CHICAGO, Ill. – As the boating season has come to a close for many areas of the United States, boating industry executives planning for 2010 have been forecasting little to no improvement in retail sales. However, despite that outlook, National Marine Manufacturers Association President Thom Dammrich believes boat builders have something to look forward to in the year ahead.
“Conventional wisdom is that the boating industry will sell 135,000 units at retail in 2009, but only build 50,000 units,” Dammrich wrote in an e-mail interview. “In 2010, sales are expected to be between 135,000 and 150,000 units, which would be an 11 percent increase at the high end of that range. But production will likely be close to the retail units sold. Our production numbers could triple from 50K to 150K and that will feel like a big recovery for the manufacturers.”
Despite what many have characterized as a very different kind of recession, our industry’s best indicators of future performance haven’t changed, according to Dammrich. They are consumer confidence (which NMMA expects to turn up in the next four months), housing stats, new car sales, RV sales, availability of credit and GDP growth, he stated.
In fact, the Recreational Vehicle Industry Association (RVIA) recently reported that RV shipments in July were at their highest seasonally adjusted level since October 2008. July’s total represented the smallest percentage decline in month-over-month comparisons since April 2008, according to the RV association. It’s unclear whether this is due to RV dealers’ healthier inventory levels or an increase in consumer demand. Dammrich said he suspects it is a reflection of both. As the boating industry’s recovery historically has trailed the RV business’ recovery by about six months, this is a source of optimism, he suggested.
Thinking ahead to recovery
As the industry begins to recover, the future of the Grow Boating Initiative is likely to resurface.
“It is an absolute necessity, and as resources become available, they will be deployed to achieve the original goals to get more people participating in boating,” commented Dammrich. “Participation precedes purchase.”
What exactly a recovery will look like for our industry has been the topic of much discussion in recent months. Many industry executives have speculated that a decline in the availability of home equity lines of credit and a general tightening within the credit market, combined with the increased financial conservatism of consumers, will translate into a smaller, wealthier base of potential boat buyers.
Dammrich suggested that this will likely be true in the short-term, but not in the long-term, citing Brunswick CEO Dusty McCoy’s belief that the boating industry may be able to gradually rebound to as high as 300,000 units per year over the next five years or more.
“One of our industry’s biggest concerns is that new taxes and regulations could choke recovery and cause a double dip recession later next year,” he concluded.