Inventory to Remain a Challenge in 2021

Retailer sentiment remained strong in October, but dealers see a shortage of boats as a hurdle for next year
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Marine dealers responding to the Pulse Report survey overwhelmingly predict that a shortage of new boats, coupled with continued demand, will be their biggest challenge next year, with 69 percent listing it as the top of the headwinds list.

By October, 88 percent of the 72 dealers responding to the survey, conducted monthly by Baird Research in conjunction with the Marine Retailers Association of the Americas and Soundings Trade Only, said they had too little inventory, versus 2 percent that said it was too high.

“Can’t sell what you don’t have,” wrote one dealer in the comments section of the survey.

“At this point, if we had it, we could sell it to someone.” said another. “The lack of product is not working.”

Still, 55 percent reported retail growth over October 2019, versus 21 percent who saw a decline in business.

“All types of boats are selling. ... We have more sold boats currently on order at this time of year than in the past 10 years,” said one respondent. “Hopefully, there are no Covid shutdowns, or the long production lead times will go through the ceiling.” Another dealer added: “Consumer demand is strong, interest rates are low, and consumer confidence, although fickle, is above average.”

Dealer sentiment on current conditions remained strong, edging down slightly to 83 from 85 in September and 87 in August, and the three- to five-year outlook dropped to 64 after spiking in September at 70; the August reading was 59, possibly reflecting respondents’ uncertainty around the pandemic and rising Covid-19 cases around the country.

Several of those who responded said that parts, accessories and engines from most major manufacturers were also difficult to get, compounding an already large service backlog. One said the lack of help made it difficult to keep up with the increase in service.

“Inventory availability will continue to be a problem, along with post-election economic uncertainty,” wrote one, while another commented: “The entire supply chain is out of sync. Very hard to schedule with so much on backorder.”

The pandemic and election also concerned dealers in October, with one commenting: “Control of the virus and the political arena” when asked to comment on what isn’t working for business.“The economy and the pandemic,” said another dealer. “That is all we are going to be looking at. Demand is going to be there, and it looks like we will have enough product to meet most of it. Will the economy and the pandemic keep people from buying?”

“Dealers will be faced with a large income/tax basis for 2020, then a foreseen lower income base for 2021,” said one dealer. “It will be hard to keep payroll levels and employee needs balanced.” 

This article was originally published in the December 2020 issue.

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