By Peter Granata, president, Granata Design and the Marine Design Resource Alliance — Before history gets rewritten, I wanted to offer a glimpse into why new boats were introduced in July rather than September.
There appears to be some momentum behind introducing new models in September rather than July. Some who are calling for the later introduction appear to be attributing the early introduction to the manufacturer’s greed. To be fair, you should know that boat manufacturers started introducing new boats in the middle of summer at the request of the dealers.
What happened “decades ago” was that local banks controlled the floor planning for local dealers. At the end of the typical selling season, in the fall, the banks would send out someone to do a physical inventory of what boats had not sold by checking the serial number on the boat for the model year number. If a boat was determined to be “unsold” for that model year the dealer was required to pay a curtailment to the bank of an additional ten percent.
The banks, in essence, forced the dealer to demand from the manufacturer an early release of new models so the dealer would not to be forced to buy “old” inventory when he needed it in July or August and pay a curtailment.
In the current economic climate, it might make sense to hold the release of new models until the end of the summer selling season. Maybe. You have to be the judge as to how it would impact your business.
My sense, however, tells me that once sales return to a quicker pace, we may well want to return to buying new boats in the middle of summer. After all, if and when you need to replenish your inventory it only makes sense to floor plan a new product versus a product that will be out of date in 30 days.
They say we are doomed to repeat history when we fail to take notes. I just thought I’d pass along this note. So noted.