Buying Frenzy Leads to Inventory Shortage

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Pulse--August-Sentiment

Marine dealers say interest and sales of new boats remained strong in August, but said lack of inventory created a headwind to retail activity.

“August would have been much better if we had more inventory,” wrote one of 86 dealer respondents to the Pulse Report, a survey by Baird Research that gauges monthly market conditions. “The inventory that we were getting was getting sold before we could even unload it."

Components were also creating challenges for dealers.

“Resupply of boats, motors and trailers,” wrote another respondent, when asked what is not working for business. “Our suppliers can’t produce to match demand. And this will carry over into 2021. Indeed, one of our boat lines will not get us new boats until March 2021. A year that started with doubt and anxiety ended with a total wipeout of inventory -- it was crazy.”

Eighty-two percent of dealers reported that new boat inventory was too low, and 89 percent said used boat inventory remains extremely lean and near record lows, according to the survey that is administered in conjunction with the Marine Retailers Association of the Americas and Trade Only Today.

Dealers also grew more concerned about the pandemic’s long-term potential fallout, as well as the upcoming presidential election; dealer sentiment on current conditions edged down to 87 from its record 91 in July.

"Still worried about what happens with the virus and with our political situations in the country and in our area,” wrote one dealer. “These are bound to cause further anxiety in our industry for the upcoming months and perhaps years.”

The three- to five-year outlook dropped from 65 in July to 59 as several expressed concern about new boaters staying in the recreation.

"I am being a bit conservative with my orders going forward when it comes to new boat inventory,” remarked one dealer. “My thoughts are that the next year or two, the market is going to get flooded with boats from those new boaters that did not know what they were getting into or got financed and cannot make the payments. This will, however, create opportunities to buy pre-owned boats at great prices."

“Waiting for the other shoe to drop on the economy and when new buyers realize they have to store and maintain their Covid boat,” said another.

One Florida dealer said he was already seeing new buyers struggle with the cost and lack of availability of storage.

“I’m very afraid the industry is going to blow the opportunity with new boat owners from this boat buying frenzy,” wrote another. “We are in by very poor support from vendors. Dealers are doing the best they can with the cards dealt by vendors.”

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