Recreational boat registrations in April continued to plunge in most vessel categories.
In the 24 states disclosing their April totals, registrations declined by 20 percent or more from April 2021 levels in 10 of the 15 boat types tracked by Statistical Surveys, a Michigan firm that monitors new-boat registrations.
Overall, year-over-year registrations slid by 27.5 percent to 20,177 units in the 24 states, which represent about 61.5 percent of the U.S. boat market.
The declines were more a consequence of continued lack of inventory than any slowdown in Americans’ appetite for acquiring a new boat, says Eric Wold, senior analyst at B. Riley Securities.
Wold says the April 2022 totals were being compared with a year-earlier month that was red-hot. He says it will take some time for boatbuilders, beset by supply-chain constraints, to fulfill the existing backlog of orders. Once they do, the registration totals should rebound.
“It was tough comparisons,” Wold says of 2022 versus 2021. “The numbers are going to start to improve in the coming months. … The overall demand trends are still very strong.”
Three of the 15 boat-type categories saw increases in April 2022, but two of the types — yachts and houseboats — rose by only one unit each. Sailboats have been an oasis of continued strength, with April registrations jumping by 40 percent to 154 units. Sail was the lone category that was up in March.
The weakest year-over-year comparison was the electric-boat category, which declined by 62.9 percent. The other 11 decliners were paced by the semicustom and custom yacht category (down 50 percent), general recreation aluminum (down 41.7 percent), bowrider/deck (down 35.8 percent), aluminum fish (down 34.6 percent), pontoon (down 27.1 percent), inshore/offshore fiberglass outboard (down 21.6 percent) and jetboat (down 21.2 percent).
Some experts have suggested that the intensifying
pessimism about economic conditions, soaring fuel prices and higher interest rates threatens to weaken demand for boats. Wold says dealers have not yet reported much of a slowdown.
Wold also says he doubts that higher gas prices would deter a consumer who can afford a $200,000 to $300,000 boat. Eventually, the average-income American may become reluctant to order a boat if there is a long, deep economic recession, he says.
“As you get down to the marginal person, it’s definitely a discretionary purchase and a product you don’t need to have,” Wold says. “The companies have not seen an impact on the lower-priced boats yet.”
Eventually, if unsold boats start accumulating at dealerships, those dealers can entice customers with discounting or stretching credit terms out over more years, Wold says. For now, enough customers are still willing to plunk down a 20 percent deposit and wait 12 months for their new boat to arrive.
Even another 20 percent decline in retail demand would not persuade boatbuilders to modify production schedules for the next 18 months, Wold says. That’s because of the extended backlogs of orders and the dealers’ craving for more inventory.
This article was originally published in the July 2022 issue.