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Dealers Say Tariffs are Top Legislative Priority in 2019

Extreme weather and government actions created a drag on February sales

Forty-four percent of marine dealers point to tariffs and trade as their largest legislative priorities for 2019, according to a new survey, beating out issues including E15 — notably the highest priority among manufacturers, a separate survey shows.

Dealers responding to the Pulse Report, administered by Baird Research in conjunction with the Marine Retailers Association of the Americas and Soundings Trade Only, rate tariffs above workforce development, invasive aquatic species, E15, fishing access and infrastructure.

“Customer commitment is the challenge,” writes one dealer. “Really cold weather, the government shutdown, trade talks, and just a general feeling of the unknown seem to be impacting decision making.”

Another references “two to three price increases in a year, out-pricing the consumer.” Several manufacturers reported off-cycle price increases to help absorb higher costs due to the tariffs.

The second-most important issue that dealers think Congress should address this year is workforce development. Twenty-seven percent said it is their top priority for the year.

“Staffing is always a challenge; the cost of every employee is getting out of control,” writes one respondent.

Trailing those issues are E15 (13 percent), aquatic invasive species (9 percent), fishing access (5 percent) and infrastructure (2 percent).

Dealer sentiment about market conditions rose to 67 in February. While much higher than January, which measured 53, the rating is still historically low. In February 2018, the dealer sentiment rating was 79.

Dealers list extreme weather and government action or inaction as things creating headwinds, while the economy, new products, trade-in activity, OEM promotions and access to credit all positively affected February sales.

“Government shutdown created uncertainty,” writes one respondent to the survey.

“February was much colder with a lot more snow than average,” writes another. “The weather really slowed down business in all departments.”

The long-term outlook also returned to above neutral — 56 versus 44 in January — yet that number is also significantly lower than the 70 rating in February 2018.

“An awful lot of new boat buyers have been taken out of the market,” says one dealer. “Be careful with new boat inventory through remainder of year.”

“Watch your inventory!!!” cautions another retailer. “The RV business has a glut of units sitting at dealers. Everyone was expecting last year to be another growth year in RV and it didn’t meet expectations. Now dealers are sitting heavy in inventory. I think there’s a good chance this could happen in marine this year.”

Production snags also continue to plague some dealers.

“If I’m looking to restock boats that are sold, we are already looking at 2020 model year and this is February,” writes one dealer.

“Our checks suggest marine trends remained positive in February, with no breakout or slowdown,” writes Baird analyst Craig Kennison in an overview. “Dealers remain cautious with inventory as the off-season comes to a close; March is the first seasonally-relevant month at 10 percent of annual sales. Encouragingly, dealer sentiment jumped in February, recovering from a negative trend. Net, our checks leave us comfortable with our marine outlook.”

This article originally appeared in the April 2019 issue.



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