SIOUX FALLS, S.D. – New boat sales made by the average dealer tracked by Spader Business Management fell by 23.3 percent in 2008, when compared to 2007, the company recently reported. This compares to the 28-percent decline forecast for the U.S. powerboat market 15 feet in length and above by the Info-Link Bellwether Report.
New boat sales totaled $4,873,434 for the average dealer tracked by Spader in 2008, down from more than $6 million in 2007. Similarly, pre-owned boat sales fell by 19.3 percent from $1,035,875 last year to $1,283,490 in 2007.
Total dealership sales dropped by only 18.3 percent, when compared to last year, largely due to the relative strength of many Spader dealers’ alternative profit centers, like service, parts & accessories and marina departments.
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.
The area where the average dealers tracked by Spader were most dramatically impacted in 2008 was profitability. The average net profit of dealerships tracked by Spader fell by 69.2 percent. Last year, the average dealer showed a net profit of $96,909, or 1.1 percent of sales, compared to 2007, when the average dealer showed a net profit of $314,748, or 3.0 percent of sales.
While the average units gross margin percentage dropped by seven-tenths of a percentage point to 17.0 percent in 2008, the total dealership gross margin percentage is up by 0.9 percentage points to 29.9 percent. As with past reports, however, this is due to a greater percentage of total revenue coming from higher-margin products and services, such as parts and accessories, marina, service department and finance and insurance.
Total spending was down for these dealers by 9 percent, but Spader pointed out, “the reduction in spending was not enough to offset the decrease in revenue.”
New boat inventory levels dropped by 2.0 percent from more than $3.432 million in 2007 to more than $3.365 million during the same period of 2008. Used boat inventory rose 5.9 percent to $417,978 in 2008.
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