These are tough, painful and challenging times for our industry. While many of us continue to make cuts, scale back and essentially hang on for the long, bumpy ride, we are at the same time reinventing our businesses. How many of those changes will carry over into the post-recession world is difficult to say - but rest assured, things will not return to the "way they were" anytime soon. Production schedules, work force issues, model-year timing, inventory levels, financing and much more are being scrutinized as businesses look ahead to a changed landscape and a changed consumer.
There's no way around the fact that we are going to get smaller. Smarter, more efficient, healthier, we hope, but smaller. Fewer builders and dealers. Fewer boats built and sold until the economy gets itself righted, the credit markets loosen, the consumer starts to breathe more easily again, and demand rises. That's not happening tomorrow, but it will happen.
This month in Trade Only, we examine some of the changes being discussed in our special report "A new boatbuilding universe evolving," which begins on the front page. Change seems to permeate most discussions these days, and it certainly made its way into many of the stories in this issue.
For a glimpse of some of the trends and initiatives developing, I recommend reading our Q&A with Dan Streech of Nordhavn trawler builder Pacific Asian Enterprises (Page 8); our story on Web strategies (Page 16); our special on fuel efficiency (Page 20); and a look at AGYG's acquisition of boatbuilder Southport Boat Works (Page 26). One common theme emerges: "It's going to be a different ballgame," says industry veteran Frank Longino of Southport. "Structurally, we're going to see some real differences coming out of this downturn."
While it's true that a rising tide lifts all boats, not every segment of our highly niched industry will recover at the same pace. They never do. Recovery among boating consumers will vary by age, income, savings, education, occupation, region, boating experience, boat type (trawler, express cruiser, aluminum fishing boat, houseboat, etc.), boating activity (wakeboarding, coastal saltwater fishing, cruising, and so on), and a host of other factors.
In June, I attended the Trawler Fest show on Long Island in Greenport, N.Y., where I spoke with builders and dealers whose boats appeal to a large degree to baby boomers - a demographic I continue to believe will be crucial to the growth of the industry as we pull out of the current mess.
Born between 1946 and 1964, the boomers represent the largest generation in our history - more than 76 million strong. And they have (or will have again) the money, desire and time to move the recreational boating dial like no other group. Even in the midst of the recession, they have more disposable income than any previous generation.
"They may modify the dream, but the dream is still there," says Reuben Trane, president of boatbuilder Island Pilot. "They're going to do it."
Trane is one who believes the boomers will help pull the sled once the economy stabilizes and consumer confidence returns. "The demographic still favors us," he says. "And I think the retirement cruising products are going to do OK."
Again, they may scale back their plans and even downsize their boats some to fit the new world, but passionate boaters - regardless of their stripes - aren't going away.
"People are not going to give up boating," says Bruce Perkins, sales manager for Ranger Tugs, based in Kent, Wash. "But they're re-evaluating how they're doing it."
In this market, Perkins says potential customers are looking for value and strong resale. "A lot of people are looking at downsizing," he says. "They're looking to curb their costs. They're looking at fuel economy, even though it's not $4 or $5 a gallon anymore. ... People are seeing the advantages of a smaller boat."
And, Perkins adds, "We're definitely in the right niche."
Time will tell which segments will do well moving forward, but it is clear that the ground is shifting. "Bigger is better" is giving way, at least in some quarters, to a "back-to-basics" mindset among boaters (more on that in a future issue). As Trane put it: "I think there's a chance for more modest boats to take more market share."
The recipe for success in the smaller world that lies ahead will include the following elements: a bold entrepreneurial spirit, quality products, strong service, passion, hard work and energy - a little bit of luck and a lot of smarts. As always, easier said than done.
This article originally appeared in the August 2009 issue.