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Sea Rays and Bayliners with a Euro feel

If you're really going to win in export sales, you have to compete with local brands instead of other exports, says Brunswick Corp. executive Stephen Wolpert.

Plants that have manufactured Brunswick's European brands, such as Quicksilver, Arvor, Uttern and Valiant, are now building Bayliners and Sea Rays specifically for a European clientele, says Wolpert, Brunswick vice president of manufacturing and chief operating officer of the company's European boat unit.

"These are U.S. platforms configured with European standard features and some local customization," says Wolpert, an approach that would be difficult to achieve in the United States because of relative volumes. The products have been "really, really successful" as far as growing sales, he says.

This proximity to market offers several advantages, Wolpert says. There are inventory savings through elimination of the "long water bridge" - ocean freight costs and import duties. It also allows for quick response to demand changes and provides insulation from currency fluctuations, he explains.

Brunswick's global U.S. brands - Sea Ray, Boston Whaler and Bayliner - have had local sales offices in Europe and the Asia-Pacific region since the 1990s, Wolpert says. Typically, they have accounted for 20 to 30 percent of export sales. That number has risen to about 43 percent in the last two years - in part because of overall market declines, particularly domestically, says Wolpert.

"But over the long term, we expect to maintain a bigger percentage because of the locally manufactured product," he says. "When exports get more expensive we're on the continent, so we won't suffer that problem."

Since the mid-1990s, Brunswick added the locally manufactured brands in Europe as part of its Mercury Engine Business Unit, and those brands have been seeing strong growth since the mid-2000s, Wolpert says.

During the last year, Brunswick has been shifting manufacturing to more cost-effective locations, closing a plant in Sweden, opening one in Portugal and adding two in Poland for a total of three. The company has successfully transitioned the most popular Sea Ray and Bayliner models to those plants - a move that was made easier when Brunswick consolidated operations in the United States and freed up resources, Wolpert says.

"This has given Brunswick a distinct competitive advantage, versus [other] exports, due to proximity to local markets and also local builders," he says.

The Sea Ray brand has had a contract manufacturing relationship with an established Polish partner for several years, Wolpert says. The Bayliner manufacturing presence is about seven months old and is also based at a well-known plant in Europe, he says.

The opportunities in Poland and Portugal surfaced as a result of relationships Brunswick had already formed with its European brands, Wolpert says. "We were able to take advantage of that base," he says. "The ability for others to make this shift will take a long time and require significant resources."

Brunswick also recently partnered with an Argentine manufacturer to build a set of popular Bayliner boats in that country, Wolpert says. "That's a more standard Bayliner but directed to the local clientele," Wolpert says.

That move was driven, in part, to avoid import duties, Wolpert says. Brunswick has a manufacturing presence in Mexico and could send builders to train Argentine workers.

This article originally appeared in the May 2010 issue.



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