And the Wait for New Boats Goes On - Trade Only Today

And the Wait for New Boats Goes On

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Ninety-five percent of marine dealers say they waited at least a month to get new-boat orders filled in August, and 35 percent say they experienced lead times of more than three months.

Nearly 70 percent of dealers responding to a survey by Robert W. Baird, in conjunction with the Marine Retailers Association of the Americas and Soundings Trade Only, say they waited at least 60 days for new-boat orders to get filled in August — only 5 percent waited less than 30 days.

Dealers are functioning as “part of the manufacturing process” because when they get orders filled, there are skyrocketing warranty claims to service, said one dealer, adding: “Much of this is due to the fact that there is demand for product that cannot be reasonably manufactured on a timely basis, and there is also the lack of qualified workers.”

“Manufacturers need to concentrate on quality regardless of time demands and the lack of qualified help,” argued one dealer.

Another called the quality of the products being delivered “poor.”

“We have too many warranty claims that take away from our retail labor and parts business,” the retailer continued.

At the same time, 41 percent of dealers who took the survey said they considered their inventory levels too high in August, versus 24 percent who thought it was too low; 35 percent thought it was “just right” — a split that indicates the unevenness among geographies and demand for various segments in different parts of North America.

“Inventory is ticking up slightly,” wrote one dealer. “I am increasingly worried about when the next dip in the economy is going to happen. I’m seeing more articles that talk about indicators that are starting to flip.”

Several mentioned categories that weren’t performing well — aluminum fish, towboats and pontoons, to name a few — while others reported strong sales in those segments.

Sentiment on current conditions, at 78, ticked up from 77 in July, while sentiment on the 3-to 5-year outlook dropped from 73 to 65. For context, 50 is considered neutral.

Still, long-term sentiment has fluctuated more drastically in the monthly reports versus short-term sentiment, reflecting a variety of growing concerns. There were a plethora of issues that appeared to weigh on the minds of respondents, including climbing prices of new boats, the rapid pace of industry consolidation, an industrywide workforce shortage, Florida’s red tide, and the trade war.

“Concerns on pricing, we are no longer appealing to blue collar workers,” wrote one.

Another expressed trepidation about how large conglomerates were treating independent, small dealers. “Boat business is a people business — without people, all we have left is fixtures and molds.”

One dealer said “merger mania” would affect the marine industry for years to come, and predicted a “much different marine world on the pending horizon.”

“Look at auto industry and the mega dealers,” said another retailer. “Little guys are going to be left in the dust.”

Government action or inaction represented the single factor dealers felt negatively impacted sales; the only other factor listed among the usual suspects that they thought hurt demand was lack of trade-in activity.

Some decried the trade war, and others lauded the Trump Administration, but one dealer perhaps summed it up best: “Politics is taking up too much consumer energy. A time with consistent quiet would be welcome.”

Many commented that employee turnover, lack of competent talent, “lazy employees” and a shortage of qualified technicians were hurting business. That shortage is taking its toll on dealers, one noted: “Business has been very strong, but not a lot of dealers seem to be having fun. Everyone has tired crews and a complacency is starting to kick in.”

This article originally appeared in the October 2018 issue.


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