Marine industry finance and insurance (F&I) providers are predicting that 2003 will be a better year than the industry experienced in 2002, despite stock market woes and challenging economic conditions.
One of the major reasons for this predicted turnaround is that dealers’ inventories are in better shape than they’ve been for several years.
Several providers said that while spring sales were sluggish, dollars collected as a percentage of receivables were very high in the mid and late summer months, indicating strong sales for dealers and creating a foundation for future growth.
While some industry sources report that dealers have been cautious at fall dealer meetings, now that excess inventory is gone, dealers have been restocking for the coming year.
Among the other factors cited for the expected improvement are the continued trend toward recreating close to home, reasonable unemployment rates and low interest rates.
One provider also pointed out that with manufactures and dealers paying more attention to their customer service ratings, the industry is building a stronger dealer structure, which significantly impacts the F&I segment. As dealers’ businesses get stronger, F&I providers’ businesses become more stable.
Several providers sounded a warning note about the potential for increasing insurance rates for marine businesses, particularly property and casualty in the coastal areas.
In response, some nationwide US companies are creating marine industry insurance packages in which multiple types of insurance, such as property, casualty and workman’s comp, are bring combined to reduce overall costs.