Fins in the water

An opportunity in the market and the technology to take advantage of it are behind the major push Genmar Holdings Inc. is making into the entry-level boat segment this spring.

The company’s new FinCraft line, formally introduced during January’s Minneapolis Boat Show with the launch of the 17 SC model – a 17-foot fiberglass fishing boat packaged with a 50 HP motor, custom trailer, depth finder and trolling motor for $13,995 – is an attempt to attract entry-level buyers while also taking market share from competing aluminum brands.

So says Genmar Holdings Chairman Irwin Jacobs, who believes the fiberglass line –which he says will quickly grow in 2009 to include 18- and 19-foot models as well as dual and center consoles – will help his company grow at the expense of aluminum boat builders.

“From my lips to God’s ears I want to build 10,000 of these a year, the whole line,” Jacobs says. “I can’t tell you I know we’re going to do it, but I have an objective. This year is our launch year, but I think we can build it up and get up to 10,000 – with any normality. I don’t need a booming market, just a normal market … because we’re going to take [market share] from our competitors. And there’s nothing they can do about it.”

Those competitors include Brunswick Corporation, which purchased the Lund, Crestliner and Lowe brands from Genmar in 2004. And it’s clear Jacobs believes the FinCraft line will give him the upper hand in the battle for the lower end of the market.

“What are you going to do, lower your price of aluminum to lose money?,” he says. “I don’t think so. They’re not making any money now.”

Jacobs says he had been considering targeting the aluminum market with a fiberglass product for some time, but told people at Genmar the company would not do so unless it could bring a value to the customer that was between 20- to 25-percent less than aluminum boats were currently selling for.
A recent “breakthrough” in the VEC (virtual engineered composites) manufacturing process, which Jacobs declined to elaborate on, made that possible, and Genmar is now able to produce one FinCraft 17 SC hull, ready for the assembly line, every 32 minutes.

“You can’t do that with aluminum, you can’t do that with anything,” he says. “[We’ve] come up with a process within a process to do some things. You know, time is money, and VEC is the only real closed-mold process in the world that builds the same boat every time.”

Genmar has also been working through a selection process to determine which dealers will carry the FinCraft line in 2009. The company says it received close to 200 dealer inquiries within the first 24 hours of the Jan. 5 letter Jacobs sent to Genmar dealers announcing the FinCraft launch.
“We had more responses from this than anything we’ve ever offered before,” Jacobs says. “We hit a nerve, because it’s something they want.”

The company says it has now been contacted by about 400 interested dealers, but Jacobs says Genmar is aiming to have 150 dealers carry FinCraft initially. Current Genmar dealers will have first crack at the boats, but he says others will have an opportunity as well.

“There’s no question we want to go to Lund, Crestliner, G3, Tracker - dealers
who are selling aluminum,” Jacobs says, “and I think this is more profitable for
them with less headache, and I think a lot more customers out there.”

Genmar done with aluminum
Genmar’s other FinCraft models (Jacobs offered no explanation for the brand’s name other than this: “People think up these things: Why Lund? Why Ranger? Why anything?”) will also be priced to appeal to the entry-level buyer and be offered with a similar package of accessories.

Jacobs says FinCraft was not planned in anticipation of the economic downturn, but the company did bring it to market more quickly as a result. Genmar is currently at work on the 18-foot model, which should be released soon after you read this story, followed by the 19-foot model in the months after that.

“You’ll see them flying out,” Jacobs says. “We’re coming out with everything behind this as quick as we can. We need a whole line in order to compete in the world where we want to compete.”

That world will be one in which Genmar no longer makes aluminum boats. Although Jacobs, in a letter sent to Genmar dealers late last September, said the company was “seriously considering re-entering the aluminum boat business,” the new production process enables Genmar to compete in the entry-level segment with fiberglass, and Jacobs now says his company will not re-enter aluminum boat manufacturing.

“That’s all over, I’m not going to put [aluminum boats] out of business and then go back into it,” he says. “We don’t need to do that. And we’ll have a happier customer: This is a luxury, luxury boat for entry-level boating. I can tell you, this is new. This will sell a lot of boats.”

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