marine industry professionals
A new boatbuilding universe evolving
Written by Reagan Haynes
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In this depressed marine sales environment, manufacturers are making systemic overhauls to the way they build boats. The changes are affecting everything from where boats and engines are built to how they are built and sold. Some of the changes will be permanent, while others will linger long after the economy recovers, many believe.
Dealers could see significant changes in the way they do business, such as greater use of catalogs and Web sites, a trend toward smaller showrooms, and boats with fewer options and pushed-back model years.
"There's a huge benefit to a new production model, and it's all about the depths of the decline and the steepness of the rise," says Stephen Wolpert, vice president of global boat operations for Brunswick Corp., the world's largest boatbuilder. "When retail demand changes, the more inventory you have in the system, the more drastic the changes."
When demand drops by one boat, manufacturers should respond by building two fewer boats, says Wolpert. Such a business model bases manufacturing volume on consumer orders rather than dealer orders, and enables the industry to respond more quickly to sharp increases or decreases in demand.
"Once we get the excess inventory out of the system, we're never going to put it back, or not to the level that it's at," Wolpert says.
While manufacturers are dealing in entirely different ways with the sharp falloff in demand, there is one constant: Production is down just about everywhere. Retail sales are off around 50 percent, and a backlog of inventory is forcing dealers to scramble to unload model-year 2008, 2007 and even 2006 boats. Factories have furloughed workers and, in some cases, halted production for the foreseeable future - among them such established brands as Hatteras and Sea Ray.
Increasingly, manufacturers are pushing back rollout dates for 2010 models and trying to build more to order, in a way the boating industry hasn't seen in decades. The new model might benefit the industry in some ways, such as curtailing the excess inventory dealers have to slough off in tough times. But it also presents challenges to manufacturers who find themselves building more sporadically, at the risk of losing skilled workers and operating at a fraction of capacity during part of the year.
