Dealer sentiment drops back into negative territory

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Dealer sentiment on current and long-term conditions worsened in November, dropping back into negative territory after moving into the neutral range in October, according to a new survey.

The three- to five-year outlook decreased from 51 in October to 41 in November, and the current sentiment dropped from 52 in October to 41, according to a Pulse Report survey administered by Baird Equity Research, in conjunction with the Marine Retailers Association of the Americas and Trade Only Today.

"Industry should be cautious for next 12 months, much like watching the market and elections,” wrote one of the 81 respondents to the survey.

Dealer commentary again varied widely depending on geography, size and segment. Several reported strong boat-show sales, while others said shows had not been as productive as in the past. Some mentioned promotions and new technology were spurring sales, while others said sales had been flat regardless of products, events and promotions.

“Customer events, clubs, in store boat shows and previews, rebates, promotions by manufacturers,” wrote one dealer.

“Manufacturer incentives, fall show specials, new technology — Nautic-On, engines, etcetera,” wrote another when asked what’s working for business.

"Promotions are pretty worthless at this point,” commented one at the other end of the spectrum. “New boat sales have slowed dramatically, used boats sales are flat, seasonal service is same as last year. Potential buyers are mostly lookers.”

“Believing the stock market is an indicator of the current retail marine marketplace has to be a reality that exists in some area of the country that I do not reside,” commented a fourth.

Affordability and workforce concerns were cited by several dealer respondents.

“Nobody builds a good entry-level boat anymore,” commented one.

Others listed offering smaller, more affordable boats as examples of what’s not working.

Several said they were still struggling to fill service positions.

“Unemployment rate being so low is making it extremely hard to find workers,” wrote one dealer. “I feel the larger companies have an advantage because they have the payroll to hire better employees.”

Another said his business had been short a service technician for over a year, adding: “Cannot find this skill in our market.”

Several mentioned pontoons, ski and wake boats, and new technology as examples of things that were working.

“New product, economy, and the extended weather,” wrote one in the “what’s working” comment section.

Many said they felt inventory was too high — 80 percent — versus 3 percent who thought it was too low.

Stronger-than-expected fall retail sales somewhat offset sluggish sales in early summer — attributed largely to bad weather — but moving into slower-selling months will mean dealers remain focused on working through inventory into 2020, wrote Baird in the report.

“We expect manufacturers to continue limiting shipments in Q4 in order to manage channel inventory, as off-season retail activity limits dealer sell-through,” said the report. “Still, the boat market is very fragmented, so retail trends and inventory positioning may vary widely by brand.”

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