Market conditions seemed to improve somewhat in September, but dealer responses to a new survey fluctuated drastically depending on their location and segment.
Retail trends improved slightly from August, though more dealers, 41 percent, reported retail declines, compared to the 35 percent that reported growth, according to a survey that polled 63 dealers in North America on September market conditions.
Several dealers said promotions were working as well as new product and a “strong regional economy,” wrote one respondent to the Baird Pulse Report issued in conjunction with the Marine Retailers Association of the Americas and Trade Only Today.
“Large center console boats saw the first life in three months,” said one dealer; another said an unseasonably warm September was boosting sales.
That was in contrast to several who said fall had not provided the boost they had hoped it would.
“We are probably in a recession now,” said one respondent. “Nothing is working.”
“Promotions seemed to have little impact now,” wrote another dealer. “Potential buyers aren't as impressed with promotion and seem to already have mind made up.”
Dealer sentiment regarding current conditions returned to almost neutral territory at 49, up from 44 in August, but sentiment on the three- to five-year outlook ticked down to 43 from 46 in August.
Dealers cited government action/inaction as the primary headwind, with several saying tariffs and impeachment talks were key distractions for buyers.
"Caution with the economy, election year on horizon, instability of stock market, pricing of new boats, options for discretionary income usage,” wrote one dealer in the section asking what was not working.
Several cited tariffs and impeachment talk. A handful of dealers echoed concerns in August that more customers were being turned down for financing; it was unclear whether they thought banks were tightening requirements or if consumers had unwittingly seen their scores decline.
Others couldn’t place what was causing the slowdown, but one said boat dealer lots were still full of new units.
“Consumer is still there but in a holding pattern,” said the dealer. “It doesn't seem the wait is on election as most would believe, it is more that maybe what was perceived would happen with disposable income levels has just not materialized.”
Several dealers mentioned the high price of boats, lack of workforce, and the possibility of a recession as drags on consumer demand.
“Entry level has gotten soft,” noted one dealer, while another said that preowned boat sales were “surprisingly soft.”
“We, as an industry, have priced ourselves out of the market in just about every segment,” wrote another dealer.
Dealers continue to work down inventory after a softer-than-anticipated retail season; 65 percent of dealers still considered inventory "too high" in September — down from 72 percent in August — versus 3 percent who thought it was too low.
"Manufacturers have started pushing inventory and commitments unlike previous years where we couldn’t get product,” wrote one dealer.
The survey asked dealers how many manufacturers they represent, and whether that number grew post-recession.
While most dealers carry boats from three to five different manufacturers, they often only carry one or two brands within a segment. Almost half said they carry more brands now than they did prior to the downturn, but almost unanimously said they are not taking on any additional brands. That could make it challenging for new brand startups and international builders entering the U.S. marketplace to find distribution outlets.