Inventory is leaving showroom floors twice as fast today as it did a couple of years ago.
That’s according to Bruce Van Wagoner, president of GE Capital’s commercial marine lending group, who gave an address on the state of the marine industry via podcast last week with National Marine Manufacturers Association president Thom Dammrich.
“That’s a very promising indicator,” Matt Gruhn, president of the Marine Retailers Association of America, told Soundings Trade Only. “We’ve traditionally been known as a two-turn industry, but I think it’s really a little less than two turns, so for us to be up and over that, it means we’re managing our inventory better.”
Inventory more than a year old is at a historic low of 13 percent, compared with 47 percent at the recession’s peak, Van Wagoner said in the podcast.
The decision to buy a boat can still be impulsive if consumers see what they want, Dammrich pointed out. That’s why “dealers really need to make sure they have adequate inventory levels,” Van Wagoner said.
“The dealer’s risking losing a sale to a spontaneous buyer if what that person’s looking for is not in stock or if they don’t see a range of choices,” Van Wagoner said. Inventory is one-third less than it was at its peak, he said.
Dealers must have a clear understanding of their specific markets and trends, Van Wagoner said.
Gruhn agreed that dealers should always stock according to their markets to meet demand. But he also pointed out that learning the new and often fluctuating market needs is challenging for dealers.
“There’s still so much negativity in the mainstream media, and with all that uncertainty out there ... it’s hard to imagine dealers wanting to stock up real heavily after what they learned during the recession,” Gruhn said.
“I’m not suggesting dealers shouldn’t add to their inventory,” Gruhn added. “If their market needs it, they always need to have an adequate amount of inventory. But the difficulty now is twofold. One, they’re still learning what the new market requires and, No. 2, we’re fresh off this recession where so many were caught with additional inventory and there was a lot of talk at the time of how ‘we need to remember the lessons of this recession,’ and I think that’s still lingering out there.”
— Reagan Haynes