To wrap up 2022, marine retailers reported lower demand, expressed more negative sentiment and voiced concerns about rising inventory. Boat prices and the economy remained top of mind for dealers in December.
In this month’s Pulse Report, Soundings Trade Only, Baird Research and the Marine Retailers Association of the Americas surveyed 96 dealers about their expectations for new-boat retail unit sales in 2023 and the strategies they are using to overcome customers’ price objections.
Dealers were asked: “What is your expectation for new-boat retail unit sales at your dealership in 2023?” In response, 67% said they expect new-boat sales to drop, 21% believe there will be some growth, and 12% predict that retail sales will stay flat.
When it comes to customer price objections, 33% of dealers said they explain the value of a buyer doing business with their company. This was followed by 28% who cited being able to provide a range of products at different price points, including new and used boats. Sixteen percent said promoting special discount and packages was working for them, while 15% said offering creative financing options was a successful strategy.
More dealers (66%) reported that new-boat sales declined, while 16% said they saw some growth in December. The situation was basically the same for used boats, with 62% reporting a drop in sales and 13% claiming growth. December typically represents about 2% of annual retail sales.
Dealer sentiment checked in at 22 on a scale of 100 for the month. The three- to five-year outlook was 33. A rating of 50 is neutral.
Dealers pointed to government action/inaction, access to credit, the economy and a slowdown in trade-in activity as having negative impacts on business. Fifty-eight percent of dealers think new-boat inventory was too high, and 18% said they didn’t have enough product. Used-boat inventory was closer to being balanced, with 40% of dealers calling it too low and 32% saying they have too many preowned models in stock.
In the comments, one dealer kept things realistic, saying things are “back to a normal winter period.” Voicing the concerns of many other commenters, another said, “The boating industry seems to be pricing itself out of the family boating market.”
The trend of selling boats at prices exceeding retail appears to be subsiding. “We may have to discount to normal margins in 2023 to help counter the price increases,” one dealer said. Another added: “We will get a better feeling of the current market in late January when we have our first boat show since Covid.”
When asked what wasn’t working, dealers said that manufacturers aren’t doing enough to support them. “Manufacturer promotions that are less than 2% of the purchase price seem to be futile,” one dealer said. Another added, “If manufacturer prices don’t stop going up, there will be very few in the middle class that can afford a boat.”
This article was originally published in the February 2023 issue.
