AMNATDPP - STOCK.ADOBE.COMSecuring any significant inventory of new boats continues to be difficult for dealers, and switching to a reliance on preowned boats has proved to be no silver bullet.
Of the 74 dealers responding to the monthly Pulse Report survey, 87 percent stated that the inventory of new and used boats is too low, while only 3 percent reported that inventory is too high. “There are not many preowned boats available,” said one dealer, who referenced further challenges, including “many supply-chain issues, especially outboard motors.”
Another dealer said: “Inflated values on preowned boats are pushing people to sell their boats privately before trading.”
Overall retailer sentiment about current conditions declined to 38 in April from 46 in March, according to the survey, which is conducted by Baird Research in conjunction with the Marine Retailers Association of the Americas and Soundings Trade Only. Asked about the three- to five-year outlook, the sentiment was 28 in April from 38 in March.
A result of 50 is considered neutral, so the survey results indicate that short-term and long-term pessimism deepened entering the second quarter, amid rising interest rates.
“Dealers continue to report extremely lean inventory levels, but retail trends softened in April relative to our Q1 checks,” the Pulse Report analysts said. “Facing rising prices, higher rates, negative geopolitical headlines and colder spring weather in northern states, dealer sentiment deteriorated further in April.”
A few dealers alluded to a dampening of enthusiasm at the retail level. “Huge price increases along with long lead times are turning people off,” one dealer said. “The companies seem to have their heads buried in the sand about what effect this has on the whole industry. The big downturn is coming, and they ignore the signs.”
Another dealer stated: “Supply-chain issues have seemed to have gotten more challenging than last year,” with “manufacturers moving the goalpost on product availability and promise dates, making it very tough to get commitments from buyers.”
Some dealers reported successes, including marketing on social media and the web, but the level of success depended on securing inventory “way ahead of time,” one dealer wrote. Another said that “having boats fully loaded and ready for quick delivery” was key. Yet another dealer stated: “If you have the product, you can sell it. If you can find labor to deliver the product in a professional manner, you can make the sale.”
Others said service and repowering activity was keeping them busy.
Some 40 percent of dealers reported retail declines, with 26 percent reporting growth. For used boats, 50 percent reported a decline, and 35 percent reported growth. Broader U.S. economic challenges may remain a factor throughout the rest of 2022, according to the April report.
“We expect reported results to improve as the weather improves and consumers take deliveries of ordered boats,” the analysts wrote, but “we remain mindful of recession risk and macroeconomic concerns.”
This article was originally published in the June 2022 issue.
