Few surprises at Miami show

MIAMI, Fla. – Given the prominence of the Miami International Boat Show – due to factor such as the size and location of the show, the number of new products introduced there and its trade value to the industry – it’s hard not to be hopeful about what it can deliver, even in a down market.

But this year’s Miami show results appear to reflect both the “challenging market conditions” that have become all too familiar and the “mixed results” that show organizers have been describing throughout the fall and winter season.

“Attendance was up 1 percent going into Sunday, but a big rain storm in the first part of the day kept five or six thousand potential attendees away. As a result, overall attendance will probably be down,” said Thom Dammrich, president of the show’s owner and producer, the National Marine Manufacturers Association. The Miami show took place from Thursday, Feb. 14 through Monday, Feb. 18.

Dammrich suggested show sales were mixed. “For every person we heard from that had a good show, we heard from somebody that didn’t have a good show,” he commented.

A leisure industry analyst who attended the show through Sunday afternoon shared his impressions in a recent report.

“Sales activity appeared anemic at this year’s Miami show, which is not a big surprise but is discouraging nonetheless,” said Ed Aaron of RBC. We … came away with the impression that overall sales were meaningfully lower than last year.

“Even with a higher closing rate, we think MarineMax’s sales at this year’s show will be down in the double-digits compared to last year’s show. We did not see the same type of contraction for Brunswick’s US Marine brands (Bayliner, Trophy, Maxum), but we note that those brands faced much easier comparisons,” he added.

Aaron also suggested that there is a possibility of additional production cuts in the second half of the year.

“We believe production will be maintained at or near recent levels until the model year changeover in July. However, if current trends persist, we would not be surprised to see production cut further going into the next model year,” he stated in the report.

The silver lining

While the show seemed to support what the industry was already beginning to believe – that it’s going to be a challenging year, as the past few have been – there is some good news, according to Dammrich.

“The good news is that the Fed is responding with interest rate cuts. I expect to see them go even lower,” he stated in an interview today. “That should hasten a bottom in the housing market. The job market is still relatively strong, though slowing a little bit. It’s not all bad news. Frankly, there are parts of the country that are fairly strong, particularly the middle section of the country where housing didn’t see the really high highs, so it hasn’t seen the low lows, as well as places like Texas where the oil industry is pretty strong. The weakest markets have been the biggest markets, unfortunately. But there is strength in parts of the country.”

Aaron also had some good news to share. He suggested that despite weak industry sales, new product initiatives appear to be working.

“This year’s show featured new model introductions from a number of Brunswick’s key brands and the first true marketing effort (“360° Control”) to support the joystick docking systems (Zeus, Axius and Total Command). Although overall sales were light, our checks indicated that new models accounted for their fair share of orders taken at the show,” he commented.

Dammrich seconded that sentiment, commenting, “We always see a lot of innovation during downturns. To a certain extent, it delivers upturns. It’s going to help drive new product sales as soon as some of these macroeconomic headwinds pass us by. Those who can innovate are going to be in the best position when the market rebounds.

There are sales out there. There are people buying boats, just not as many as we’d like. While sales were actually down last year by 9 percent in dollars and 15 percent in units, there are still companies and dealers that saw significant gains in sales. There are sales to be made for companies that have innovative product and a dealer base that’s aggressive,” he concluded.

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