The NMMA eases limit on display of 2008 models in a bid to help clear inventories
Industry leaders are hoping a policy change allowing for expanded display of older model-year boats at the winter shows will help dealers clear excess inventory from their showrooms.
“The vast majority [of dealers] say, ‘This is really going to help me,’ ” says Ben Wold, executive vice president of the National Marine Manufacturers Association. “Ninety-eight percent of the people we heard from are very happy about it.”
The NMMA Executive Committee voted in December to temporarily relax the association’s restriction on showing non-current boats for the 2009 winter show season. The change means as many as half the boats an exhibitor displays at an NMMA-produced show can be previous model-year product.
“All 2009 NMMA winter boat shows will allow up to a 50-50 mix of 2009 models and clean, unused 2008 model boats to be displayed,” says Wold.
This is a significant increase from the traditional allotment of 20 percent, he points out.
“The NMMA Shows Committee, Executive Committee and staff understand the economic realities currently facing the boating industry and believe this one-time policy change will give dealers a prime opportunity to sell more product at boat shows over the next few months,” says Wold.
Phil Keeter, president of the Marine Retailers Association of America, calls it “a good move.”
“I think with the pipeline so full of inventory, it’s a smart move,” says Keeter. “I think it’s a necessity. A lot of dealers have non-current inventory.”
Although it hasn’t been widely promulgated, Wold says the 20 percent mix policy has been in place for more than a decade. It was instituted about 15 years ago in response to dealer requests for help in clearing older inventory. With boat sales slumping so badly, NMMA decided to temporarily expand that to a 50 percent mix.
“In tough times, you’ve got to reduce inventory,” says Wold.
He says consumers will benefit from the policy change because dealers likely will offer significant discounts, much as the auto industry does at the end of its model year.
“For consumers, there are going to be some great deals,” he says.
Keeter cautions, however, that dealers and manufacturers need to be careful in how they promote the older model discounts. He says exhibitors likely will promote the discounts within their boat show space, “but advertising those discounts in advance is dicey.”
“Consumers are going to expect new models, so if there’s too much old inventory it may turn [them] away,” he says.
Still, Keeter says the policy change is a good idea given the economic climate.
The buildup of excess inventory at the dealer level has had a trickle-up effect on the industry as a whole.
Dealers place fewer orders for newer models, forcing manufacturers to cut back on production and lay off workers.
Keeter says the sales slump also affects dealer turnout at the shows.
“A lot of shows are suffering from huge cutbacks from dealers in terms of space,” he says. “If they don’t take steps to help the dealer, there aren’t going to be any dealers.”
It wasn’t too long ago that one of the biggest internal issues facing the marine industry was improving manufacturer/dealer relations. Keeter says it’s heartening to see manufacturers and dealers now working hand-in-hand.
“It’s amazing how hard times bring people together,” he says.
This article orginally appeared in the February 2009 issue.