Dealer spending cuts not enough

SIOUX FALLS, S.D. — While dealer spending in terms of dollars continues to run about 20 percent lower in 2009 compared to 2008, this reduction is not enough, as evidenced by the larger net operating loss reported by the average dealer tracked by Spader Business Management for the first four months of the year, when compared to the same period of 2008, the company reported in a recent statement.

The average dealer reported a year-to-date net loss of $131,718 for the first four months of 2009. This compares to an average net loss of $111,849 reported for the first four months of 2008.

“It appears that further actions are needed by dealers to avoid increased losses in 2009,” the company stated. “The best time to make needed adjustments is while there is still some selling season left.”

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 for the average dealer tracked by Spader Business Management were down 40.2 percent for the first four months of the year when compared to the same time frame in 2008, according to Spader. Sales dropped from $1,554,015 to $928,830. Pre-owned boat sales were down 11.3 percent.

New boat inventory levels were down 16.1 percent for the first four months of the year — from $3,934,195 to $3,302,256. Spader reported pre-owned boat inventory was up 17.8 percent to $468,711 during this period, resulting in a total inventory decline of 13 percent.

Total dealership sales fell 30.5 percent to $1,889,115 during the first four months of the year, compared to the same period of 2008. F&I revenue fell 48 percent and service revenue dropped 15.3 percent for the month, while parts and accessories revenue was down 10 percent, marina revenue was up 7.5 percent and other department sales fell 28.3 percent.

The total dealership gross margin percentage was up by 1.9 percentage points because with boat sales down, a greater percentage of revenue is coming from higher margin areas such as parts & accessories, service, finance & insurance and marinas, Spader explained. Unit gross margin percentages were down by 2.6 percentage points to 14 percent, compared to last year.

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