Report eyes pent-up demand after cool spring

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Growth of new boat registrations is down in all categories for the three-month period from February to April, according to new Bellwether data from Florida-based Info-Link Technologies.

But Info-Link co-owner Jesse Wells says looking at three-month rolling averages can be tricky when considering months that traditionally see fewer sales, such as February, March and April, since the numbers are smaller to begin with and therefore more easily skewed.

“I don’t know how much I’d read into it. Looking at the three-month average, especially in the wintertime [and early spring] when numbers are so small, it can be up or down pretty easily,” Wells told Trade Only Today. “We’re hearing it’s weather-related. We don’t know, but it’s going to be interesting to see what this looks like in May and June, which are huge months, because if it is weather-related and there’s pent-up demand we’ll see that effect in the next few months if we’re ever going to see it.”

Wells said Info-Link puts more emphasis on 12-month rolling averages since there is less seasonality in those numbers. By that measure there is still growth across most segments, but it’s less occurring less rapidly than the previous year’s growth.

“We’re still on track,” Wells said. “I suppose if it were to continue heading down toward the zero [growth] mark we’d just be flat, relative to last year. So I think what we’re talking about is the growth rate is accelerating at a decreasing rate. Anything above that zero point means they’re selling more units this year than last.”

Info-Link numbers showed that boat sales grew at a 10 percent faster rate in 2012 than in 2011, Wells said. “We’re almost at half that now. How’s it going to end up? I wouldn’t be at all surprised if we see a little rally.”

It wasn’t just lousy weather that affected sales, although that weather played a large role, according to National Marine Manufacturers Association president Thom Dammrich.

“I think the springtime slowdown is attributable largely to a cold spring throughout much of the country,” Dammrich told Trade Only. “Consumer confidence was down a little during this period, too. But I think it is mostly weather-related. The next few months will tell the tale.”

Weather was the oft-cited culprit in quarterly earnings calls with investors and analysts in April.

MarineMax CEO Bill McGill told analysts that chilly weather “gave rise to truly bifurcated results in our sales and even more significantly to our earnings.”

“Like all of our teams around the country, our teams in the Northeast and Midwest work very hard to create excitement for boating during the quarter, but normal spring weather has not come on time, and as a result our normal spring launch is definitely behind previous years in those regions,” McGill said during the conference call.

The persistence of cold, blustery weather in the Midwest and northern regions of the country — on top of the lingering effects of Hurricane Sandy — depressed sales and margins during the March quarter, McGill said.

Brunswick Corp. CEO Dustan McCoy also said sales compared unfavorably between this year’s cooler-than-average late winter and early spring when stacked against last year’s warmer-than-usual late winter and early spring.

“Although we’re always reluctant to cite weather as a factor, we believe warmer-than-normal temperatures that occurred in the first quarter of 2012, combined with colder-than-normal conditions in this year’s first quarter for the eastern two-thirds of the United States, contributed to the declines experienced thus far,” McCoy told analysts. “In other words, we believe that retail sales occurred earlier last year, and this year they remain potentially deferred to later months.”

— Reagan Haynes

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Comments

5 comments on “Report eyes pent-up demand after cool spring

  1. Bottom Gun

    That and fuel prices…Rec (non ethanol) gas over $4 a gallon, Diesel at $ 4 gallon…. A day on the water is a big commitment. Those Island trips and multi-day cruises….fond memories Man……

  2. GTO PATRIOT

    We’re entering a “new norm” in the destiny of our country and the world for that matter. The economy has created basicly two classes of people; the have’s and have nots. A strong middle class is rapidly going out of existence, much through the efforts of government. Cost is a major factor determining the growth of “boating”. Been to a boat show lately? The cost of anything new is off the charts. No wonder boat sales are through the floor. I believe the biggest problem facing the industry is one I’ve never heard addressed. Maybe because the industry is run by the “old school” that really don’t get it. The latest generations of buyers that the industry relies on for growth couldn’t care less about boating. They love social media and given a choice would choose to play with their electronic media gadjets than do anything else; and I really mean “do anything else”. Open your eyes.
    Until the industry figures out a way to get these young’ins interested in something other than media the industry isn’t going anywhere

  3. Jim

    Marine industry is stuck in a time that does not exist anymore. Dealers don’t get the internet, they don’t want to learn new ways, they don’t think out of the box, the industry association has no horsepower to get anything going because the manufacturers think the dealer is the end of the sales chain for them and don’t see the need to contribute to a branding of boating.

    Sales are way down and barely moving up, yet the RV industry with a strong association and manufacturing that is not quite as self centered has had extremely good growth over the last 2 1/2 years. They have worked hard to understand the consumer and the value proposition.

    How is it RV can grow so well, up 11% in the first quarter, yet boating is down in the first quarter? RV 2012 growth was 13.2%, Marine was propped up by aluminum, otherwise another negative year..

    Until the Marine industry wraps it’s head around the new consumer, we are a dying industry. Embrace the internet, embrace the smarter customer looking for value and a fair deal. Give them reasons to boat.
    Like another poster pointed out, consumers have a ton of choices that do not require the time and commitment that boating does with just as much satisfaction and less expense.

  4. sunshine state

    I have been involved with the introduction of two brands and various models. Some product offerings were a clearly predicted flop,thanks to basic feature and design flaws.Massive waste of time and effort,dashed opportunity.

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