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Recreational Boat Sales

Old 02-27-2008, 04:41 PM
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Default Recreational Boat Sales

Recreational boat industry fights sinking feeling

By Rick Alm/The Kansas City Star, Mo.
Wednesday, February 27, 2008 8:53 AM CST

The nation's recreational boating industry is taking on water, and some local dealers are worried they might sink with the ship. "Anybody that tells you that business is great is lying," said Carl Johnson, co-owner of Sportsman's Outfitter & Marine in Lee's Summit.

"We feel fortunate that 2007 was flat. And '08 isn't going to be any easier," he said.

While new boat sales in the U.S. -- down to the smallest kayak and canoe -- were up 6 percent overall in 2006, sales in the key powerboat segment were down almost 5 percent. And experts fear that figure could hit double digits when 2007 data is released in May.

Preliminary 2007 data released by the National Marine Manufacturers Association disclosed wholesale shipments of powerboat units last year were down 14 percent, with the dollar value of that inventory down around 9 percent.

That disparity tracks with a 10-year trend of generally declining unit sales but steadily rising consumer prices.

In 2006, the association calculated the average price of a new boat, outboard motor and trailer package was up 3 percent from 2005, to $26,085. In 2000, the comparable price was $23,606.

Price creep is only one factor in the current boating industry slowdown. Other factors are rising gas prices, the subprime mortgage meltdown that has tempered consumer spending, and broader concerns about a slowing economy.

The bottom line is that sales, at best, have flattened in recent years for the $40 billion-a-year recreational boating industry.

Sailboat production was off 5 percent in 2007, to 14,158 units, according to the annual North American Sailing Industry Study. The latest drop capped seven years of production declines.

Industry giant Brunswick Corp. reported 2007 revenues from boat and motor sales were down 6 percent, with actual boat unit sales down 10 percent.

Family cruiser and luxury boat giant MarineMax Inc. recently disclosed sales at the company's 80-plus outlets fell 9 percent in the quarter ending Dec. 31. In an interview earlier this month with trade journal Boating Industry, MarineMax chairman William H. McGill said the numbers rivaled the industry's recession of the early '90s.

"While we have limited visibility into the remainder of fiscal 2008, initial results of the boat show season, industry data and our experience lead us to believe that marine retail sales have weakened even further."

Notably, more boats are being retired than are entering service.

According to the latest figures available from the U.S. Coast Guard, private boat registrations in the U.S. fell to 12.7 million in 2006 from 13 million a year earlier. And registrations were reported down 7 percent through the third quarter last year.

Florida was No. 1 with 988,000 registrations, followed by California, Minnesota, Michigan and Wisconsin.

Missouri was No. 14 with 324,826, including a No. 12 ranking for 212,000 outboard registrations. Kansas ranked No. 35 overall with 95,677 total craft.

Any downturn in sales and registrations ripples across related industries like local marinas and repair shops, regional resorts, fishing lodges and other watery vacation spots.

Manufacturers association president Thom Dammrich is trying to stay upbeat during the downturn.

"The Fed's lower interest rates will help us," he said at the January Kansas City Sportshow at Bartle Hall, one of 25 the association stages nationwide each year.

The show is the traditional kickoff to the local boating season, and at least some dealers said they were heartened by large crowds eyeballing the industry's latest boat models and boating gizmos.

"It's not on par with bumper years, but our sales were slightly up over last year," said Bruce Crowder, a manager and a former co-owner of Bruce Marine in Kansas City who recently sold the business but stayed on in a merger deal.

Dammrich said product innovation will help pull the industry out of its tailspin. New twists for this year include more fuel-efficient engines and computerized joystick docking steering systems that are helping to spur consumer interest.

"There are sales out there," he said. "There are people buying boats, just not as many as we'd like."

Dammrich acknowledged demographics may be working against the industry, with the aging of the baby boomer generation that has driven sales for 20 years.
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Old 02-27-2008, 06:58 PM
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Fewer boats on the water won't hurt my feelings. IMHO the popularity of PWC have hurt overall boat sales.
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Old 02-27-2008, 07:06 PM
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fewer new boats sales may help the used boat market
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Old 02-27-2008, 08:34 PM
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It's the GAS PRICES people not any of the other factors...Hinting it may go to 3.75- 4.00 just wait if they think it's bad now...Drop gas to 1.75 for regular and watch the industry rise again. GAS PRICES are what driving this econmy to a recession. They have been to high for to long and the ugliness is starting to materialize.
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Old 02-27-2008, 08:42 PM
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Interesting read. I wonder how much new laws have come into play with boat sales. Noise laws, the rediculous AL boat ban, increased enforcement, liability issues, increased emission standards, speed limits. Hell you can't even jump on a cheap jon boat and go fishing without dishing out $20 for a fishing permit and another $120 (OK) for registration.
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