‘Nothing Seems to Be Working’

Marine dealer sentiment decreased in December (40 versus 47 in November) while the three- to five-year outlook also fell (27 versus 29 in October), according to this month’s Pulse Report survey. A neutral outlook is 50.

Dealers reported sales declines in December, consistent with 2024’s trends. Only 25% of dealers reported growth versus 49% that reported declines. Inventory continues to be high, with 88% of dealers reporting it being “too high” versus 2% saying it was “too low.” Dealers also cited lower used-boat retail sales in December, as only 18% reported growth and 56% reported declines.

One dealer summed up the situation starkly: “It is the economy, and nothing seems to be working. Heavy discounts, rebates, back-end giveaways, extended warranties and free services are not moving the needle. Buyers seem to all be seeking the lowest price but are reluctant to actually close. The sentiment is still uncertainty about the market and future, [which is] causing inventory to sit as we all wait.”

For this month’s Pulse Report, Soundings Trade Only, Baird Research and the Marine Retailers Association of the Americas asked 54 retailers to assess current trends in North America. Overall, while inventory may not be historically elevated in terms of units, the combination of higher floorplan interest rates, lower offseason activity and sluggish retail demand has dealers wanting as little inventory as possible until trends change. Some dealers predicted fewer purchases of additional new models.

When asked what was working regarding retail sales, dealers cited lower pricing. Some suggested the year’s new models might rekindle enthusiasm among buyers. “There are more tire-kickers than usual this time of year, all who are looking for rock-bottom deals,” one dealer said. “Despite discounts, rebates, service and back-end inclusions, very few are actually closing on the sale.”

Another responded, “Boat manufacturers are bringing out new product, which we hope will bring renewed interest to the coming shows.”

Dealers pointed to nagging difficulties of high interest rates and persistent inflation. “High retail interest rates are affecting consumer demand,” one said. “High interest rates on floorplan are severely cutting into profit margins. In our region, we have seen a couple of large marine retailers file bankruptcy in the last six months.”

Another said: “We were hoping that after the election boat buyers would come back out, but this has yet to happen. The few shoppers coming in are not motivated to purchase with any of the factory incentives. They look at you and ask, ‘Is that all there is?’ Boat prices have increased so much that we have a much smaller audience to sell to.”

The survey also asked dealers about their efforts to improve cybersecurity. Most expressed middling confidence in their cybersecurity systems, and many had made efforts to improve. “Everyone in our dealership has completed red-flag training,” one dealer said. “We often discuss suspicious files, etc. We have also installed additional security software on all of our computers.”

Another said: “We have several layers of security with our network and VPN. We use SonicWall and CrowdStrike, along with the network security software provided by the initial model.”

Yet another dealer expressed concern about the efficacy of cybersecurity systems: “You can take all the precautions in the world, but at the end of the day, your people are the biggest risk and need to be educated to be constantly vigilant and not give out information.”