Dealers hit hard in January

SIOUX FALLS, S.D. – While Spader dealers seemed to fare well in 2007, compared to the average boat dealer, the first month of 2008 appears to have been a difficult one.

Total dealership sales for the average dealer tracked by Spader Cos. during the 1-month period ended Jan. 31 were down 46.9 percent, compared to January 2007, the company reported in a recent statement.

That’s largely due to a 44.4-percent drop in new boat sales, as well as dramatic declines in revenue from parts and accessories, service and F&I departments. Used boat sales were up 6.4 percent during this period.

While that sales decline is in comparison to January 2007 – a month in which new boat sales were up 25 percent – Spader dealers’ average net loss increased by almost 26 percent that January and has increased again by 33.2 percent this year. Of course, the other factor to consider is that January is a slow month for most dealers, typically consisting of less than 5 percent of a dealer’s total annual sales.

The training and consulting firm tracks North American boat dealers, both large and small, to compile an average profile, then compares year-over-year trends in a number of different categories.

New boat sales decreased from $457,187 to $254,407. However, pre-owned boat sales increased from $39,839 to $42,382. Total dealership sales declined from $692,091 in January 2007 to $367,677 in January 2008 for the average dealer, reported Spader.

The good news is that new boat inventories were down 3.9 percent to $4,035,697, while the average dealer’s pre-owned boat inventories increased 1.8 percent to $395,875.

Spending was down significantly across all categories for a total reduction of more than $100,000, from $308,076 in January 2007 to $203,595 this January, according to Spader.

The unit gross margin percentage was down 1.9 points to 15 percent, while total company gross margin percentage was down 2.4 points to 33.4 percent.

Net losses grew by 33.2 percent, compared to January 2007. The average dealer experienced a net loss of 22 percent of sales or $80,733, compared to a net loss of 8.8 percent of sales or $60,613 during the same period of 2007.

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