Skip to main content

Inventory, Interest Rates and Stock Market Create Drag

Dealers are more pessimistic than ever about business and the industry’s long-term outlook. Sentiment was around neutral on current conditions, 55 out of 100, and the 3- to 5-year outlook dropped into the red for the first time in the Pulse Report survey’s history. Baird launched the survey with the Marine Retailers Association of the Americas in 2013.

“With the stock market gyrating like a Hula doll on the dash of a Yugo with a bent wheel, it appears the money guys are not sure where the economy is headed,” said one respondent. “As I travel around and see the RV and marine retailers lots overflowing with new product, it appears the dealers were more optimistic about the economy than what the consumer is feeling. The summer of 2019 cannot come soon enough, or maybe when it gets here, we will wish it had not. The suspense will end soon.”

The volatile stock market took some potential buyers out of the market, said one dealer, adding that a customer “who went cold” said, “I could have bought two of these boats with what I’ve lost in the market drop.”

Other retailers remain more optimistic about 2019. “The December stock market fluctuation has created a loss of confidence in the economy,” said one dealer. “Most other indicators are still strong. This is no time to panic. Stay the course. We don’t need any self-fulfilling prophesies.”

“It’s not all gloom and doom for the marine industry,” said another. “As more boomers retire, they want their grandchildren to experience the joys that boating offers, and they are a large, driving force in new-boat sales.”

More than half of dealers (57 percent) reported too much new-boat inventory in December, versus just 7 percent who thought it was too low. “Hoping for a strong show season,” said one dealer. “With dealer inventories being up, if sales don’t start out at a good pace, it could be a long year.”

During the off-season, dealers typically focus on managing costs related to inventory levels, and higher interest rates present a new pressure. “Similar to our RV coverage, we expect investors to entertain more pessimistic scenarios in order to gauge downside should a recession occur,” Baird analysts said.

“Higher interest rates and large price jumps on 2019 models are not helping sales,” said one dealer.

Lack of outboards in popular horsepower ratings was costing some dealers sales. One wrote that a seven- to 12-month wait “does not cut it.” Others said they were closing deals with alternate engine brands.

“With the exception of a few large, high-profile markets, where the buyers are extremely well-funded, the recreational marine market is collapsing outside of PWC, pontoon and extreme center consoles,” said one dealer. “Discretionary income is the lowest I have ever witnessed.”

The high pace of merger and acquisition activity in the industry might also be weighing on dealers. Sixty percent believe it will be the dominant trend in 2019, beating higher-horsepower outboards (19 percent), technology in manufacturing (16 percent), and autonomous docking (5 percent).

This article originally appeared in the February 2019 issue.



AMI Announces Certified Members

The association recognized new certified marina manager and certified operators during the opening day keynote at its annual conference and expo.


TopSide Acquires April Plaza Marina

The marina is the second largest and longest operating marina on Lake Conroe in Montgomery, Tex.


Polaris Reports Record FY22, Q4 Sales

The company reported a 15% increase in annual sales and 21% sales growth in the fourth quarter.


Dockmate Appoints Sales Manager

Bill Karmis comes to the company after more than a decade working in the marine controls industry and with a lifetime of boating experience.


AMI Hosts Pre-Conference Sessions

The sessions on leadership and marina management, and a tour of a nearby marina and boatyard operation, precede today’s official kickoff of the group’s annual conference.


Boating’s Greatest Thingamabob

The Seattle Boat Show kicks off next week with nearly 300 exhibitors, 800 new boats and the construction of a 100-foot Rube Goldberg boat machine.

1_YEARGIN copy

Business for Good

Companies have a unique platform to make people’s lives better through products and services, how we treat employees and the kind of advocate we are for our industry.


Are You Improving the Service Experience?

This month’s Pulse Report survey asks dealers about tactics being employed to improve the service department, along with other questions about retail conditions. Take the survey here.


Off the Hook Yacht Sales Acquires Two Marinas

The company announced that it purchased facilities in Hampstead, N.C., and Georgetown, Md.