The National Marine Manufacturers Association (NMMA) today (May 17) announced that in 2011 U.S. retail sales for recreational boats, accessories and marine services increased 6% to $32.3 billion, new power and sail boat retail sales increased 0.8% to 214,405, and boating participation increased 10% to 83 million.
The recreational boating industry has not seen an increase in retail sales since 2006, and the jump in participation is the largest proportion of adults (34.8%) who went boating since 1997, when 35.8% participated.
Released today, the NMMA’s annual Recreational Boating Statistical Abstract is the U.S. recreational boating industry’s most comprehensive compilation of statistics and research. The new data signals the beginning of a recovery for the U.S. recreational boating industry.
“Pent-up demand for boats following years of diminished willingness to spend by consumers, improved credit availability for buyers and boating businesses, positive shifts in consumer confidence and an overall interest in the benefits of the boating lifestyle are steering the industry toward recovery,” notes Thom Dammrich, NMMA president. “Americans’ passion for enjoying the boating lifestyle is taking precedent as they put aside concerns about the economy in favor of creating lifelong memories with loved ones.”
Anticipating what 2012 will bring the NMMA Abstract points toward continued slow growth: A survey, in conjunction with Foresight Research, of 3,100 boaters and non-boaters from December 2011 shows an estimated 15.2% of the 237.7 million adults living in the U.S. are actively engaged in shopping/planning to purchase a boat in 2012. This is an increase from 10% in 2010.
• Boating has an estimated annual economic impact of $72 billion.
• Eighty-three million Americans participated in boating in 2011, an increase of ten percent from 2010 (75 million) and the largest proportion of adults (34.8%) who went boating since 1997 (35.8%).
• Retail sales of boats, accessories and marine services increased six percent to $32.3 billion in 2011.
• Power and sail boat unit sales increased 0.8% to 214,405 in 2011 from 212,645 the previous year.
• An estimated 83% of boats sold in the U.S. in 2011 were made in the U.S.
• 83% of boat owners in the U.S. in 2011 had an annual household income less than $100,000.
Total attendance for the Progressive Insurance Chicago Boat, Sports & RV Show increased 7% despite slower days Thursday and Friday because of bad weather, the National Marine Manufacturers Association (NMMA) reported.
The NMMA said 35,402 people attended the event, which ran Jan. 12-16 at McCormick Place. The show switched its date pattern this year, moving from Wednesday-Sunday to Thursday-Monday to take advantage of the Martin Luther King holiday.
More than 500 boats were on display and more than 100 RVs were for sale. The NMMA said it is receiving reports from exhibitors that dozens of boats were sold at the show and heard good reports on the RV side as well.
“[We] talked to many people from not only all surrounding states, but as far away as Iowa. The buyer is back,” Duane Krueger, of Premier Pontoons, told the NMMA.
“We are excited to see the turnout that the Chicago Boat Show brought, and boat buyers are definitely shopping again,” added Betsy Arvai, of Skipper Buds. “Looking forward to the potential opportunities in the marketplace in 2012. We had a great selling show.”
The next shows up for the NMMA are the Progressive Insurance Baltimore Boat Show, the Progressive Insurance Kansas City Boat & Sportshow and the Progressive Insurance Minneapolis Boat Show, all of which start Thursday and run through Sunday.
“New” is the operative word in describing this year’s 20th anniversary International BoatBuilders’ Exhibition & Conference (IBEX), according to Soundings Trade Only.
New venue. New city. New aftermarket pavilion. New seminars. New events.
For the first time, IBEX moves out of South Florida and into the Midwest Sept. 28-30, taking over much of the Kentucky Exposition Center in Louisville, Ky., longtime venue of the RVIA’s National RV Trade Show. The other major change this year is the MAATS Aftermarket Pavilion, which was added after the demise of the Marine Aftermarket Accessories Trade Show.
“I think we’ll have a good show,” says Thom Dammrich, president of the National Marine Manufacturers Association (NMMA), which produces IBEX, along with Professional BoatBuilder magazine. “Will it be an all-time high? Probably not, because the industry is still in the doldrums a bit, but I think it will be better than last year.”
Schedule of Events
- IBEX runs Tuesday, Sept. 28, through Thursday, Sept. 30.
- IBEX All-Industry Breakfast: Tuesday, 7:30-9:30 a.m.
- Opening-night party: Tuesday, 6:30 p.m., downtown at Fourth Street Live.
- NMMA Using Market Intelligence for Market Growth: Wednesday, 8 a.m.-1 p.m.
- Exhibit Hall open Tuesday and Wednesday from 10 a.m. to 6 p.m.; Thursday from 10 a.m. to 4 p.m.
- Exhibitors’ Workshops: Tuesday and Wednesday, 1-2 p.m.
- Seminar hours: Tuesday and Wednesday, 8:30-10 a.m.; 3:30-5 p.m.; Thursday, 8:30-10 a.m.; 2:30-4 p.m.
Attendance at last year’s IBEX was down an estimated 31% from 2008, reflecting the challenging economic environment.
This year, even when there were months to go before the show opened, registrations, the number of exhibitors and the amount of exhibition space were up from 2009, Dammrich notes.
Carl Cramer, publisher of Professional BoatBuilder, says there’s a lot of excitement about the new location. Louisville, which boasts one of the largest convention venues in the country, offers less expensive hotels and restaurants than South Florida and is within a day’s driving distance of about half of the U.S. population, as well as a large number of boat manufacturers, Cramer notes.
The show has a contract to be in Louisville for at least three years.
“That’s not to say there aren’t some people who would prefer that we were going to be in South Florida, but we’re not going to be,” Cramer says, “We’re feeling good about where we are at the moment and can’t wait to get it open and get going.”
Larry Vandiver, director of marketing for exhibitor Suzuki, says the change in location is largely positive, providing new prospects for his company.
“We feel that the change in venue will give us an opportunity to see some Midwest builders in those areas that we haven’t seen in the past when it’s been in Florida,” he says. “At the same time, in talking to some of our Southern builders, they’ve already indicated to us they’re not going to make the trip up there. So we’re going to lose some and gain some.”
Tim Kent, marketing manager for Marinco Electrical Group, says everyone his company hopes to meet with has said they will be there.
“The people who normally go are going, even though there was a little bit of grousing last year because I think people like going to Miami,” he says. “What I think is going to happen is we’re going to see people that we don’t normally see, in addition to the people that we do normally see.”
As of mid-July, about 500 exhibitors had signed up for IBEX, which put it on par with the 2009 event with more than two months to go until the show opens, Cramer says. About 120 aftermarket companies will be at the show, Dammrich says, and about 45 to 50 of those are expected to be part of the MAATS pavilion, which is being sponsored by Soundings Trade Only.
“Louisville is in the heart of boatbuilding country, with about 80% of the boats built in this country being built within a 750-mile radius of Louisville,” Dammrich says. “We’re expecting a strong crowd, but particularly strong from the Midwest.”
With attendance at MAATS decreasing during the last few years, organizers decided that rolling it into IBEX as a component would be the best way to provide a venue for the aftermarket segment to exhibit its products.
In 2009, MAATS drew 211 exhibitors and 1,345 badge holders. That was down from 1,780 badge holders in 2008, according to the NMMA.
“To improve the efficiency of marine trade shows, the scope of IBEX needed to change,” Cramer previously said. “One trade event for OEM and aftermarket parts and accessories will create a more productive environment, reduce exhibitor costs and time and attract a broader base of attendees.”
Dammrich acknowledges that IBEX’s time frame may not be ideal for many former MAATS exhibitors, who were used to a mid-summer event.
“They may not be in the prime buying season for next year, but it’s an opportunity to make contacts, strengthen relationships, build new relationships and introduce products,” he says. “Today, with the Internet, people don’t rely solely on a twice-a-year catalog. If someone finds a new aftermarket product at IBEX, they can get it out immediately using the Internet.”
Another change that comes with the joining of MAATS and IBEX is that the National Marine Distributors Association’s S.T.E.P. purchasing event is no longer held in conjunction with MAATS. Instead, this year S.T.E.P. was held in late July outside Chicago. Nearly 300 people attended the four-day event and about 125 companies attended.
“We expect that there will be NMDA members both walking the show floor and exhibiting at IBEX, as they have done in the past. With our S.T.E.P. purchasing event just finishing, we are not sure how many distributors will actually be doing buying meetings as part of the MAATS pavilion,” says NMDA executive director Nancy Cueroni. “We have worked with the NMMA the past few months to make sure our members are aware of the availability of buyer/supplier meetings in Louisville.”
Amber McCrocklin, president of Paws Aboard, says her company used to exhibit at MAATS and will be a part of the MAATS pavilion at IBEX.
“It is important for us to attend the industry shows to allow us time to spend with current customers, as well as meeting new, future customers,” she says. “I certainly hope there will be higher attendance this year. From what I understand, they chose Louisville due to its proximity to the majority of the customer base.”
Doug Curtis, director of marketing for Dometic Marine, says the integration of the two shows is a positive step.
“It brings two segments of the industry together in one place at one time,” he says. “I am confident that IBEX in Louisville will provide a great platform from which to launch our innovative new product range to an industry that we feel is recovering.”
The National Marine Manufacturers Association (NMMA) announced today (Aug. 11) it is joining forces with Affinity Group Inc.’s (AGI) Affinity Events to produce the 81st Annual Chicago Boat, RV & Outdoors Show in 2011 in order to strengthen the depth and breadth of the RV Pavilion at the largest outdoors show in the Midwest.
“We’re pleased to partner with Affinity Events and combine our strengths in the boating and recreational vehicle industries to produce an outstanding event for Midwestern outdoorsmen,”Ben Wold, executive vice president of NMMA, stated in a news release. “Our partnership will allow the 2011 show to offer the best of both industries and will contain significantly more boating and RV product, features, events and seminars than in recent years – becoming a must-attend for both outdoor industry companies and enthusiasts.”
Affinity Events has agreed to oversee all aspects of the Chicago Boat, RV & Outdoors Show’s RV Pavilion, which will consist of more than 100,000 square feet of a number of RV models from the region’s leading RV dealers, plus exhibits of campground destinations, RV products and accessories. There will also be a variety of RV-related features, seminars and entertainment.
“We’ve worked with NMMA on several projects in the past, and we look forward to forging a strong partnership with this event,” said Steve Hedlund, president of Affinity Media & Events. “Our goal is two-fold. We intend to strengthen the value provided to RV enthusiasts in the Chicago area by leveraging our knowledge and media assets in order to bring more RVs, product, information and education to the show. Furthermore, we’ll help exhibitors connect with their target audiences by aggressively tapping into the marketing power of our affiliated companies including the Good Sam Club, MotorHome, Trailer Life and Camping Life magazines in order to bring qualified buyers to the show.”
Affinity Events, a division of Affinity Group Inc. (AGI), is the nation’s largest provider of outdoor recreation clubs, services, media and events. The company currently produces 21 RV shows throughout the United States.
The 2011 Chicago Boat, RV & Outdoors Show will take place Jan, 12 -16, 2011, at McCormick Place.
AGI is the parent company of RVBUSINESS.com.
More than 30,000 people were expected to attend the 53rd Annual Louisville (Ky.) Boat, RV & Sportshow which ended Sunday (Jan. 24) at the Kentucky Exposition Center, according to the Louisville Courier-Journal.
This year’s show seemed more packed than last year’s — in attendance and exhibits — as the economy appeared to be rebounding, said Keith Ammons, a spokesman for the show that’s hosted by the National Marine Manufacturers Association.
He said exhibitors gave buyers deals on new 2009 models that haven’t yet sold, and most people could get between 10% and 20% off.
“I don’t know if this means in the next month we’re going to have a great economy, but the turnaround has started,” he said.
Alan and Carol Schmitz agree.
The Worthington couple opened Salty Paws Marine & RV, which sells boat and RV accessories, in Fern Creek in August, Carol Schmitz said. Their booth at the show boasted a yellow 1975 Volkswagen camper bus, margarita glasses, deck chairs and “Parrothead” merchandise, along with the basic equipment needed by sport enthusiasts.
“We’ve gotten some friends who said, ‘We’re sure you’re crazy,’” Alan Schmitz said. “Other people said ‘good for you’ for doing what this economy needs.”
“We’re overwhelmed — in a good way,” Carol Schmitz said.
Exhibits included more than 300 boats and over 200 RVs.
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.
Editor’s Note: Thom Dammrich, president of the National Marine Manufacturers Association (NMMA) and current board chairman of the American Recreation Coalition (ARC), spoke this week at a National Marine Bankers Conference. The following account of his speech appeared in Soundings Trade Only e-newsletter. NMMA’s more than 1,400 member companies produce every conceivable product used by recreational boaters. An estimated 80% of marine products used in North America are produced by NMMA members. The association was formed in 1979 but traces its roots back to 1908.
Gross domestic product grew at an annualized rate of 3.5% in the third quarter,” said Thom Dammrich, president of the National Marine Manufacturers Association, Tuesday (Nov. 10) at the National Marine Bankers Association’s 30th annual conference in Hilton Head, S.C.
“That’s very positive,” Dammrich said.
In past recessions, the time lapsed between the peak in consumer confidence to the trough has been 26 to 35 months. “At the end of October, we’re in the 27th month (of depressed consumer confidence),” he said. “Sometime in the next three to eight months we’ll see consumer confidence turn up.”
Home prices rose 1.4% on a seasonally adjusted basis in the second quarter of 2009, the first increase since 2006. Auto sales are increasing over last year, as are recreational vehicle sales.
“We tend to follow the recreational vehicle industry by six months, and they started picking up in July,” Dammrich said. “We should begin to see boat product sales pick up in 2010.”
That said, Dammrich predicted dealers and manufacturers face a cold, dark winter ahead because so few boats are sold in winter.
“Some dealers and manufacturers are not going to make it,” he said.
He projects the industry will sell 135,000 boats in 2009 and about the same volume in 2010, but he says production should increase 160% to 135,000 in 2010, up from 52,000 this year.
He says manufacturers are going to have to figure out how to build for the peak selling season so dealers don’t have to carry a lot of inventory (floorplanning costs have soared.)
This will challenge both manufacturers and their suppliers. Lenders, who have tightened credit requirements to the point that many can’t qualify for loans, will have to help fuel the recovery.
“In fact, many believe the recovery of new boat sales and manufacturing will be paced by the availability of credit,” Dammrich said. “Without credit, the recovery won’t happen.”
Dammrich says manufacturers are looking for new business models: keeping dealer inventory low, selling larger models direct to the consumer, building to order, developing dealers who own more equity in their business, and cutting back boat shows from 300 to perhaps 30.
He says they are expensive and often don’t return to exhibitors a good return on investment. “We don’t need any more than 30,” he said.
“Ninety percent of boat shows need to go away.”