Survey: 2011 hasn’t lived up to expectations
MAPLE GROVE, Minn. — Boating Industry, in partnership with RBC Capital Markets and analyst Edward Aaron, recently completed a survey of 288 marine dealers in 44 states and Canada to assess industry trends and the dealer outlook as we exit the peak selling months of the year.
In an investment note describing the survey results, Aaron says the survey confirms what investors have already come to accept — that 2011 is not the inflection year many hoped for going into the selling season.
In the survey, dealers expressed disappointment with what appears to be a flat to slightly down year for new boat sales.
The survey did have some bright spots. Small boat categories continue to show gradual recovery, and dealers report robust pre-owned boat sales and service business. There were also pockets of geographic strength, including evidence of recovery in southern markets, and inventories remain healthy.
However, there are some areas of concern. Dealers have grown more cautious in recent months, reflecting disappointing sales performance and negative macro headlines. The biggest fundamental problem, by far, is that “trade-up” segments, cruisers in particular, are still very weak despite absorption of late model year used inventory.
Most dealers (about 60 percent) characterize the business environment as “weak.” Dealers remain disappointed with sluggish new boat demand, but other parts of the business – notably used boat sales and parts and service – appear much more vibrant. Strength in these areas is indicative of reasonably healthy participation trends, Aaron suggests, which indicates that sluggish new boat demand is a mostly a reflection of continued economic malaise rather than a secular demand issue. Dealers also report growing concerns over the macroeconomic and political environment.
Views on the financing environment are still not very optimistic but are clearly less negative than in prior surveys.
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