Continuing to voice concerns about having to carry too much new-boat inventory, 89% of dealers who responded to this month’s Pulse Report survey said they had too much new product in July. Only 4% of retailers said they didn’t have enough. Another big concern was the high prices that dealers had to pass on to customers.
“What’s not working is trying to retail all this inventory that is priced way too high based on wholesale costs being way too high,” one dealer said. “The boat companies got way too greedy with their massive year-after-year price increases. Now here we are, priced out of the market.”
In this month’s Pulse Report, Soundings Trade Only, Baird Research and the Marine Retailers Association of the Americas surveyed 91 marine dealers asking about retail sales trends, how they are managing 2023 model year inventory and what they’re trying to up-sell in their service departments.
Some 58% of dealers reported new-boat retail declines in July, with 22% saying they saw growth. On the used-boat side, 48% said their numbers were down, while 25% reported growth. For used-boat inventory, 36% of respondents said it was too high, with 32% saying they had too few used boats in stock. Overall retailer sentiment for July checked in at 43, a jump of 17 points over June’s 26, while the three- to five-year outlook improved from 31 to 38. A neutral sentiment reading is 50.
Trade-in activity, promotions, access to credit and poor weather early in the month were cited as the primary headwinds to demand in July. “Gotta get the rain and wind to go away and get some hot weather,” one dealer said. Another added: “Higher interest rates and monthly payments are a definite deterrent. Much higher MSRP factory pricing from years ago is [another] deterrent.”
Looking at revenue trends, 61% of dealers said they had negative new-boat numbers in July. The news wasn’t much better for used boats, at 59%. Negative impacts from finance and insurance were about the same, at 60%.
Nearly half of the dealers (46%) were neutral about parts and service revenue in July. When it comes to up-selling strategies for service, responses were across the board. One dealer said it’s pushing faster turnaround time on presales and offering free, 30-day storage on preposted sales.
The biggest complaint for service was the lack of technicians, with many respondents saying they couldn’t find enough help. “We cannot [serve] the current volume of service on our schedule,” one dealer said. “Absolutely missing opportunities by not up-selling, but we are over our capacity of scheduled work.”
Another respondent added: “We need a mechanic. We’re not even getting any applications.”
Possibly providing a blueprint for others to follow, one dealer said: “We have quite a few techs, but it is still all we can do to keep up with getting boats fixed and out the door. As it slows, we always up-sell and plant the seed for winterization. Our winterization mailer/email menu will be in our customers’ hands the week after Labor Day.”
This article was originally published in the September 2023 issue.
