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Hi gang, Rick Ostler here from North American Waterway and Used Pontoon Boats bringing you news and views from boating industry. Boat makers say economy hasn’t had much of an impact on sales in Kosciusko County, Indiana.
Kosciusko County provides a quality of life that has been attracting people from across the country, particularly within the Midwest, for more than 100 years. At 3,400 acres, its Lake Wawasee is the largest natural lake in Indiana, and at 120 feet, its Lake Tippecanoe is the deepest in the state.
More than 100 lakes carved by ancient glaciers attract boating, fishing and water recreation enthusiasts to the county, and have helped it develop a business cluster that has become important to the area’s economic development.
The boat manufacturers, boat dealers and marinas pay taxes and provide good employment for permanent residents. And Joy McCarthy-Sessing, president of Kosciusko Development Inc., said the lakes attract a large influx of weekend visitors each summer to resorts and second homes on their shores.
In addition to the money they spend on upscale lakeside housing, the visitors have “a great impact on our economy because they buy food, they buy gas and they go to the restaurants here,” she said.
Syracuse is at the northwest corner of Lake Wawasee, and employees at Joe’s Ice Cream Supreme on South Huntington Road notice the impact of regulars who show up every year for the area’s lake life.
Joe’s has a coffee-shop business, which keeps it open year-round, but the pace picks up when the lakes get busy, said Haleigh McKee, who works there. “It gets a lot busier on weekends,” she said.
Not far from Joe’s on the same street is Pine Crest Marine, which is among the county’s larger new boat dealers. It recently began selling products made by Rinker Boat Co., which Kosciusko Development lists as the largest employer in Syracuse, with a work force of 525.
Chip Erwin, general manager for Pine Crest, said there are at least seven new boat dealers in the county, and “all the dealers are very good within their communities, as far as being active.”
Erwin said he has been very involved with the Syracuse Chamber of Commerce and supports its efforts “to get new business here.”
Most marinas in the county don’t participate in boat shows beyond the one held each year at Allen County War Memorial Coliseum in Fort Wayne, but Pine Crest has multiple locations and typically participates in at least four annual boat shows.
Sales at the shows haven’t been as good this year as they have been in the recent past, partly because the economy is slowing and gas prices are rising, Erwin said. This May was cooler than usual, which also has dampened spring sales.
“The extremely high-end stuff is still selling,” he said. “Boat people who have quite a bit of discretionary income are still buying. But folks who work at (area) factories … are saying, ‘It might be a little tough this year. We’d better wait and see.’”
Some customers who ordinarily would be trading in a boat for a new model “may keep their boats another year,” he said.
And in the entry-level market, “first-time boat buyers might be staying away this year,” he said.
“This business is cyclical, just like the car business, and this could be one of those years where things have to straighten themselves out a little bit.”
In another comparison with auto retailing, Erwin said dealers might become a little more aggressive and willing to hold the line on pricing, particularly on last year’s inventory.
“Some dealers may look at doing some things that may only have been done at boat shows in the past,” he said.
“I don’t want people to think they can come in and get a steal, but I would say there’s deals to be had this year that may not arise every year. It could be a good time to buy a boat.
Pine Crest saw the cyclical nature of the industry as an opportunity to start a boat detailing and reconditioning business this year, which Erwin said is doing well.
“We’re going to do some facility upgrades. We’re going to do some interior improvements in our showroom. We’re going to put some expenditures out there and possibly build a second building for storage. We’re not hunkering down. We’re not believing in all the doom and gloom,” he said.
The National Marine Manufacturers Association reports boating participation increased by 10 percent to include 59.1 million individuals in 2007, which the industry hopes will help make this summer a busy season on the water despite rising fuel prices.
A portion of the research, conducted by Michigan State University’s Recreational Marine Research Center, examined the boating habits of 2,400 boaters and found 1 percent of boat owners did not plan to use their boat in 2008 due to the high cost of fuel.
The study also found 3 percent of owners did not take their boat out in 2007 due to the high cost of fuel. In addition, the study showed boaters used their boats as often as ever, with the average usage in 2007 remaining steady with the past three years at about 33 days, or 16 weekends.
“Rising fuel costs have certainly shifted boater habits, causing them to take shorter trips or reduce their cruising speeds, but we expect boaters’ passion for the lifestyle to continue to lead them to the water this summer,” said Thom Dammrich, president of the NMMA, in a statement.
Additional findings from the group’s 2007 Recreational Boating Statistical Abstract indicated more than $37.5 billion was generated in boating sales and services in 2007, a decrease of 5 percent from 2006.
“The soft economy and weakening housing market have clearly had an impact on our industry in terms of new boat sales, but we’re seeing manufacturers adapt to changes in the economic landscape to help position the industry for growth by creating some of the most innovative products we’ve seen in decades,” Dammrich said.
“Hybrid boats, more efficient engines and technology such as joystick docking, which drastically improves the ease of maneuvering a boat, are bringing new and exciting options for boat buyers who will be ready to make a purchase once the economy improves.”
At Kosciusko County’s Lake Tippecanoe, George Paton said higher fuel prices haven’t slowed down boating in the area very much when the weather has been good.
Paton is manager and co-owner of Patona Bay, which owns Patona Bay Boat Sales & Service and Patona Bay Marina & Resort.
For visitors who have rented a cottage or parked a recreational vehicle at the lake and intend to go boating, “the price of gas is going to be a little bit of an obstacle, but it’s not going to stop you from enjoying yourself,” he said.
“People aren’t going to just go park their boats because the fuel is $4 a gallon.”
The company has an RV park and campgrounds on the lake, and rents cottages and slips there.
“Our reservations for cottages and so on in the main part of summer is about he same as always,” Paton said.
Paton expects to see some business impact from the economic slowdown, but not much. He reports the marina’s new and used boat sales have been holding up pretty well, and business has been good for its service department.
He said Kosciusko County is a good place to shop for a boat because “it’s no news that in this area there’s lot of marine dealers. It’s not uncommon to visit two or three or four of them when looking for a boat.”
He expects marinas to use fuel efficiency as a selling point for new boats this year.
“The industry in general has been moving to more fuel-efficient engines,” said Larry Baumgardt, national sales manager for JC Manufacturing, which employs about 60 at its North Webster plant that makes pontoon boats.
“The outboard engines we offer today are much more fuel efficient than they were five years ago, mostly due to the four-stroke technology in most of the engines,” he said.
About 10 to 15 years ago, it was more common to find boat engines using the kind of two-stroke technology typical of engines in lawnmowers and chain saws, he said.
The marine industry moved to the four-stroke technology found in automotive engines because it was quieter, more reliable and more fuel efficient.
The marine industry has model years like the auto industry, and its manufacturers like to continually upgrade their products, he said.
Last year, JC Manufacturing completely redid its midpriced boats. This year’s models feature new interiors and a powder coating for the rail pack, which is durable and gives the rails a clean, distinctive look.
The company also more than doubled the size of its fuel tanks, which previously had a 25-gallon capacity.
Partly because it serves a high-end market with more discretionary income, “we’re still in full production, working five days a week and a lot of times we’re working on Saturdays, so we’re doing just fine,” Baumgardt said.
“We’re going to have an all-right year, but it’s not going to be a record-breaking year,” he said, adding, “I think it will be a challenging year for the industry.”
Splendor Boats near Silver Lake expects its sales to be down substantially this year, partly because it bucked industry trends and saw record sales last year, said Cameron Steiner, sales manager. The company employs a dozen workers who custom build catamaran deck boats.
Last year, “we had new ownership and had very innovative product. And our catamarans were just really picking up steam,” he said.
“This year, because of the gas and housing crisis, it could go on the books as one of our toughest years.”
But Steiner said he expects to see sales improving for the company next year, partly as a result of a product the company is developing, which it expects to attract newcomers to boating.
“There’s a whole different segment of boaters other than pleasure boaters and fisherman, and (reaching them with the new product) will be neat,” he said. “It could be out later this year or early next year.”
Used Pontoon Boats, By Rick Ostler
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