About the same time that Federal Reserve Chairman Ben Bernanke was announcing an aggressive program to buy mortgage-backed securities to boost the economy, a middle-aged couple stepped aboard a new Cutwater powerboat and began a close inspection.
It was the opening day of the Newport International Boat Show and I was on the boat talking with Mark Mansfield, national sales manager for Cutwater Boats, of Monroe, Wash., which builds two models (a 26 and a 28) of a trailerable, single-engine, diesel-powered contemporary family cruiser that is resonating well with a certain segment of buyers in today’s evolving market. The man, in his mid-50s, announced during the course of conversation, “We’re sailors.” His wife, a moment later, added, “We’re going over to the power side.”
And with that they embarked on a thorough walkthrough of the boat, asking a series of smart questions. How does the dinghy mount on the swim platform? What is the fuel burn at cruising speed? How do I access the engine? Can I see the engine? I’m not sure they gave two hoots about QE3, but they moved like a couple with confidence in their future (beneficiaries of the wealth effect?) and more than a few discretionary dollars in their pockets.
The serious buyers are coming back, which is borne out by the numbers, anecdotal evidence and encounters such as the one aboard the Cutwater. And more people who have been out of boating since the downturn also may be starting to return to the fold, Mansfield says. “What I hear a lot of is, ‘I used to own a boat, and I’m coming back in,’ ” he says. “People are coming back.”
Speaking in late September, Aarn Rosen of Statistical Surveys says new-boat sales for the year could finish up between 8 and 10 percent, with aluminum pontoon and aluminum fishing boat categories leading the way. The fiberglass outboard market from 11 to 40 feet has also been solid, up about 14 percent year to date in July. Though smaller, the ski and jetboat categories also have shown strong year-over-year improvement. “Everyone’s been saying they’ve been having dealer meetings beyond their expectations,” Rosen says.
Today’s buyers have done more research, know more precisely what they want and are less impulsive. “The buyers are taking their time to make a more intelligent decision,” Mansfield says. “They’re extremely knowledgeable, and they’re taking their time to get what they want.”
We may be a long way from pre-recession numbers in terms of new-boat sales, but the industry is better prepared today than at any time since the start of the downturn to give recession-weary consumers with aging boats a good reason to buy new. There will be more new boats at the fall and winter shows this season than at any time since the Great Recession, and not just modifications to existing boats, but new models from the keel up. That’s a key to pulling would-be buyers off the fences.
Rosen says it’s been a long time since he’s seen this level of investment in new product. And the builders — and their dealers — that invested in designing and tooling new boats are doing better than those that sat tight and are offering new copies of older models, he notes. “They’re giving customers a reason to come out of the trees,” Rosen says. “The consumer has been on hold for too long, and the people who are employed want to get on with their lives.”
In addition to the lure of fresh product, other factors driving new-boat sales include a dearth of good late-model used boats, stabilization and even improvement in some areas of the housing market, the availability of credit at low rates, aggressive pricing and, across parts of the Rust Belt, a lift from a resurgence in automobile manufacturing, Rosen says.
Cutwater Boats is a good example of a company that is driving sales through innovation and new models, and it’s probably a safe bet that Fluid Motion, the parent company that also builds Ranger Tugs, has something new in the pipeline. “It’s been a very solid year,” says Mansfield, the national sales manager. “The dealer network has continued to turn the inventory at turns they haven’t seen in a long time. Sales are up, and profitability is up.”
Looking forward, Rosen foresees single-digit growth in new-boat sales for the next few years. Worst case, he says, would be 3 to 5 percent during the next several years. Best case, he notes, would see new-boat sales grow by 10 to 12 percent.
What are Rosen’s concerns? He’s worried that government long-term won’t take more than a Band-Aid approach to solving the myriad fiscal issues at its door. And that uncertainty, Rosen says “is what keeps people’s hands in their pockets instead of spending.”
This article originally appeared in the October 2012 issue.