Hi gang, Rick here from Used Pontoon Boats. Nervous consumers, tightened credit are weighing down the boating industry. A sluggish economy could leave many boat buyers waiting at the dock of winter boat shows this year.
On Monday, the Chicago-based National Marine Manufacturers Association reported that wholesale shipments of powerboats were down about 14% in 2007 - the second consecutive year of depressed shipments.
Sales of boats under 30 feet in length have been hit hard, partly because entry-level boaters are nervous about the economy and also because lenders have tightened credit policies.
Nationally, powerboat sales are expected to be flat this year, at best, or down about 10% if the economy slips into a recession.
"What continues to challenge us is the slump in the housing market" and its effect on the overall economy, said association President Tom Dammrich.
In Wisconsin, boating is big business. Besides having marine-engine manufacturers such as Mercury Marine, Johnson and Evinrude, the state has dozens of small boat-builders and more than 610,000 registered boats.
Several Wisconsin boat dealerships have gone out of business in recent months, and there's been pressure on dealers to sell their remaining 2007 inventory before spring.
The winter boat shows, which run throughout the state almost every weekend until spring, will be a test of consumer sentiment.
Some watercraft sales have been down for three or more years, dealers say.
"It's probably the longest downturn in the business that I have seen," said John Johnson, a custom boat builder from Iola.
Johnson has carved a business niche with specialty boats aimed at consumers who are more than casual boaters.
His product line includes a 20-foot ski boat with three 250-horsepower outboard engines. The $60,000 boat is popular with waterskiing teams. It probably could handle three 300-horsepower outboards, Johnson said.
The ski boat can go from zero to more than 70 mph in just a few seconds and has tons of power for pulling multiple skiers.
"People who are serious about waterskiing know what this boat does," Johnson said, and they're not likely to be scared away by the price or the downturn in the economy.
Weather slows '07 season
The 2007 boating season got off to a slow start largely because of poor weather across much of the country. Brunswick Corp., the world's biggest recreational-boat maker and Mercury Marine's parent, reported a 6% drop in annual boat sales - its first decrease since 2001.
"As we enter 2008, the picture remains cloudy. We are early into the boat show season, and there is no clear message," Dustan McCoy, Brunswick chairman and CEO, said in a recent conference call with analysts.
Production of some key Brunswick fiberglass boat brands was down more than 20% in the company's most recent fiscal quarter, compared with the same period a year earlier.
"In the context of the overall slowing of retail growth in the United States, by any measure 2007 was a difficult year," McCoy said.
Sales of boats 50 feet and more in length haven't been harmed by the slowdown in consumer spending, largely because those buyers aren't lacking cash or credit.
Sales of high-end pontoon boats have done well, said Aarn Rosen with Statistical Surveys Inc. in Grand Rapids, Mich., which collects data on the marine and recreational-vehicle industries.
"I don't know why that's the case with pontoon boats, but there may be fewer entry-level buyers," Rosen said.
Sales of jet boats also have done fairly well, though it's a niche market compared with the large number of other recreational boats sold in the U.S.
"Every segment of boating has slices with a little happiness," Rosen said.
But sales of bass boats and mid-range sport boats have been clobbered by weakened consumer confidence.
"I don't think that manufacturers are passing on many price increases now. Everyone is sharpening their pencil and being very aggressive because they don't want to lose a sale," Rosen said.
The average pleasure-boat owner in the U.S. is 48 years old and has an annual income of $71,000, according to marine industry statistics.
Cuts in interest rates could provide a boost to consumer spending and bring buyers to the boat shows, said Dammrich, of the manufacturers association.
"It will take a strengthening of consumer confidence, lower interest rates, a bottoming of the housing market and a growing economy" to turn things around, he said. Thanks to RICK BARRETT, journalsentinel.com
Used Pontoon Boats, By Rick Ostler
Used Pontoon Boats-North American Waterway
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