Dealer sentiment ticks into neutral territory

Political climate, election year, and inventory concerns pose challenges.
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Only 2 percent of dealers said inventory was too low.

Only 2 percent of dealers said inventory was too low.

More marine dealers, 34 percent, are predicting winter boat shows will be weaker than last year, versus the 23 percent that believe they will be stronger.

Most of the 67 dealers responding to a survey — 43 percent — believe the winter shows will be about on par with last year, though several said they find it difficult to make predictions, given the mixed economic and political indicators.

“Trying to peg where sales will be next year is difficult,” said one dealer responding to the monthly Pulse Report survey, conducted by Baird Research in conjunction with the Marine Retailers Association of the Americas and Soundings Trade Only. “A lot of mixed news out there right now.”

Sixty-eight of the dealers who responded said inventory was too high, versus 2 percent who thought it was too low; 44 percent reported retail declines in October, compared to 33 percent that saw growth for the month.

Dealer sentiment ticked up into neutral territory after spending months below. Sentiment on current conditions was 52 in October, and the three- to five-year outlook increased to 51, versus 49 and 43 in September, respectively.

Government action/inaction was by far the largest headwind cited by dealers, though some said weather had created the largest negative impact on business.

One dealer said they are “concerned that the upheaval in D.C. will create hesitancy in the market,’ and another commented: “If we could quiet the rhetoric and the politics, things would definitely be better.”

Dealers said new products and promotions were helping them work though inventory, though dealer commentary was scattered about the effectiveness of manufacturer incentive programs.

“Promotions are having less impact,” said one dealer. “New-boat sales are getting tougher. Manufacturers pushing hard for dealers to take 2020 inventory and don't want to slow down their production.”

Another said year-end rebates were working for his dealership.

Geography and segment seemed to play a role in this month’s responses, with comments varying on most topics.

A handful of dealers said October conditions were terrible compared with early fall and October 2018; another commented that sales were stronger than last October but that customers still showed no signs of urgency.

One retailer suggested the inventory concerns were indicative of a broader issue. “Inventory levels look to be in excess in many areas of the country, and this excess in inventory does not seem limited to just recreation segment.”