In a month that usually sees new boats being delivered every hour on the hour every sunny Saturday, June sales were slow, and in-person interaction seemed to be even slower at dealerships. “If we can get people into our showrooms we can sell them,” said a dealer who responded to the monthly Pulse Report survey. “It’s getting them into the showroom that is the problem.”
Added another: “It’s great that manufacturers are doing promotions and rebates, but it just doesn’t feel like it matters much when dealers are not getting people in the door.”
In this month’s Pulse Report, Soundings Trade Only, Baird Research and the Marine Retailers Association of the Americas surveyed 94 dealers asking about retail sales trends and how they are managing 2023 model year inventory with 2024 orders arriving.
Half of the respondents reported declines of 50% in new-boat sales in June compared with 32% who saw growth. Used boats were down 49%, while 32% of dealers experienced sales gains in the segment. The overall marine retailer sentiment index for current conditions was 26 in June, a slight increase over May’s 23. The three- to five-year outlook dropped to 31 in June from May’s 35. A neutral score is 50.
Reduced margins, manufacturer rebates and boats priced below $50,000 were most enticing to buyers. “Extended warranties are selling well,” said one dealer. Another said that luxury pontoons are moving well, while saltwater family fishing-style boats were moving well at a different retailer. “Salespeople who are very diligent in their follow-up and adding some creativity are earning business,” said one respondent.
Inventory continues to be a prickly topic, with 80% of dealers reporting that they had too many new boats in stock, and just 6% saying inventory was too low. Used-boat levels were more balanced, with 31% of dealers saying it was too low and 26% saying it was too high. Typically, June represents about 15% of annual retail sales. Retailers said trade-in activity, promotions and access to credit were the primary headwinds to demand.
When it comes to moving 2023 models as manufacturers push to get orders for 2024 boats, dealers have gotten aggressive and clever. One heavily increased its marketing and advertising budget, and another partnered with manufacturers to offer rebates. A third is offering a 20-hour service at no charge and 10% off winter storage for any new 2023 models purchased in June. “Using 2024 pricing, then showing discounts on 2023 product,” said one dealer. “Show 2024 product, then tell the customer, ‘I have a deal in the back on a 2023.’ Adds value to the 2023 and helps keep margins up.” Some respondents said they’re still trying to get rid of 2022 product, and others haven’t even placed orders for 2024 units yet.
Higher interest rates remain a tough hurdle to clear. “We’ve lost a number of sales to customers wanting to trade in three- to five-year-old boats. Their old interest rates were 1/3 to ½ lower than what they can get today,” another dealer said. “New payment is a killer.”
This article was originally published in the August 2023 issue.
