Used Pontoon Boats - Valley Boat Emporium Adjust to Decline in Boat Sales

Hi gang, Rick Ostler here from North American Waterway bringing you Used Pontoon Boats along with news and views from the boating industry. In July 2006, Valley Boat Emporium in Fresno sold 53 boats. In July 2008, owner Ron Monteverde says he'll be fortunate if he sells 15.

With gas prices up, home values down and the economy tanking, people aren't spending as much money on luxury items such as boats and recreational vehicles. Nationwide, boat sales have declined 30 percent over three years - with 16 percent of that this year.

In California, the number of expired boat registrations in 2008 exceeds new ones, according to officials with the Department of Motor Vehicles.

"All segments are down," said Tom Dammrich, president of the National Marine Manufacturers Association in Chicago, who relayed the figures. "The two biggest impacts have been the slump in the housing market and the decline in consumer confidence."

The biggest declines are in California and Florida, the two areas where housing prices have slid the most. That's because many families who bought boats during the real estate boom in the first half of this decade used equity from their rapidly appreciating houses, Dammrich said.

The downturn has been devastating to Valley Boat Emporium, where sales have slid as much as 70 percent from their peak, which coincided with the housing boom. This season is the worst in 32 years of business, prompting Monteverde to discount prices with a liquidation sale.

He's trying to sell excess inventory before 2009 models come out. "My goal is to get rid of product that should have sold during May, June and July," Monteverde said. The summer is typically the peak of the boat-buying season.

Monteverde said that after the sale he will then evaluate whether to stay in business.

Sellers of new boats are having to compete with boat owners selling.

Tighter lending requirements also aren't helping his efforts. One of the biggest lenders, General Electric, abruptly stopped making boat loans to consumers in June, an important month for retailers. "That really hurt," Monteverde said.

County Bank in Merced, Calif., also gave notice that it would cease boat loans.

Patrick Sayre, manager of Ron's Marine in Fresno, attributed the industry's problems to a "perfect storm" of eroding consumer confidence, declining home values and high fuel prices. A two-year drought that has significantly lowered water levels also could be contributing.

Sales are down at Ron's Marine, but Sayre said the higher incomes of his core customer base are helping his company. "The upper end is more resilient," he said.

Sona Vartanian of Pacific Marine Center Inc. in Madera, Calif., said sales are down everywhere and lenders are more picky. Many of her customers pay cash, and Pacific Marine Center benefits from a strong Web presence and long history, she said.

Vartanian, like other boat dealers, is betting on a rebound. "The economy won't stay like this," she said. "Any boat business that survives this year will come out ahead next year." Thanks to;The Modesto Bee | U.S. economy capsizes luxury