Volvo Penta will expand Seven Marine outboard offerings

Posted on Written by Reagan Haynes

People should expect to see an expansion of the outboards offered by Seven Marine following its acquisition by Volvo Penta, although the companies did not say whether that meant moving into lower-horsepower engines.

Volvo Penta, which has long reinforced its commitment to its sterndrive market since exiting the outboard segment in 1979, announced the agreement on Thursday, declining to disclose the terms of the transaction when it briefed the press about the move.

The companies are “on a journey to … shape the future of the outboard industry,” Volvo Penta president Björn Ingemanson said during a conference call with reporters.

The company would not specify how the offerings would expand — Seven Marine makes 557-hp and 627-hp engines — when asked during the press call on Thursday whether the company will start to build smaller engines.

“This is about Volvo Penta getting into the outboard segment in a big way,” Volvo Penta of the Americas president Ron Huibers said. “As we’ve indicated, this is a platform for us to scale up and down, regardless of the energy source. So … the short answer is yes, you should expect that we would be expanding it.”

Volvo Penta exited its marine outboard business in 1979.

Leveraging Volvo Penta’s distribution and service network

Seven Marine will benefit from leveraging the extensive Volvo Penta service and distribution network for the outboard engines, both companies said. To date, Seven Marine engines have been distributed through OEM customers for new installations and authorized service centers for repower applications.

“I think we all know that [in] this industry … we see dealers that carry multiple brands,” Huibers said in response to Trade Only Today’s question about Volvo Penta dealers who might carry competing outboard brands.

“We as a company like to earn our way to being the preferred supplier and the preferred best business partner. We don’t see a conflict there within carrying those lines; we compete every day, and competition is a good thing.”

As the companies move into 2017, they want to bring products and offerings that customers demand, Huibers said.

“We’re going to compete head on and the distribution network will be key,” Huibers said. “We’re going to count on our partners, we’re going to bring to them a business case that makes them want to do that, and we think that’s how we’ll win in the marketplace.”

The companies will work together on how they map out a collaborative approach to distribution in the best way for the marketplace, Huibers said.

“It is going to be a step-wise approach, but we also want to keep the uniqueness of Seven,” Huibers said. “We have good partners, good relationships, and it’s known that people can count on and trust us and we’ll be doing this in a good and collaborative way.”

Direct line to customers

Customers at boat shows have been asking when Seven will start distributing its engines more widely and broaden its service network, said Seven Marine co-founder Rick Davis, who will remain as the company’s president and CEO.

“Right now we do sell directly from Seven Marine as OEMs,” Davis said. “We show them at marine shows. We also have a direct line to our customers, and we’ll be working together with Volvo to look at, how do we broaden that base?”

“We see this as a great opportunity to then answer that question, as well as joining with the strength of the business of Volvo Penta,” Davis said. “It’s a great opportunity that satisfies the need the customers have been asking us for.”

Seven’s current boatbuilding partners were “delighted” by the announcement, Davis said. “This is something they anticipated, something they wanted to see, and they’re certainly very happy with this new joining together with Volvo Penta.”

The deal helps the company evolve into the future with “longevity in mind,” Davis said.

A key component of the transaction was the good chemistry between Volvo Penta and Seven Marine regarding customers, Davis said.

“We take customers very seriously, and satisfying our customers in a way that enhances their overall marine experience,” Davis said. “Not only will that continue, the synergies between the companies can enhance that.”

Ties to automotive

The companies will also leverage their automotive industry backgrounds, Ingemanson said, when asked whether Volvo Penta and Seven Marine expected to expand beyond internal combustion engines.

“Nothing is impossible for us going forward,” Ingemanson said. “We are in a developing world. We already know we see electrification coming into this industry as well. The automotive industry is leading that. Of course we are following that market and who knows what we will see in the future? We will be ready when the market is ready to offer those kinds of solutions.”

The use of automotive technology is a common aspect between Volvo Penta’s gasoline sterndrive range and Seven Marine’s outboard motors. Seven Marine’s approach to exploring new techniques and design architecture is a key driver behind Volvo Penta’s decision to become the majority owner of Seven Marine, the company said.

Manufacturing operations for Seven Marine engines, which have the largest output in the marine industry to date at 557 hp and 627 hp, will remain in Germantown, Wis.

That horsepower enables the company to power larger boats, which have increased in popularity, Huibers said. (They are also not cheap; in 2015, Trade Only reported that the 557 cost $79,590 and the new 627 was priced at $89,685.)

“Seven Marine brought innovation to the outboard industry by asking what’s new and what’s next,” Davis said. “We were the first to break the 500-horsepower barrier, and then we were first to break the 600 barrier.”

In order to realize what’s next, “we needed a strong, innovative partner that’s well established in the marine industry, that we could team up with and together expand the platform,” Davis said. “The basic technology platform lends itself to being expanded in both directions. Now we’re able to proceed to do that together. That’s what’s exciting here.”

A young company’s history

Seven Marine was founded in 2010 by a team of engineers and technicians with more than 85 years of combined experience.

Davis, who has 40 years of experience alone, was instrumental in developing Mercury’s Optimax Clean 2-cycle engines; Mercury’s Verado four-stroke engines; and Cummins-MerCruiser Diesel Zeus inboard pod drive.

The company has emphasized that its engines are not limited-edition. “Our motor is a production motor, makes rated power on 89 octane and is targeted for big-boat [owners] that want performance and luxury combined,” Davis’ son Brian, vice president of operations and finance, told Trade Only in 2015.

The company’s small block V8 engines are fitted horizontally and leverage modern automotive technology. This includes the use of fresh-water cooling for enhanced durability and corrosion protection and a supercharger to produce optimal performance.

The companies said the deal will broaden Volvo Penta’s technology platform, offering a “modular, cutting-edge solution, regardless of the energy source, to deliver the desired power in the water.”

“The Seven Marine concept mirrors the successful strategy we have followed in pursuing automotive technology,” Ingemanson said. “Just as we are a leader in diesel and gasoline engine technology, Seven Marine leads its market for state-of-the-art outboards. We will move forward in leading the development of world-class performance and sustainability for the most premium of outboard motor segments.”

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