Marine dealer sentiment increased in October (62 versus 51 in September) while the three- to five-year outlook declined slightly (29 versus 31 in September), according to this month’s Pulse Report. A neutral outlook is 50.
Following a longstanding trend that began around October 2022, retailers continued to say that new-boat inventory was too high. Similarly, dealers reported used-boat inventory levels that were too high for comfort. In October, 79% of dealers responded that new-boat inventory was “too high,” with only 4% reporting that it was “too low.” For used-boat inventory, 48% of dealers responded that levels were “too high,” and only 12% replied “too low.”
“We continue to discount preowned units as a market choice to help buyers purchase when they are shopping for new and experience new-boat sticker shock,” one dealer wrote in response to the monthly Pulse Report survey. “We are also trying to recapture buyers on dealership preowned units by offering warranties and financing. The preowned market is still somewhat flooded from the Covid purchases, making the used market very soft.”
“Frankly, just heavily discounting to get units sold,” another dealer responded. “We saw a slight shift from financing to cash buyers, but those seem to be fewer and the hardest to work with on pricing. With it being a soft market, everyone is looking for a deal.”
For this month’s Pulse Report, Soundings Trade Only, Baird Research and the Marine Retailers Association of the Americas asked 71 marine retailers to assess recent trends in North America. More retailers reported retail declines in September (57%) than growth (21%) and conveyed negative trends in used-boat retail, with 57% reporting declines versus 16% reporting growth. According to the survey, October typically represents approximately 4% of annual retail sales.
When asked what was working regarding retail sales, dealers responded with positives, but also plenty of frustrations. “With a looming election, all activity seems to have stopped,” one retailer replied. “Social media marketing, extended warranties and manufacturer-offered, financing rate buy-downs are getting some attention, but no buyers.”
As for what tactics are not working, dealers offered plenty. “Nothing seems to be working well,” one dealer said. “Pricing, interest rates, flooded used-unit market, and lack of confidence in the economy are killing sales.”
Another said: “Practically nothing is working at this time. The market remains slow, rates continue to deter buyers, and stricter underwriting is disqualifying buyers that previously would have been approved. We need to get consumer confidence back.”
Though interest rates have been lowered, inflation has dropped, and the job market has improved compared with the past six months, dealers pointed to the uncertainty surrounding the presidential election as a reason buyers were not pulling the trigger. “Our hope is that once the election is over, we will see buyers start to shop again,” one respondent said. “Right now, however, the market is one of the slowest we have seen in many years.”
