March was a tough month for dealers, with 51% reporting declines in new-boat sales and only 28% experiencing growth. The trend was similar for used boats, with 44% of retailers saying sales slowed and 31% saying they sold more than the month before.
“Some companies have offered salesmen [incentives] based on reorders, and that is not working,” a dealer said in the monthly Pulse Report survey. “Financing has been more difficult, and the younger generation is turned off by the higher rates, and we are seeing more cancellations on deals.”
For the Pulse Report, Soundings Trade Only, Baird Research and the Marine Retailers Association of the Americas surveyed 99 marine dealers about retail sales trends, electric propulsion and their onboarding processes for new employees.
Dealer sentiment on current retail trends declined in March to 32 compared with 42 in February. The three- to five-year outlook also dropped by 10 points, from 47 in February to 37 in March. A neutral rating is 50.
Heading into the spring selling season, new-boat inventory was replenished to the point that 65% of dealers said they had too much, while 11% said it was too low. Used-boat inventory remained lean, with 48% of retailers saying it was too low and 23% calling it too high.
“The flip from high demand/low inventory to low demand/high inventory happened faster than I even thought would happen,” one dealer said. “Manufacturers have been pushing product and, early on, claim[ed] inventory would be tight again this year. Then they keep coming back saying they have a few more units we can have. Now, after slow sales and taking inventory, we are sitting heavier than we would like.”
Still, many dealers had positive feedback. “Yamaha outboards are hot, pontoons are hot,” one said. Another said: “Boat shows have been better than expected. Manufacturer incentives [are] beginning to work as the boating season approaches.”
Two consistent complaints were inflation and high interest rates. “Rates are taking out the entry-level buyer, and buyers are almost exclusively cash buyers, as those that have the money will not pay current rates,” one dealer said. “I am concerned that eventually we will run out of cash buyers. Pricing from OEMs and dealers is unsustainable. I fear a very stagnant market and inventory looking out 24 months.”
When asked about customer interest in electric propulsion, nearly every dealer said there was little to none. “Customers are interested but not willing to buy something that isn’t proven,” one dealer said, voicing the opinion of many.
We also asked dealers about their onboarding processes for new hires, and 58% said they have a formal program for each position at the business. Some 23% said they don’t have one. More than half of the respondents, 54%, said their onboarding process lasted 30 days, while 19% said 60 days, and 22% said 90 days.
This article was originally published in the May 2023 issue.
