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Rough Waters Persist

Dealers say inventory shortages and supply-chain issues are still headwinds against consumer demand
Screen Shot 2021-11-16 at 11.58.49 AM

Dealer responses in this month’s Pulse Report again proved out that they face low product inventories and strong consumer demand. Supply chain constraints remain a reality, and survey responses show that the restocking cycle has yet to begin in earnest.

That’s according to 116 retailers who responded to the monthly survey for the Pulse Report, conducted by Baird Research in conjunction with the Marine Retailers Association of the Americas and Soundings Trade Only. “Boats are selling regardless of what they are, simply due to solid demand and limited supply,” one dealer commented.

Another wrote: “We’re still able to sell new boats without having them in stock for 2022 deliveries.”

A roughly equal number of dealers reported growth as reported sales declines, with inventory availability remaining a key driver of retail activity. Clearly, net demand still appears well ahead of supply. Brunswick Corp. noted that all of its 2022 model year and 80 percent of its calendar year production slots were already sold out.

In this Pulse Report, 94 percent of dealers reported that new-boat inventory is too low, and 85 percent said the same for used inventory. Dealer commentary highlighted frustration with having too little inventory to meet high demand: “OEM delays in getting product to us and the missing components on each and every boat.”

Sentiment about current conditions declined (43 versus 49 last month) amid frustration about inventory availability, while the three- to five-year outlook increased (52 versus 44 last month). Replenishment expected in the coming off-season for much of the country is expected to start alleviating retail concerns, but inventory likely won’t be normalized before the 2022 season.

Dealers also expressed concerns about the impact of higher costs on demand. One suggested a constricting industry caused by mergers and acquisitions: “We were focused on representing family-run manufacturers because they had the same long-term view we have. But over the last five years, all of these have been purchased and are now public. Public companies are focused on immediate profit, not necessarily satisfied customers and dealers.”

At the same time, 71 percent of dealers said mergers and acquisitions in the marine industry had not affected the brands they carry. “We’re still able to sell new boats without having them in stock for 2022 deliveries,” one dealer said. Another wrote: “Preselling is working. Revenue is up in both sales and service.”

Some dealers said they were finding competitive advantages in the marketplace: “Other marinas are missing the mark with customer service, and customers are flocking to our door without asking for (their) business.” A dealer enjoying the current ride said: “Boats are selling regardless of what they are, simply due to solid demand and limited supply.”

Others took a long view toward cultivating future sales: “Putting together a design center where customers can come in, view colors, options, electronics packages, etc. It’s encouraging getting a build slot for ’22 production, in anticipation of low inventory availability again this year.”

Still other dealers said they sensed missed opportunities: “Communication is improving between OEM and dealers, but lack of product and long lead times are allowing customers to spend money in other sectors.”

Overall positive comments echoed the need for dealers to foster relationships with OEMs and customers.

“Great partnerships with our main boatbuilder brands that are keeping inventory rolling in. Developing our own apprenticeship program for the service dept.” And: “Storage, sales, service hitting on all eight cylinders. Rental business has been our superstar in 2021. Year to date, customers are more understanding about our shortcomings than we expected. Open and frequent communications seem to be the key.” 

This article was originally published in the December 2021 issue.

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