Buying group members may be better off than other independent boat builders — and the biggest conglomerates they compete against, according to numbers Boating Industry obtained from Info-Link Technologies.
In comparing unit sales of boats 15 feet and above from 2003 to 2004, it appears that, on average, members of the three industry buying groups — the United Marine Manufacturers Association, Independent BoatBuilders Inc., and the American Boatbuilders Association — saw unit sales and market share increases.
Of the three groups, UMMA was the only group that experienced a change in membership from 2003 to 2004. It added Maurell Products Inc. and lost Edgewater Power Boats and Klamath Boat Co. However, even if one compares only those companies that were members for both years, the group saw its unit sales and market share climb.
Collectively, those independent builders that were not buying group members saw a minor unit sales increase but a decline in market share.
Given the acquisitions that took place, it’s no surprise that Brunswick saw a unit sales increase in 2004 and Genmar, a decrease. However, if you compare only those brands that each company held during both 2003 and 2004, Genmar saw a unit sales decrease and Brunswick saw only a slight increase. And because the market grew from 2003 to 2004, both companies saw those brands’ collective market share decrease during that time.
These numbers suggest that two of the largest boat building conglomerates in the industry, and many of those independents not members of buying groups, were unable to take advantage of industry unit growth.
The buying groups say this is no surprise. Independents can react to the market faster than their larger competitors, focus on customer satisfaction rather than catering to Wall Street, and concentrate on fewer brands. And those independents that belong to buying groups have several advantages over other independents. Not only do they tend to get better pricing from suppliers, they often share knowledge and technology.
Those best able to take advantage of the market upswing, however, were Tracker Marine and the Yamaha Marine Group. Tracker saw a 1.14 percent market share increase, while Yamaha saw 0.37-percent growth.
When most marine industry professionals think of consolidation, they think of Brunswick or maybe even Genmar. But buying groups are also a form of consolidation, one that is growing.
Collectively, the three buying groups increased their sales by almost 10,000 units from 2003 to 2004.
And with the establishment of a fourth buying group — the American Marine Manufacturing Group — both the number of boat builders belonging to buying groups and the volume they produce will likely increase.
Since the end of 2004, the boat market has undergone quite a bit of change. Through acquisitions completed in the first five months of the year, Brunswick has added about 10,000 units to its annual production. All four boat brands acquired so far this year — Sea Pro, Sea Boss, Palmetto and Triton — previously belonged to buying groups.
Only one acquisition — that of Cobia by Maverick Boats — bucks this market share trend. While it reduces Yamaha’s presence in the boat market and likely will increase the total unit sales of IBBI members, it represents less than 1,000 units.
IBBI has also boosted its membership this year with the addition of Scout Boats, representing over 1,000 units, Sea Hunt, representing about 1,500 units, and Parker Marine, representing about 750 units.
In 2005, UMMA has seen the departure of Sea Boss, Sea Pro, Palmetto Custom Boats, DuraCraft, Osprey Boat Co., Scout Boats, Parker Marine, and Sea Hunt, and the addition of Twin Vee, Hunt Boatbuilders and Pioneer Boats as members. Assuming no other changes in 2005, this should reduce the total unit sales of UMMA members by about 7,000 units.
If ABA experiences no other changes, the loss of Triton should reduce ABA members’ total unit sales by about 6,300.