Genmar wants dealers to help pay for Brunwick’s engines

MINNEAPOLIS, Minn. — Genmar Holdings Inc. wants its dealers help pay part of the higher cost of Mercury and MerCruiser engines beginning January 1, according to Grant Oppegaard, Genmar’s president and chief executive officer.

As part of a press release announcing the findings of a dealer survey, Genmar reported that it found that 92 percent of those responding believe “boats sell engines” instead of the engine prompting the consumer to buy a particular boat, according to the boatbuilder. And while Genmar says it will continue to carry all engine manufacturer’s products corporate-wide, the company will not pay the additional charge found in the prices of some engines, specifically those manufactured by Brunswick.

“Genmar has negotiated contracts based on projected unit volume with all major (engine) suppliers,” Oppegaard wrote in a statement issued yesterday. “Quite frankly, certain engines cost us more than other engines and Genmar is not able to continue to absorb the significant price differential among the engine manufacturers.

“Beginning January 1, 2004, Genmar will pass on to the dealer and consumer some of this differential for the Mercury and MerCruiser brands.”

Oppegaard said that the prices for Mercury outboards and MerCruisers will increase approximately 3 percent on all orders received after January 1, while the pricing on the other primary engines of preference for this model year will be held.

Survey results not surprising

The high number of dealers who reportedly told Genmar that boats sell engines, rather than the other way around, was not surprising to the company.

“This confirms earlier data that we received from a major engine manufacturer that conducted an independent research study and found that less than 10 percent of consumers are predisposed to a certain engine,” according to Oppegaard, “and over 90 percent of consumers will follow the advice of their dealers in the selection of an engine to go with their new boat.”

Additionally, Genmar found that almost all of its dealers “have taken on a second line of engines as backup to their primary line over the last couple of years.” This occurred because “of the problems that certain manufacturers have experienced with their new high tech engines and the dealers’ desire to be able to avoid customer service problems while the engine manufacturer worked to bring their engines to an acceptable level of reliability and performance,” according to the release.

The reputation of the engine manufacturers also varies widely between saltwater boat dealers and those whose customers engage in freshwater boating Genmar found. In fact, Genmar found “performance and reliability characteristics by engine manufacturers … has become more important than price in determining which engine the dealer wants on their Genmar boats.”

“If your boat company offers five major outboard brands, you can anticipate this will continue,” Oppegaard said. “If your Genmar boat company is offering you only two brands, it is because the dealer organization for the boat company has stated their preference through their ordering and that particular dealer organization does not feel it needs additional engine offerings.”

“Genmar will continue to carry all engine manufacturers’ products corporate-wide and will offer preferred engine brands by individual Genmar boat companys,” Oppegaard added. “In other words, the engine manufacturers that you (Genmar dealers) are currently being offered through your boat brand will continue during model year 2004 and for the foreseeable future.”

However, Genmar’s dealers want the boatbuilder to “maintain a business relationship with all the major outboard and sterndrive engine manufacturers in order to be able to offer to the Genmar dealer the best performing engine each year.”

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