More dealers reported declines in new-boat sales than increases, with 39 percent saying sales had dipped in September and 31 percent saying they increased, according to a new survey.
The finding was a “modest surprise, given strong trends over the summer,” says Baird Equity Research, which administers the dealer survey in conjunction with the Marine Retailers Association of the Americas and Soundings Trade Only.
Retailers indicated that the economy and access to credit positively impacted demand during the month, though several commented that access to credit had tightened. Many added that weather, trade-in activity, promotions and government action/inaction negatively impacted demand. “We have a lot of customers who don’t want to buy until after hurricane season,” said one dealer. Another said that customers had been busy with back-to-work and back-to-school tasks.
Sentiment on current conditions was 65, down from 78 in August. However, sentiment on the three- to five-year outlook increased from 65 to 73. Sentiment remains in positive territory, but dealers are mindful of cost pressures and rising floorplan charges due to increased interest rates, according to the survey. “With price increases coming and any tightening of credit, next year could be a challenging one,” said one dealer.
Baird expects retailer focus to return to inventory levels and the acquisitions that happened this year.More dealers said new-boat inventory was too high (41 percent) than too low (18 percent); 41 percent said the levels were good.
Dealer comments from the survey also varied, with one saying sales are continuing to outpace 2017, and others reporting that “nothing” was working. “Not seeing the light at the end of the tunnel,” said another.
Only one dealer commented on poor quality from manufacturers, a departure from the last few months, when several said they they were seeing a deterioration in quality control. “Workmanship has been on a steady decline, and dealers are supposed to make up for the shortfall from the manufacturers,” one dealer said. “We are required to deliver a good product — so should they.”
This article originally appeared in the November 2018 issue.