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Slowing Sales

Heading into the fall and winter boat-show season, most dealers expected sales to be flat or down as much as 20 percent
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For this month’s Pulse Report, Soundings Trade Only, Baird Research and the Marine Retailers Association of the Americas surveyed 85 dealers about their expectations for sales heading into the fall and winter boat-show season.

Looking at the big picture, more dealers (66%) reported retail declines than growth (15%) in October, a continuation of the trend that was seen the month before. Inventory was returning to more normal levels, with 27% of dealer respondents reporting that it was too low, and 35 % saying it was too high.

Dealer sentiment on current conditions and the three- to five-year outlook remained negative, but both measures were up slightly from September. On current conditions, sentiment improved to 30 from 27 in September. On the three- to five-year outlook, sentiment increased to 41 compared with 33 in September. Dealers were mindful of replenishing inventories and the economy, but the biggest concern was rising boat prices. “These boats are starting to price themselves out of their own market,” one dealer commented.

Another dealer said that manufacturers had raised the prices too high. “They all have record profits, which indicates they overshot on prices. They need to be reduced.”

In response to the question, “What are your expectations for unit sales during the 2022-2023 boat show season?” the highest number of respondents expected sales to remain about the same. This response was followed by sales being down 10% to 20%, while those expecting sales to be down more than 20% and others estimating that sales would be down 5% to 10% were a dead heat. Of the dealers who expected sales to be better, those estimating a 5% to 10% increase led the way.

Individual takes on the show season were varied. “High-end brands don’t think there will be much difference,” one dealer said. “We would be happy with flat or slightly down.” Another said, “Our show season begins in February, and we’re planning on having a strong show season.”

A third dealer said that delays in getting new boats could be a benefit. “We anticipate earlier buyers buying in-stock inventory because of limits on inventory not only in the marine industry. For example, six to eight months to get a new Lincoln car. This will offset the negative impact of not having non-currents, which is typically half of the sales at the boat show.”

A third of dealers expected 40% to 60% of sales to come from repeat customers. This belief edged out the 31% of dealers who predicted repeat sales at 20% to 40%. Eighteen percent of dealers thought repeat sales would account for 60% to 80% of business, and 14% estimated less then 20% of sales would come from current customers.

“There are still a lot of buyers interested in upgrading, but there is a sense of caution right now moving forward,” one dealer said, summarizing the concerns of many of his peers. “If the bottom doesn’t drop before spring, there could be a strong rush of buyers before the season starts.” 

This article was originally published in the December 2022 issue.

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