More than half (54.7%) of marine industry participants expect sales to increase 5% to 10% this year, according to survey results released today (Feb. 28) by GE Capital, Commercial Distribution Finance (CDF). That’s up from the 43% who expected growth in that range last year.
That sentiment tracks closely with CDF’s forecast of 8% growth for the U.S. marine industry in 2014.
“Our theme for our annual industry conference this year is ‘Riding a Wave of Optimism’ and that really reflects our outlook,” said Bruce Van Wagoner, president of CDF’s marine group, a leading provider of financing to marine dealers. “We see a stronger industry that’s poised for growth.”
This comes in spite of lingering worries about consumer demand, which is the top concern of 64.6% of survey respondents, up from 42% in 2013. The second-greatest concern was product affordability at 12.5%.
“Although consumer sentiment is still mixed, consumption rose for 16 consecutive quarters,” noted Rob Podorefsky, managing director of GE Capital’s Interest Rate Management Group. “The labor market is slowly improving, which could create some more opportunity, and inflation is subdued right now. Steadier gasoline prices should help the U.S. economy — and the marine industry — too.”
The industry has a positive outlook when it comes to product availability, according to 37.1% of survey respondents. It’s excited about new model and product introductions, according to 34.7% of respondents, and more “base” or lower-cost models, according to 31.6%.
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Rusty Collins of Eagle Lake Marine in Edwardsburg, Mich., can’t wait for the lake to start thawing.
“Once the snow starts to melt, people are going to start to get the itch,” he said. And it’s going to get busy in a hurry, he believes.
As reported by the South Bend (Ind.) Tribune, Eagle Lake Marine saw a lot of activity at the Michiana Boat & Sports Show at the Century Center in South Bend the first weekend in February.
Interest is definitely up. Eagle Lake Marine has even added an 11th staffer.
“You can really tell that stuff has turned around,” said Collins, a technician/salesman, who started at the business four years ago. “We actually decided to pick up another employee this year to give us some more help because it’s picking up.”
New powerboat sales are expected to increase 5% to 7%, according to the Chicago-based National Marine Manufacturers Association (NMMA).
An even bigger example is what’s going on at Nautic Global Group in Elkhart and Syracuse. The company is adding 70 people right now just to keep up with the demand of its five boat brands. And several hundred already work at its three facilities.
“We are currently expanding production across our five boat brands — Hurricane, Rinker, Godfrey Pontoons, Polar Kraft and Parti Kraft — and that has led to the need to hire 70 new positions for our Elkhart and Syracuse facilities,” said Doug Sexton senior vice president of sales and marketing for Nautic Global Group.
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The National Marine Manufacturers Association (NMMA) announced that as 2013 comes to a close, the U.S. recreational boating industry will continue its post-recession climb with an estimated 5% increase in new powerboat retail sales.
According to a press release, the increase comes on the heels of the industry’s 2012 rebound when new powerboat retail sales increased 10% — the industry’s first sign of recovery. In 2014, NMMA expects the recreational power boat sales will continue to grow another 5% to 7%.
What’s more, retail dollar sales of new powerboats are expected to be up 8% in 2013, signaling that the mix of boats being purchased includes higher priced boats and that Americans are investing more in boating.
“The housing market has improved, consumer confidence has steadily increased the last two years, and consumer spending is on the rise—all factors that are helping to fuel stable growth for the U.S. recreational boating industry and further sales in 2013. In addition, we’re seeing more and more Americans take to the water, as our participation numbers are at an all-time high — 88 million Americans went boating in 2012. This indicates that with experience on the water comes an interest in life on the water and the subsequent purchase of a boat,” noted Thom Dammrich, president of NMMA. “If economic growth persists and the recreational boating industry continues gaining participants, we anticipate sustained growth in 2014 and into 2015 and 2016.”
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In an old industrial building where Wellcraft once made the Scarab cigarette boats made famous on 1980s TV show “Miami Vice,” the centerpiece these days is a giant robotic router.
As reported by the Sarasota (Fla.) Herald Tribune, the four-legged mechanical monster sprawls over a 20-foot-long chunk of high-density foam that will ultimately define the deck of a freshly designed yacht.
The current activity stands in stark contrast to recent years, and is a potent symbol of how far the region’s boat building industry — one of Southwest Florida’s most important historic drivers — has come.
Throughout the Great Recession and its aftermath, from 2009 until last year, the old Wellcraft complex — 35 acres and 350,000 square feet of buildings — stood empty. Its parent company had moved operations to Michigan.
Along with Chris-Craft Corp., which furloughed the remainder of a shrunken workforce in late 2008, and Donzi Marine, which pulled up stakes for North Carolina in 2010, the empty Wellcraft complex stood as a powerful reminder of the demise of local boat building.
“Chris-Craft and Wellcraft were definitely big production guys,” said Wylie Nagler, the founder and head of the Bradenton-based Yellowfin Yachts, which has emerged as a major player regionally.
“There were a lot of vendors that they kept alive,” he added. “When they plummeted, a lot of those guys went out of business.”
Before the economic downturn began in 2007, boat building accounted for roughly 2,000 direct paychecks in the region. Today, it’s about a quarter that figure.
Countless others, from teak deck makers to welders to electrical system outfitters, got hammered as well.
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The National Marine Manufacturers Association (NMMA) is touting three emerging markets as potential areas of export for boatbuilders. As reported by Sounding Trades Only, the group is offering members a chance to visit and exhibit at several shows at a discount.
The NMMA is working closely with organizers of the new International Boat Show and Festival scheduled for Oct. 17-20 in Sanya, Hainan, China. The group is also spearheading a U.S. pavilion March 22-24, 2014, at the Cartagena Boat Show in Colombia.
Because the Korean government has loosened regulations on marine recreational activities and yacht use — now actively supporting growth of a recreational boating industry — the NMMA plans to return with an even larger North American presence June 12-15, 2014, at the Korea International Boat Show in Seoul, South Korea.
The group is also still supporting a U.S. presence in mature markets, offering members a chance to exhibit Nov. 19-21 at the Marine Equipment Trade Show in Amsterdam; Oct. 2-6 at the 52nd Genoa Boat Show in Italy; and May 22-25, 2014, at the Sanctuary Cove International Boat Show in Queensland, Australia.
When the recession hit, the boating industry took a huge dive, as consumers cut back on big-ticket luxury items and financing opportunities dried up.
But now that the economy is on the path to recovery, boating is bouncing back – and it’s doing better than ever.
This summer, the National Marine Manufacturers Association (NMMA) reports that more than 88 million boaters are expected to go out on the water, and the Fourth of July is the biggest holiday for the industry.
“We always have an uptick the week before the Fourth of July, because there’s great weather and people want to be with their family,” says Rick Danderweel, the store manager of North Texas Marine in Fort Worth.
And it looks like this summer will keep getting hotter and hotter for the boating industry, which grew 10% last year – and is continuing to see huge growth.
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New data from the National Marine Manufacturers Association (NMMA) show 88 million Americans expected to take to U.S. waterways this summer.
According to a press release, NMMA reported that recreational boating in the U.S. has an annual economic value of $121 billion. The industry’s rising tide supports 964,000 American jobs and 34,833 businesses, generates $40 billion in annual labor income and drives $83 billion in annual spending.
The NMMA, on behalf of the U.S. boating industry, released these findings as part of its annual U.S. Recreational Boating Statistical Abstract, a collection of data and analysis on the state of the U.S. recreational boating industry.
Additional data highlights include:
New Boat Sales
• Retail sales of new power and sailboats increased 10.7% in 2012 to 163,245, demonstrating a post-recession recovery for the industry. (Note that this number includes inboard, outboard, sterndrive, jet and sail boats).
• New powerboat (inboard, outboard, sterndrive and jet boat) sales increased 10% to 157,300 in 2012.
• New sailboat sales increased 29.2% to 5,945 in 2012
“Summer is a peak selling season for recreational boats, accessories and services throughout the U.S. as people look for ways to disconnect from the daily grind and enjoy fun times on the water, “ said Thom Dammrich, NMMA president. “New boat sales have historically been a barometer for the U.S. economy and the steady sales increases we’re seeing is being reinforced by the slow uptick in consumer confidence, housing and spending. As economic growth continues, we anticipate sustained steady growth through the remainder of 2013.”
In light of an improving consumer outlook, more than half of marine industry survey participants say now is the time to increase inventory levels to be fully stocked for the spring selling season.
That’s according to results released by GE Capital, Commercial Distribution Finance (CDF), which reported that 51% of respondents said it was the best time for dealers to increase inventory.
GE Capital’s survey was conducted Feb.13-15, according to The Wall Street Journal’s Market Watch. The respondents are a variety of marine industry participants, including manufacturers, dealers and distributors.
“Overall, our data indicate sales are improving, costs are down and earnings are up at the dealer level,” Bruce Van Wagoner, president of CDF’s marine group, told the paper. “We believe that 2013 will look a lot like 2012 — slow and steady growth in a smaller, healthier market.”
Forty-three percent of survey respondents said they expect sales to increase 5% to 10% this year, and 30% said they expect sales to increase 10% to 15%.
CDF’s forecast calls for the marine industry to grow about 8% in the United States in 2013. “Of course, positive news on some of the most critical economic factors could kick up consumer demand and drive industry performance beyond current expectations,” Van Wagoner said.
Forty-two percent of survey respondents said consumer demand was their greatest business concern, down from 64% in 2012.
Asked which trend will have the largest impact on the boating industry this year, 32% of respondents pointed to the popularity of low-cost or “base” models, up from 23% last year. Thirty percent of respondents expect long production lead times, compared to 21% last year.
The state of the marine industry is looking up, with sales of boats and engines expected to be up 10% this year and another 10% in 2013, National Marine Manufacturers Association (NMMA) president Thom Dammrich said at the industry breakfast that marked the opening of the 22nd Annual International BoatBuilders’ Exhibition and Conference.
“There’s a new spirit in the marketplace,” Dammrich told about 200 people at the Oct. 2-4 event in Louisville, Ky. “If you look at the data, there is a reason there’s a new spirit — because things are turning up, slowly turning up, slowing improving and that creates a more positive spirit.”
Soundings Trade Only reported that in 2011, sales of outboard engines and boats rose to $6.8 billion, Dammrich said. “People are still buying boats — and even through the recession people were still buying boats,” he said. “People still have a very strong desire to get out on the water.”
Boating participation has been up in five of the last six years, and 82 million adult Americans went boating in 2011, Dammrich said. He cited a U.S. Fish and Wildlife Service survey that showed fishing participation was up 11% during the last five years.
Looking across the boat yard at WakeSide Marine on the north side of Elkhart, Ind., owner Jeff Haradine saw blue skies and sunshine both in the view outside the window and on his balance sheet.
The pontoon and sports boat dealership on S.R. 19, near Simonton Lake, has compiled a healthy increase in sales over the past year. Banks are lending to consumers who are comfortable with their finances and have decided they can afford to go boating, The Elkhart Truth reported.
“I’m having a hard time seeing the economy as bad as people say it is,” Haradine said.
WakeSide reflects the upward trends being posted in the boating industry as a whole, including pontoon makers in Elkhart County. Thom Dammrich, president of the National Marine Manufacturers Association, noted 2011 was the first year the industry recorded an increase in sales since 2006. In addition, he expects retail activity to continue to grow in 2012 between 4% and 5%.
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Boat inventory is leaving showroom floors twice as fast today as it did a couple of years ago.
Sounding Trades Only reported that Bruce Van Wagoner, president of GE Capital’s commercial marine lending group, delivered that message during an address on the state of the marine industry via podcast last week with National Marine Manufacturers Association (NMMA) president Thom Dammrich.
“That’s a very promising indicator,” Matt Gruhn, president of the Marine Retailers Association of America, told Soundings Trade Only. “We’ve traditionally been known as a two-turn industry, but I think it’s really a little less than two turns, so for us to be up and over that, it means we’re managing our inventory better.”
Inventory more than a year old is at a historic low of 13%, compared with 47% at the recession’s peak, Van Wagoner said in the podcast.
The decision to buy a boat can still be impulsive if consumers see what they want, Dammrich pointed out. That’s why “dealers really need to make sure they have adequate inventory levels,” Van Wagoner said.
“The dealer’s risking losing a sale to a spontaneous buyer if what that person’s looking for is not in stock or if they don’t see a range of choices,” Van Wagoner said. Inventory is one-third less than it was at its peak, he said.
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National Marine Manufacturers Association (NMMA) President Thom Dammrich is asking members to raise $125,000 this year to get as much representation on Capitol Hill as possible through the political action committee.
“As you know, the boating industry faces significant legislative challenges that could negatively impact the boating industry — and your bottom line,” Dammrich said in a letter. “Recreational boating must support candidates who share our goals and are sympathetic to our positions. A strong BoatPAC is vital if we are to protect our industry against harmful legislation.”
Soundings Trade Only reported that the BoatPAC has already raised $59,000, Dammrich said in the letter.
Recreational boating had direct industry sales last year of more than $32 billion and supports hundreds of thousands of jobs, Dammrich said.
“It is time to stop imagining and start executing,” Dammrich said. “Political visibility will be crucial in this upcoming election cycle. We ask you to join our campaign to grow the industry’s political strength in Washington, D.C., by supporting the National Marine Manufacturers Association BoatPAC.”
A variety of issues confront the industry today, including potential punitive tax measures on boating, the introduction of E15, an activist regulatory agenda, trade barriers in expanding markets, intellectual property protection and enforcement, small vessel security initiatives, punitive measures against wood importers and greenhouse gas regulations, Dammrich wrote.
The National Marine Manufacturers Association (NMMA) announced today (Oct. 11) that Progressive Insurance will be the title sponsor of its 18 boat and sportshows from 2012-2014.
“We’re thrilled to have Progressive Insurance on board as the title sponsor of NMMA boat and sportshows,” said Ben Wold, executive vice president of NMMA in a press release. “Our involvement with this great organization will help bring boating to more consumers and reach millions of potential show attendees, elevating the NMMA shows’ brand. In addition, this partnership will provide new resources to invest in our shows to help grow attendance, improve the consumer experience, and ultimately attract more customers for our exhibitors.”
“We’re excited to collaborate with the NMMA and support the boating industry,” said Rick Stern, Progressive’s boat product manager. “Seventy-five million people participated in recreational boating in 2010, and hundreds of thousands of them attend boat shows. This sponsorship is a great opportunity to let boaters know that with Progressive boat insurance they can go wherever they choose, whenever they choose and have peace of mind they’re protected with our flexible, year-round coverage.”
After several years of low tide in the marine industry, 2011 may be the year that finally lifts all boats, Specialty Fabrics Review reported.
“The marine industry is starting to see signs of recovery as we move past the recession,” says Jeff Malehorn, president and CEO of GE Capital’s Commercial Distribution Finance (CDF) at the Miami International Boat Show, held Feb. 17-21.
A survey released by CDF showed that 38% of respondents expected sales to increase in 2011, and 54% said the best time for dealers to increase inventory levels is now. Sales of lower-ticket items, such as aluminum boats and recreation boats, are rebounding faster than luxury yachts.
The biggest obstacles to growth, according to the marine dealers and manufacturers surveyed, were consumer demand (70%) and reduced level of showroom and field inventory (40%).
Editor’s Note: This thorough story about the RV and boat industries was written by Reagan Haynes and is taken from Soundings Trade Only Today.
There’s a long-standing belief that the RV market leads the boating industry by about six months. Feedback from those in the RV and marine trades indicates that formula is holding true in this recession, even though the numbers show both industries are tracking similarly.
Still, there are leading indicators on the RV side that are hard to ignore. Fleetwood Enterprises Inc. and Monaco Coach Corp., two of the RV world’s largest manufacturers, filed for and emerged from Chapter 11 restructurings. While some components of the brands were lopped off or modified (or sold off entirely), both remain in business, giving the industry a much welcomed sense of stability.
Meanwhile, the marine industry’s second-largest manufacturer, Genmar, remains embroiled in a difficult bankruptcy process, with no clear sense of what the final outcome will be. That not only is a concern to dealers and industry insiders, but some believe it’s one reason lenders are more hesitant to loan money to marine businesses than their RV counterparts.
The marine and RV industries share some of the same impediments to recovery, including financing and the fact that they sell “luxury” items.
Manufacturers seem to be approaching the recovery differently, too. Some boatbuilders are keen to offer more modest and affordable options to consumers, while many say RV manufacturers are looking for the next big “wow” factor to spur consumers to trade up before they’re quite ready.
Both industries have had to deal with credit crunches that have stunted their rebounds, and most forecast a long, drawn-out recovery. Suppliers and vendors to both marine and RV manufacturers have faltered precariously. Weakness in consumer confidence is keeping sales difficult to come by.
Those customers who are buying are tending toward smaller boats and RVs. They’re the “bottom-feeders,” as one insider says – looking for, and often finding, a steal. But if the RV industry is a leading economic indicator, there are some reasons to be hopeful.
Credit seems to be easing slightly, as RV dealers find both wholesale and retail financing options through local lenders who are looking to replace lost car dealership clientele. Shipments are increasing, meaning at best that improved sales are ahead and, at worst, that dealers are clearing and replacing their aged inventory with new models.
And whether the numbers support it or not, the prevailing perception is that the RV industry is doing better overall – a definite boost at a time when everything hinges on consumer confidence.
Both the RV and marine industries have lost dealers and manufacturers. The RV industry has counted 170 dealerships that have gone out of business since 2007, out of a total of 3,000, according to Phil Ingrassia of the national Recreation Vehicle Dealers Association (RVDA). It’s a small percentage, but it’s much higher than the typical 15 to 20 closings the RVDA tracks in a typical year.
The Recreation Vehicle Industry Association (RVIA) estimates that about 50% of its work force has been laid off, according to spokesman Kevin Broom. The RV industry has about 80 manufacturers – down from about 100 – whereas the marine industry has about 1,500 boatbuilders, according to Scott Stropkai, an RV industry analyst with Statistical Surveys Inc. (SSI) in Michigan.
Some think the marine industry must contract more to shrink capacity to demand, but experts say it won’t become as small as the RV industry. “This is an industry with lots of small niches, more so than the RV industry,” so it needs more manufacturers and dealers, says Thom Dammrich, president of the National Marine Manufacturers Association (NMMA).
The NMMA estimates that around 20% of boat dealers have failed – some 1,500 of approximately 6,000. The marine industry is losing dealers more quickly than the RV industry because so many are undercapitalized and overstocked, says Phil Keeter, president of the Marine Retailers Association of America (MRAA). RV dealers tend to have one or two brands, while it’s common for boat dealers to carry five or more, making the RV dealer more stable.
“The (boat) dealer shouldn’t buy so much stuff; he shouldn’t try to be everything to everyone,” says Keeter. “He ought to be more focused.”
Just as unemployment numbers tend to be a lagging economic indicator, the RV industry seems to be a leading indicator, says Mac Bryan, vice president of the RVIA. Though sales dipped similarly through 2008 and the first two quarters of 2009, according to SSI data, the perception is that the RV side is rebounding ahead of the boating industry.
“We’re definitely seeing the RV side recover quicker than we’re seeing the boat side recover, although there are still some similarities where maybe larger motorhomes and larger boats are softer, and smaller boats and smaller trailer sales are improving,” says Chris Hoover of Ron Hoover RV and Marine Center, which has five locations in south Texas.
The RV industry definitely leads into recessions but not necessarily out, according to Mark Bretz, of Bretz RV and Marine in Missoula, Mont. This time Bretz saw the same early decline on the marine side. “I think that these industries were probably aware something was going on that wasn’t good for close to a year before a lot of other industries felt that,” Bretz says.
A shorter boating season makes the industries tough to compare in terms of who is first in or out of a recession, says Earl Stoltzfus, who has owned Stoltzfus RV and Marine in West Chester, Pa., for 42 years.
In 2006, the RV industry shipped 390,000 units. The 2009 projection was at 146,000, but a 27% increase is forecast for 2010 over “admittedly weak numbers,” Bryan says.
Bretz isn’t comforted by the new projection. “I just think that manufacturers are out of sync with retail,” he says. When dealers saw their business plummet, they quit buying. Now inventory is so low that they are buying to restock.
“But on the sell-through rate, it’s still not very good,” says Bretz.
Like many, Stoltzfus thinks the RV industry is healthier because major manufacturers have already worked through Chapter 11 restructurings. Though the largest boatbuilder, Brunswick Corp., responded quickly to the downturn by downsizing, the future of No. 2 Genmar has been up in the air since its Chapter 11 filing last June, leaving dealers, suppliers and consumers fearful of the future, he says.
Stoltzfus worries that Genmar is repeating the pattern of an RV manufacturer that hurt its dealers and customers in the Chapter 11 filing process. Though the assets were sold to a solid builder with a good reputation, they were sold on a net-net basis with no liabilities. That means approved warranties will not be paid and dealers are not able to sue for damages, he says.
“You don’t do that and get away with it,” Stoltzfus says. “They are currently trying to mend their ways, but it’s going to take a long time. They’re going to get a much smaller portion of the industry. The portion that is taking care of consumers and dealers during this time, they are the ones that will get more market share.”
The major RV bankruptcies came early in 2009 and were resolved during the summer, giving more weight to the idea that the RV industry leads marine. Bretz predicts that RV manufacturers will have a tougher recovery because, in the past, RV builders who filed for Chapter 11 typically didn’t emerge from bankruptcy, yielding their market share to survivors. This time, the same number of major builders is competing for a smaller market.
“Maybe these industries will end up like the airline industry – to be a survivor you have to go through every few years and do a bankruptcy again,” says Bretz. “I think part of it will make businesses, unfortunately, less afraid of debt, because it appears that if you take on a bunch of debt and don’t manage it very well, you get a get-out-of-jail-free card.”
However, the prolonged uncertainty caused by Genmar’s unsettled Chapter 11 is scaring off potential lenders, Hoover says. A banker that RV and Marine Center deals with told Hoover that, from a lending perspective, RV manufacturers are more stable than marine manufacturers. That makes banks hesitant to issue marine dealers floorplan money.
“Two of the three biggest RV manufacturers … both filed and both emerged, [so] it seems like just a hiccup,” Hoover says. “There’s still some question on where the marine manufacturers are.”
The marine industry is operating with only one national wholesale lender – GE – and the RV industry with three – GE, Bank of the West and Bank of America. Still, Stoltzfus says the two industries have suffered equally but that the RV industry has moved further beyond its low point. He believes he is paying more than he should for GE’s wholesale dollars but says he has no shortage of credit.
Bretz says there’s a mixed message being sent. “Legislators are saying they want to grow business, but meanwhile the banking regulators are being incredibly onerous on banks in many cases, and until that changes, I don’t think you’re going to see significant expansion” into RV and marine wholesale finance, Bretz says. “Regulators that had capital ratios that they thought were acceptable two years ago are now saying those ratios need to be twice as high, and the only way you can get there logically is to reduce outstanding loans. Until banks are positioned to where regulators stop getting them to beef up capital liquidity, you’re not going to see significant change.”
However, RV dealers have been resourceful with local lenders, and credit unions and have been helping them understand floorplan finance, says Ingrassia. RV dealers say they have had some relief across the board, since local banks are loaning wholesale credit lines.
One reason credit unions have been more open to providing credit is because they have undergone such a change in the auto market, Bryan says.
Marine and RV associations have joined forces to secure Small Business Administration loans that were to be spread between marine, RV and auto dealers. That program has performed below expectations, Ingrassia says, and though everyone expected the new program to take time, it’s taking longer than anyone thought.
Bryan speculates that the credit crunch on the retail side has caused a slowdown in the turnover of vehicles, perhaps similar to that of the marine industry. “Typically, people trade in RVs every four years, and my guess is that time frame has been lengthened,” says Bryan.
Factories ramping up
RV manufacturers are gearing back up to build more product, but Keeter says that won’t necessarily be reflected in the retail market.
After both industries focused on clearing out aging inventory, combined with a credit shortage, there is little product in the pipeline, Bretz says. “I believe RV manufacturers will have a relatively good 2010 just bringing inventories back to normal,” says Bretz. “That’s one of the problems with both industries – we don’t have good information about retail. There’s much better information about shipments, but in times like these [shipment numbers] tend to either understate or overstate the problem and are not a very accurate indicator of what’s really going on.”
The RV industry is also moving to a system that allows consumers to dictate production.
That is especially true for dealers who sell higher-end motorhomes, since those already were declining in popularity before the recession’s onset, Bryan says. In 2006, that segment accounted for about 15% of the 390,000 units sold. Now it’s less than 10%, says Bryan.
“Because dealer inventory is being watched very closely and because the cost of that inventory has … gone up in several different ways, dealers are reluctant to take on inventory they don’t think they can move very quickly,” says Bryan.
If the RV industry does, in fact, lead marine, that could be a cue for dealers who sell larger vessels to pay close attention to their inventories, because Bryan says no one anticipated such an extreme decline in that RV segment.
Retail credit could also be a factor. Bretz says he has problems securing financing for buyers of the expensive RVs he sells.
Ingrassia says dealer inventories have thinned, as has the competition with the liquidation market. Maybe it’s fortunate that few expect a swift upswing in either market, because many worry that decimated supplier ranks would be hard-pressed to keep up.
Dealers will have smaller inventories moving forward, Bretz predicts, and will understand the importance of turning them more than in the past. And it will take time before the manufacturers have the clout they had a few years ago.
“We’re in the process of opening a new store in Portland [Ore.], and we’re amazed at how many good product lines are available in what would be a pretty major market,” says Bretz.
The RV industry is unveiling new products for the upcoming model year at a pace likely to exceed marine, where some manufacturers are offering scaled-down versions of models, or resurrecting smaller, previously discontinued boats.
“I would say that is a pretty significant opposite,” says Hoover. “(RV manufacturers) are bringing out bigger TVs and fancier things and trying to give people a reason to buy.”
Some marine manufacturers say that after such a long trend of adding technology and gadgets to boats, there might be a consumer trend toward simplicity. But in the RV market, Broom predicts, that predilection will not just disappear.
There will be a trend to provide better value in the future, Bryan says. The marine industry seems to be catching up in terms of offering fewer options or more specific packages. Bryan says the RV industry has already made that shift. And even when people buy less-equipped vehicles, they buy add-ons after the fact, he says.
“That’s been a strongpoint in the industry – the aftermarket sales,” Bryan says. That being said, RVs are increasingly coming fully loaded with home conveniences like televisions and microwave ovens.
And though nobody expects a rapid rebound in either industry, Hoover says the family dynamic of both is giving him leverage in this uncertain economy. People are making choices about their limited disposable income, and in the end, family activities win. That gives him hope for both the marine and RV industries.