The world's largest radio broadcaster has also taken material steps to tap into certain consumer subsets that have historically not been heavy users of Sirius XM. The company will be more focused on addressing female drivers, as well as Hispanic customers.

In addition, the company is aggressively adding more dealers to get more customers from the large pre-owned car market. In 2011, Sirius XM had 3,700 dealer locations available to market a Sirius XM subscription, and this grew to more than 12,500 dealers recently. Having more dealers working for Sirius XM due to its partnership program will grow the company's total addressable market from this sizable pre-owned car space.

Car sales are up
Auto sales in the U.S. are a major driver of the company's fortunes. New car sales have rebounded, and have increased every year since they hit a recent low of 10.4 million back in 2009. They're forecast to be 16.1 million and 16.5 million in 2014 and 2015, respectively, and that is very good news for the company. Sirius XM can ramp up its marketing to households with two or more cars by luring them with a multi-radio discount, and also make them more ingrained into the Sirius XM system in the long run.

The company recently struck a deal with the sixth-largest automaker in the world, Ford Motor (NYSE:F), to offer in-car infotainment systems. From 2015 onward, buyers of Ford vehicles with navigation systems will get a five-year subscription to Sirius XM's Traffic and Travel Link services, and customers who purchase a Ford vehicle equipped with a satellite radio will get a six-month subscription to Sirius XM's All Access Package. Ford Motor Company sold 6.3 million new cars and trucks worldwide in 2013. Such extensive distribution and partnership agreements with leading automakers will enable Sirius XM to see healthy grow in its self-pay subscriber base.

The bottom line
Sirius XM is making a number of moves to grow its subscriber base. The company's partnership with leading OEMs, like Ford and pre-owned car dealers, will aid the company substantially in growing its total subscribers and revenues. In the long run, Sirius XM can grow its total subscriber base to much higher levels.