Dealer sales still improving, but net profits remain low

SIOUX FALLS, S.D. — New boat sales were down by 32.2 percent and total dealership sales were down by 20.0 percent for the average dealer tracked by Spader Business Management during the eleven-month period ended Nov. 30, compared to the same period of 2008, the company reported in a recent statement.

Once again, that continues a trend of incremental improvement in those numbers during recent months — in October, new boat sales were down by 33.9 percent and total dealership sales were down by 22.0 percent.

The average dealer reported year-to-date new boat sales of $3,220,884 and average total dealership sales of $7,328,992 for the first eleven months of 2009. This compares to the average new boat sales of $4,753,214 and the average total dealership sales of $9,164,516 reported for the first eleven months of 2008.

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.

Pre-owned boat sales for the average dealer tracked by Spader Business Management brought in $1,029,435 during the first eleven months of the year, down only 2.1 percent when compared to the same time frame in 2008, according to Spader.

New boat inventory levels were down 24.5 percent for the first eleven months of the year — from $3,363,574 to $2,540,443. Spader reported pre-owned boat inventory was down 9.7 percent to $398,796 during this period, resulting in a total inventory decline of 22.8 percent.

F&I revenue fell 37.2 percent and service revenue dropped 9.2 percent for the period, while parts and accessories revenue was down 6.5 percent, marina revenue was down 12.8 percent and other department sales fell 4.1 percent.

The total dealership gross margin percentage was up by 0.7 percentage points. Unit gross margin percentages were down by 1.8 percentage points to 15.2 percent, compared to last year. Dealers have also trimmed their expenses by 17 percent, with spending is down in all expense categories.

However, with net profits down about a third, Spader said businesses need to be concerned.

“The average net profit earned in 2009 was 37 percent less than the net profit earned in 2008,” Spader said. “With only the month of December remaining (typically a loss month for most dealers) the average dealer reported a net profit of 1.7 percent of sales, well below the Spader survival net profit of 3 percent.”

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