Skip to main content
Publish date:

Dealers: Rising new boat prices are outpacing inflation

pulsex860

Dealers responding to a new survey say they are seeing signs of market softness that is beyond bad weather, and some are saying local conditions are worse than during the recession.

Some of the 77 respondents to the survey said they have more inventory on hand than they have ever had and many say the rising price of new boats is outpacing inflation.

“Manufacturers want dealers to stock too much inventory,” commented one dealer respondent to the Baird Pulse Report, done in conjunction with the Marine Retailers Association of the Americas and Trade Only Today. “Even with discounts, promotions and extended financing I still can’t give the product away. Our local market is much worse now than it was during the financial crisis.”

“Things are rapidly headed towards a tipping point,” wrote another. “If retail sales pace does not pick up soon, we will have no choice but to postpone and/or cancel boat orders. We have never been so heavy on inventory at the model year rollover as we are right now.”

Most said they’d seen prices on like-for-like boats increase between 4 and 6 percent year-over-year, followed by those who have seen them go up between 1 and 3 percent. Comments overwhelmingly reflected concerns that boats were becoming too expensive for the average person.

“The constant price increases, some coming every six months on new boats, just has to stop,” wrote one dealer. “If we [are] heading into a major recession, we will see boat deflation, just like in '08 to '09.”

“There is caution in the market, coupled with lower demand,” said another. “Tariffs are starting to impact the industry, and fears of a pending slowdown are causing consumers to postpone buying decisions, some telling us until after the 2020 election. Something needs to change.”

Many dealers said they felt pressure from manufacturers to stock more inventory than they wanted.

“We have a bad local economy, too much rain, too much fresh water along the coast at the same time prices are increasing dramatically,” wrote one dealer. “Sales took a nosedive in May and manufacturers still want large orders — even though I have a few ’18’s I can’t even give away.”

Though anonymously given, comments did seem to vary by geography; however, the majority still reflected at least some concern about economic conditions. Government action/inaction surpassed weather as the top challenge for dealers in July.

Dealer sentiment was still at record lows since the survey began in December 2013, though the short-term outlook rose from 25 to 34. The long-term outlook remained flat at 36. The index considers 50 a neutral rating; the long-term three- to five-year outlook first dipped below neutral in December 2018; the outlook on current conditions dropped below neutral in June.

The overall tone of the comments has continued to shift more negatively as well. There were just nine positive comments under the “what’s working” section; 88 more negative comments were dispersed in response to questions about rising boat prices, challenges, and additional comments.

“The weather got better yet the sale of new units stopped,” said one. “If the boating industry gets much greater we will be back to 2008 looking for a new job.”

Related

AIM Marine Group Hosts Meet the Editors Event

More than a dozen editors from Active Interest Media’s Marine Group participated in the day-long, information-sharing event.

Fairline Makes Leadership Appointments

The British luxury boatbuilder founded plans to chart its course for the future with a new CEO and the return of Derek Carter as chairman.

Battle on the Great Lakes Rages On

The Icebreaker Wind Turbine Development faces strong headwinds from boating and fishing groups.

Limestone Boat Co. Expands Dealer Network

The company adds four new dealers to its roster, with three to represent Aquasport Boats.

NMEA Announces ‘22 Training Course Schedule

For next year, marine training courses will be offered as virtual and in-person sessions for basic marine electronics installers, and in-person only for advanced installers.

GM Invests $150M in Electric Boat Start-Up

General Motors has acquired a 25-percent stake in Pure Watercraft, a Seattle-based e-propulsion outfit.

Patrick Acquires Marine and RV Seating Maker

The Elkhart, Ind.-based component manufacturer finalized its purchase of Williamsburg Marine and Williamsburg Furniture.