Chaparral and Rec Boat Holdings will join Yamaha and Sea Ray in the fast-growing market segment
Chaparral Boats and Rec Boat Holdings announced within days of one another in April that they’re jumping into the sport jetboat market. But the two companies have generally different approaches — and reasons — for breaking into the segment.
Some of the reasons are similar. Chaparral president Jim Lane and Rec Boat Holdings president Roch Lambert cite the segment’s gain in market share since 2008, for example. Both companies got the opportunity at the same time because Bombardier Recreational Products quit the market last September. But that’s about where the similarities end.
Rec Boat Holdings is reintroducing its “underutilized” Scarab brand as a jetboat, and it is introducing waterjet power to its Four Winns brand. Chaparral is rolling jetboats into its existing lineup. Lambert plans to have models hit showroom floors this summer; Lane is carefully approaching the entry and won’t commit to an exact time frame, but he is hopeful the jetboats will debut in model year 2014. Lambert, a former BRP executive, has experience in the segment, but this is the first foray for Lane, who tends to run his company very conservatively, without making snap decisions or knee-jerk reactions to market trends.
“I think it’s a combination of things,” Lambert says. “BRP’s exit leaves a fairly significant demand, and there’s still some question as to what’s going to happen to the sterndrive configurations. Volvo and MerCruiser both get their sterndrive gas engine blocks from General Motors. Everyone knows that. GM has announced they will no longer supply those engines to Volvo and MerCruiser in 2015. We believe, and pretty much know, both those companies will have some pretty good alternatives for those engines, but it’s unknown what’s going to happen to pricing and configuration. This gives us an opportunity to offer a unique alternative.”
General Motors powertrain spokesman Tom Read said he couldn’t comment on product plans that might affect GM supply customers, but he did emphasize the company’s commitment to the marine industry. “We’re solidly behind the marine industry and have been for years. We don’t expect that to change.”
Volvo Penta and MerCruiser have shared their plans with Rec Boat Holdings, which builds Four Winns, Glastron and Wellcraft. “We know there will be sterndrive engines that will continue to be available,” Lambert says. “We’ll just have to see what impact there will be in terms of cost and configuration. They were kind enough to share with us what their intentions are, but we don’t have all the details. I want to feel comfortable with other options. We didn’t do that necessarily because we felt we needed a safety net, but it’s one more strategic benefit.”
BRP’s jet system
Both companies will use BRP’s Rotax 4-TEC inboard waterjet system, which was not available to other builders before BRP got out of the segment. “We had been asking to get their power for a long time, and they didn’t want to sell it, for obvious reasons,” Lambert says. “But since they decided to exit the business, they were able to offer it to companies like us, and I’m certainly happy that they did.”
Lambert sees other strategic advantages to entering the segment. “Our understanding with BRP is that they are going to limit the access to a select few, and we’re proud to be one of those few,” Lambert says. “We don’t believe they’re going to make it available to everyone, and that’s certainly attractive. I certainly believe in differentiation in any business, this one more than any. In sterndrive propulsion it’s a little difficult. It’s tricky to create differentiation because everyone has the same thing. Jet propulsion just gives us one more way to accomplish that uniqueness for our lineup.”
Lane, who also is executive vice president of Marine Products Corp., the parent company to Chaparral that also builds Robalo boats, says BRP contacted his company in October. “They mentioned an opportunity … to purchase their jet engines,” Lane says. After looking at the volume in jetboats, “we felt entering the jetboat market could deliver some of the same results for us and give our dealers an opportunity to gain some additional business and some additional profits.”
Chaparral has successfully entered the sportboat market with its H2O products, which are sterndrive-powered, and its entry-level Robalos, Lane says. “We had a couple of our very new boats in the SSX field [at the Marine Dealer Conference & Expo in Orlando], and those boats were exceptionally well received, which helped increase our market share, along with the H2O line,” he says.
“I don’t believe that developing exciting new product is the ‘new’ normal,” Lane says. “It is normal for us. If you looked at our record over the last six to eight years, we’ve introduced 24 new models into the Chaparral and Robalo lines. I think our dealers appreciate the fact that we have new models, and we always try to look at our new models and offer the best possible features and benefits. It takes a lot of planning to do that, and that’s why our jetboat entry is going to require some time — we want to get it right.”
BRP cited a sales decline in the marine industry globally, as well as declining sportboat sales, when it announced its exit last year. That left Yamaha as one of the only major jetboat builders until Sea Ray announced it was moving into the segment last summer. Sea Ray has an exclusive agreement with German engine manufacturer Weber Motor to supply jet propulsion systems.
A growing segment
Sales figures from Statistical Surveys Inc. show that the jetboat market rebounded strongly last year as the industry began to recover from the recession. SSI says 4,454 jetboats were sold nationwide in 2012, an increase of 1,173, or 26 percent, from 3,281 in 2011 and the most since 4,959 were sold in 2008.
“The segment is showing some good growth in spite of the downturn we’ve seen in the industry,” Lambert says. “This fits our game plan 100 percent. It leverages our dealer network. It complements our current offerings. It might cannibalize it a little bit, but we have the manufacturing capability. … I think it will make us better financially because it leverages all our resources.
“Jet propulsion was still pretty new 20 years ago, but now around 2 million PWC have been sold, so you have a much bigger base of customers who are aware of the unique benefits of the technology,” Lambert adds. “When I was trying to sell jetboats in 1997, 1998 and 1999, it was difficult because there was such limited knowledge of them. BRP was basically alone, and Yamaha was in its infancy with the technology. It took time to be able to sell those as a real alternative to other propulsion systems. By now, it seems those barriers have been overcome pretty significantly.”
Joe Cacopardo, Sea Ray’s marketing director, says other builders’ entry into the jetboat segment was anticipated. “You can see the market, and the numbers are growing, and there’s really only one player, Yamaha, as far as OEMs go,” he says. “We don’t know why BRP got out, because the industry numbers on the jetboat market have been growing.
“Sales of jets have been steadily going up for the last several years,” he says. “They’ve gotten bigger and quieter over the years, and the industry has started putting jets in bigger runabouts. Remember back in the day, they were loud, and they were these little things going in circles on the lake. Now they put them in 23-plus-foot boats. They also have different handling characteristics. They operate well in shallow draft, so that’s appealing for a lot of markets, like Dallas.”
Rec Boat Holdings plans to relaunch the Scarab brand, which had been absorbed into the Wellcraft line, as its own jetboat entity this summer, as well as add jet models to the 2014 Glastron line. “Everybody knows Scarab, and it’s an asset we own that was, frankly, underutilized,” Lambert says. “This was a way to resuscitate a brand that has huge potential. It’s a totally new brand. It won’t look like Four Winns or Glastron.”
There are tentative longer-term plans for introducing jet propulsion to Four Winns.
Chaparral is in the earlier phases of development, Lane says. “We’re in the developmental stage at this point and hope to have product available for the 2014 model year,” he says. “We’re being very careful about entry into this market. We want it to be right. So at this point we’re not saying exactly when the first model will be.”
This article originally appeared in the June 2013 issue.