Dealers report older inventory finally moving, but often at rock-bottom prices.
Dealers reported flattish retail in February, though at the margin, more dealers reported growth (41%) than declines (36%) for the first time since March 2022. Dealers also reported flat used-boat retail in February, with 35% citing growth versus 35% who saw a decline.
The information came from this month’s Pulse Report, for which Soundings Trade Only, Baird Research and the Marine Retailers Association of the Americas asked 79 retailers to assess trends in North America.
One dealer said his team had been “blowing out aged inventory at rock-bottom prices. We’ve doubled our revenue compared to this time last year, but the margins are not good.”
Another said, “Larger discounts and lower margins are the only thing that is getting any interest or activity.”
Numerous dealers also said uncertain trade policy from the Trump-Vance administration, along with market volatility and a drop in consumer confidence, could hurt the prime selling season. Dealers reported bracing for the rocks while unloading inventory at those low margins.
Dealer sentiment on current conditions was roughly flat and remained negative in February (35 vs. 36 in January). The three- to five-year outlook declined to 39 in February from 45 in January.
Interest rates, affordability and the economy remained key factors, with dealers increasingly concerned about tariffs. One dealer commented, “Inflationary increases in household costs have eroded away many people’s ‘fun money’ that was previously earmarked for their recreational budget. Many customers have put their wish-list purchases on hold indefinitely until their source of income improves/increases to allow it.”
Dealers again reported that new-boat inventory was higher than they would prefer. In February, 65% of dealers reported new-boat inventory being “too high,” compared to just 1% that reported “too low.” For used-boat inventory, 35% of dealers reported “too high” compared to 34% who responded “too low.”
When asked what was working, dealers mentioned increased traffic from winter boat shows, consistent social media activity, intensity in following leads and positive energy from sales staff. One dealer said, “Non-current products are clearing up and allowing us to focus on current-year models. Our in-house promotion and marketing is working more than manufacturer-supported promotions.”
When asked what was not working in their stores, some dealers noted rising marketing costs, specifically for online listings.
One respondent said, “One of the biggest challenges we’re facing is the rising cost of advertising on Boat Trader. Our monthly rate has increased astronomically, with annual increases of up to 50%. These price hikes are squeezing margins and making it harder to justify the return on investment. After speaking with several other dealers, we’ve found that many are frustrated with Boat Trader’s pricing and are open to creating their own dealer-driven platform.”
This month’s Pulse Report also asked dealers whether they had a dedicated finance-and-insurance manager, and what key hurdles they faced with finance and insurance. Just over 60% reported that they have a dedicated manager or team. The most common hurdles were limited lender options and competitive rates, as well as consumer hesitation on finance and insurance products.
