What does the wattage mean on car speakers and stereos?

04234

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I have 4 new speakers rated at 300W max output. The stereo is rated at 50Wx4. Does this mean that at the maximum volume level on the stereo I am only using 1/6 of the speaker's capacity?

This does not seem right because when the stereo level is halfway to maximum the speakers are extremely loud. They are not exactly high-end so I don't expect that 4 car speakers could blast at a volume 12 times higher.

What is the correct relationship between these wattage ratings?
 
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