Why new boats were originally introduced in July

Before history gets rewritten, I wanted to offer a glimpse into why new boats were introduced in July rather than September.

Peter GranataBy 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when you need to replenish your inventory it only makes sense to floor plan a new product versus a product that will be out of date in 30 days.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.

3 comments

  1. Well, yes, Peter, that was part of it, but another part sort of went like this: IMTEC (International Marine Trades Exhibition & Conference) was held annually at Chicago's McCormick Place in late September. Manufacturer's introduced new boats at IMTEC.

    However, the builders started holding dealer meetings for the purpose of introducing and selling those models earlier and earlier in the summer, some even moving as far north as June. The manufacturers wanted to build new boats over the summer but needed solid dealer orders to do so. The manufacturers struck deals with the financing companies to be on hand during these dealer meetings and approve floor plans. One result was that IMTEC, the biggest marketplace in the industry, faded away.

    Boat companies which were part of boat "conglomerates" (Genmar, OMC, Brunswick) led the charge and everyone else simply had to keep pace.

    New York (The New York National (Power)boat Show in mid-January, also was a huge time for the introduction of new boats and for years there were three trade and press only days. But this too was affected by the summer dealer meetings because they were "just around the corner" so while builders may have introduced one or two boats at New York (and in later years at Miami--which also had multiple trade days), the summer dealer
    meetings were the place to buy. That and the fact that NMMA forgot how to promote and let New York degenerate into the regional show it now is. And that was before the Triborough Bridge and Tunnel Authority, owner of the Coliseum and the Javits Center, started screwing around with the dates.

  2. Bob:
    You're right. There is always a little more to a story. One aspect that you reminded me about was the demise of IMTEC.
    There were a host of problems with that show (a show I dearly enjoyed). Labor costs contributed to driving manufacturers (like Bayliner, at the time) to create their own show for less money with an audience that they invited. Other boat manufacturers thought that was a good idea.
    Additionally, the NMMA began to "enlarge" the show by adding suppliers to the dealer mix which created a nightmare for all three groups. Manufacturers wanted to talk to dealers, dealers wanted to ask suppliers for "short orders", and suppliers wanted to occupy the manufacturer's time with a sales pitch. Net end result was that manufacturers became frustrated with high labor costs to exhibit their boats only to find that their booth was overrun with suppliers trying to sell them something.
    Then somebody came up with the idea that maybe they should open the "franchise" show to the public.
    The organizers of IMTEC forgot how to treat their primary customer - the manufacturer.
    End of IMTEC.

Leave a Reply

Your email address will not be published. Required fields are marked *

*