The Affordability Tree

Affordability does not stand alone in the boating industry.
It’s one of many interrelated issues on which the boating industry needs to concentrate as it works to stop and then reverse the boat sales decline, according to Dusty McCoy, Brunswick Corp. president.

McCoy explains that while the industry has been focused — and has made great progress — on relationships within the industry, it now needs to turn its attention to its relationship with the consumer.

The following is a list of factors he says have been working together to contribute to the industry’s decline.

1. Intimidation. “If you’re not a boater, going to a boat show is an intimidating activity. There are literally dozens of boat brands. They look like a sea of white … While we in the industry can walk into a boat show and feel an order about how the show is set up, to a novice it is quite intimidating and overwhelming.”

2. Complexity. “Boating covers a wide variety of activities and uses the consumer may want to engage in. There is an enormous proliferation of brands and models … over 1,500 brands going after 300,000 units. So the complexity for the consumer coming in is staggering. There is no easy way to work him or herself through ‘What do I need for my particular activity?’”
3. Product cost. “There is no doubt our product is gradually but [inevitably] becoming more expensive. We haven’t found a way in general to reduce or hold the price of our products as the auto industry has [and therefore] a way to stay very attractive to the new consumer.”

4. Product comfort. “[For] most products in the price categories in which we sell product, the consumer expects a strong end-to-end warranty and a very high level of quality. We sell a house. Everything in the house, you have to go to the supplier for the warranty. That makes the consumer a bit uncomfortable.”

5. Service. “All of us in the industry know of wonderful dealers who provide great service to their consumer. But what we don’t have … I can take my Jeep to a Jeep dealership anywhere in the United States. The mechanics are trained for the vehicle, the Jeep gets fixed, it’s very hassle free. You can’t say that about your boat.”

6. Cost to use. “Insurance is going up for the product and in some places, really going up with new terms and conditions (i.e. Florida). Fuel prices have been very high. And we’re not coming out with particularly new fuel-efficient engines to drive our product. Slips – if they are available – are becoming more expensive for those that have product they need to keep in a slip. For those who trailer their product, put-in locations are declining, as well as parking lots. Winter storage for those who can’t store their product is not available or is expensive. And just the everyday maintenance of the product is becoming more expensive.”

7. Used boats. “Many more used boats are being sold than new boats. [These sales are] fundamentally outside the OEM/dealer relationship. It’s an entirely different and parallel market. We have not engaged ourselves in that market and not put any order into that market.”

8. Impossible to destruct. “Fiberglass never goes away. And our system is clogged up with fiberglass product [in the form of used boats] … and no one knows what to do with them. When we add to that the engine manufacturers continue to produce better and better engine product, and for most marine engines, the level of use is very low. So there are engines hanging around also.”

9. Lack of water. “If you look at many of the large Western impoundments, the water levels have been drawn down and we’re not seeing them come back at any rapid pace. Then, look at central and southern lake projects. We’re seeing a bit of the infrastructure deteriorate and investments required. As an example, Lake Cumberland, one of the premier houseboating lakes in the world, has been drawn down 40 to 50 feet and will be drawn down for a long period of time to fix the dam.”
10. No fish. “We all have read about the declining saltwater sportfish species. And while there’s been great emphasis on it, we know there is more work to do. In many of our inland fishing waters, the fishery has begun to decline. That will take replenishment. Fishing as an activity is in decline.”

11. Convenience. “It is more difficult to boat than it is to engage in competing activities. If you’ve got your boat in a marina, you have to regularly take care of the boat, check on it. If you’re trailering, you have to load it up, tow it, put it in. All of that adds up in a world that is fast moving. Boating — the way it is done today — is not conducive to people’s schedules and [need for] convenience.”

Getting the numbers right
Most consumers would be stunned to learn that over the past 10 years, the average unit price of an outboard boat has almost tripled, while sterndrives and cruisers have almost doubled and ski/wakeboard boats have more than doubled.

The numbers aren’t quite what they seem, however. First of all, the average size of a boat purchased within those categories also has risen dramatically in recent years. The number of 18-foot outboard boat units sold from 1997 to 2005 declined slightly from 28,954 to 28,058, while the number of outboard boat units 21 feet in length and above more than doubled from 24,108 in 1997 to 54,118 in 2005, for example.

Meanwhile, the average unit price of an 18-foot outboard boat rose more than 62 percent from 1997 to 2005, from $7,908 to $12,880. Of the $4,972 increase in the average unit price of that 18-foot outboard boat, more than $1,700 can be attributed to inflation. Other factors include the rise in raw material costs and the increased content per boat.

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