Thirty-five percent of dealers surveyed tell analysts business is improving - others expect recovery in 2011
A recent survey of boat dealers shows "encouraging signs" of a recovery, according to a report from analyst RBC Capital Markets.
"Inventories have been purged, product margins are improving, and an active preowned and service market provides evidence of a more engaged customer," the report from analyst Edward Aaron concludes. The results were released in advance of Brunswick Corp.'s most recent earnings report.
"Dealer sentiment, while still not great, is clearly on the upswing," the report says. "At the same time, the industry continues to face significant challenges. New-boat sales are slow to recover, and dealers report difficulties selling newer boats after incentives are withdrawn. This is especially true for larger fiberglass boats."
RBC surveyed 185 marine dealers for its report, roughly split 50-50 between Brunswick and non-Brunswick dealers. The majority of dealers were small, with less than $5 million in sales. Most - 55 percent - anticipate positive growth over the next six to 12 months, while only 14 percent expect declines. Issues continuing to impact dealers include the availability of used boats that are less expensive than new boats and the pressure created by tight floorplan financing.