Since the very beginning the personal watercraft industry has bucked convention and marched to its own drummer. Back when boats all followed fairly conservative designs, personal watercraft exploded onto the scene with brilliant colors, bold graphics and a huge, motorcycle-like emphasis on matching clothing, wetsuits and more.
As those initial PWC buyers began having families and the expectation was that they would “move on to a real boat,” watercraft manufacturers responded with luxury touring models and three-up family sportsters that could easily pull a wakeboarder. And as boats keep getting bigger and more expensive, the personal watercraft industry has gone the other way with innovative models designed specifically for price-sensitive,
The PWC camp has never followed the mainstream, and it is precisely that rebellious approach that has served it so well. Like the rest of the recreational boating industry, it too has experienced its ups and downs. But the ups have generally outweighed the down cycles, and over the past three years in particular, wholesale shipments have been exhibiting steady, sustainable growth.
According to the National Marine Manufacturers Association, over the past three years new unit retail sales of personal watercraft have consistently outperformed total powerboat sales. In 2016 the PWC segment posted an average of 7.4 percent growth, compared to 6 percent growth for all other types of powerboats combined. In whole numbers, NMMA pegs annual sales of new personal watercraft at nearly 60,000 units, representing almost 24 percent of all new powerboats sold. Further, each year U.S. dealers sell an additional 130,000 personal watercraft on the pre-owned market.
Sales in Florida account for 14.3 percent of total personal watercraft sales, according to NMMA, followed by Texas with 8.9 percent of the market. But that Southern stronghold is starting to face some stiff competition from Northern markets. NMMA notes that Michigan represents the third-largest PWC market in the country, accounting for 5.6 percent of all PWC sales.
Michigan-based Statistical Surveys, Inc. supports that contention, noting that the Detroit Basic Trading Area demonstrated the second-strongest growth in PWC sales in the country last year, with a year-over-year gain of 25.38 percent. The only BTA to top it was San Francisco-Oakland-San Jose, with a massive 43.26 percent sales jump in 2016. Other strong results in Northern markets were reported for the Philadelphia-Wilmington-Trenton BTA, with a 22.09 percent year-over-year gain, and New York City, with 2016 sales up by 20.9 percent.
SSI’s national numbers closely echo those of NMMA. SSI reports total 2016 sales of personal watercraft at 57,274 units, which represents a 7.54 percent gain over the 53,254 units sold in 2015. Those are solid numbers, particularly for a market segment served by only three players. According to SSI, Sea-Doo currently enjoys 54 percent market share in the PWC space, followed by Yamaha with 40 percent and Kawasaki holding a 6 percent share.
An entry point into boating
With their low prices compared to traditional powerboats, personal watercraft have long been seen as a gateway product to bring new people into recreational boating.
According to Info-Link, the average price in the United States today for a new personal watercraft is $11,000, while the average price of a pre-owned unit is just $2,600. New models that specifically target price-sensitive buyers, like the Sea-Doo Spark and Yamaha’s EX Series, still retail for under $7,000.
“The used market seems to be shrinking a little bit because the new product is inviting enough to entice buyers to make that jump, while financing on new product is extremely attractive,” said Brian Seti, general manager, sales and marketing for Yamaha Motor Corp. “At the entry-level we have our new EX series, which is designed for the new customer and starts at $6,599. It features our SSC hull and deck, it’s stable, it has a nice large gas tank so you can cruise all afternoon without having to refuel, and it has an engine that’s powerful enough to pull three passengers or haul someone on a tube.”
While Sea-Doo made a lot of waves in 2014 when it launched its Spark with a $5,000 retail price tag, marketing and advertising spokesperson Tim McKercher says the selling price is only part of its appeal to younger buyers.
“Obviously the price of the Spark makes it affordable to price-conscious buyers and younger families that are just starting out and having kids,” he said. “But there’s a lot more to it than that. The Spark appeals with its compact size and light weight. It’s easy to store, and you don’t need an F250 to tow it. But most of all, it’s just a whole lot of fun to drive. Honestly, it doesn’t matter what price you put on a personal watercraft, no one is going to buy it if it isn’t fun to ride. But the Spark is small and light, with an excellent power-to-weight ratio. It’s very accessible, so it opens the door to a whole new generation of consumers.”
That new generation of personal watercraft buyers is already making its presence felt on the sales floor. Where Baby Boomers remain the largest buying cohort in the personal watercraft category, they’re steadily giving way to Millennials.
“Before the Spark the average age of a personal watercraft buyer was 48 years old,” said McKercher. “When EPA regulations drove the move to four strokes, the engines got bigger and heavier, and the units got bigger and heavier. Comfort came more into play, and the prices kept getting higher. That was fine for serious riders who have the means, but it was making it more and more difficult for new riders to get into the sport. The Spark changed all that, by allowing us to offer a product that Millennials could see themselves owning and riding. It’s built and looks the way it does because it had to be different, it couldn’t just be a smaller version of what we already had. It needed to catch the eye of new buyers, because the buyer of the Spark is much younger than the buyer we had before.”
The performance segment
While much has been said and written about the need to make boating more affordable, it still has to be fun. From the moment that Kawasaki let it be known that the company was bringing back its iconic stand-up Jet Ski, the personal watercraft community has been buzzing with rumor and speculation. The buzz reached a crescendo in October, when the company publicly debuted its 2017 Jet Ski SX-R stand-up at the IJSBA World Finals on Lake Havasu.
“We’re really excited about the SX-R,” said Dave Oventhal, Kawasaki’s senior manager, market and product strategy. “We feel that it’s going to bring back a lot of experienced watercraft riders, and we can see it’s drawing a lot of enthusiasm from new riders who just aren’t excited by any of the sit-down models. At Havasu we had a 65 year-old lady riding the SX-R, and if you could have seen the smile on her face, and the fun she was having, it was just incredible to watch. It’s definitely a model for all ages, and it’s so rewarding to see the excitement and enthusiasm among riders when they try it.”
The SX-R is at once familiar to former stand-up riders, yet profoundly new all in the same breath. Powered by the same 1,498 cc four-cylinder engine found in the company’s STX-15F, the new four-stroke generates approximately twice the power found in Kawasaki’s last stand-up model.
“There really is nothing else like it,” said Oventhal.
Yamaha is also finding new performance with a nod to the past, as the company revives its legendary GP nameplate in 2017.
“We’re seeing growth at the entry level and through our mid-range models, and some particularly exciting growth in the performance product,” said Seti. “I think a lot of that is tied directly to our new GP 1800 model, which brings back all the rich history of the GP name after it’s been in hibernation for a few years. It really has the best of everything, it has our most powerful engine, it has our new Nanocell 2 lightweight hull and deck, and it really appeals to the racing crowd, every racer wants it.”
The personal watercraft segment seems particularly well suited to welcome the new wave of Millennial buyers – partly on the basis of price and accessibility, and largely on the spirit of being inherently adventurous, fun and exciting. But selling to Millennials isn’t the same as selling to Boomers, said McKercher.
“The challenge is to get them off their smartphones and iPads and video games, and get them to play for real out on the water,” he said. “We need to be able to continue to innovate without letting the prices get out of hand. We need to keep making better product, but also keep making it affordable.”
Enticing Millennials to make that leap from the sofa to the water could prove fairly easy, since many have had exposure to personal watercraft all their lives. Their parents may have had one, or they may have been exposed to them through television. That’s quite different than the Baby Boomers, most of whom had reached adulthood when personal watercraft first gained widespread popularity.
But that doesn’t mean the industry can take the appeal of a PWC for granted. “It’s true that personal watercraft are familiar because they’ve been a part of their lifestyle growing up. But we still need to appeal to the way Millennials enjoy their time,” cautioned Seti. “Can they listen to their music? Can they charge their phone? Can they wakesurf? We need to understand that buyer’s psyche and we need to deliver in the fashion with which they would want to use the product. It’s the same way we need to reach them marketing-wise. Millennials consume information much differently than a Baby Boomer does.”
They’re also a lot more closely connected, having been raised in an internet-enabled world. That Millennials gravitate to internet-based communities which transcend traditional geographic boundaries isn’t lost on personal watercraft manufacturers.
“We’re working hard to grow the market through a stronger dealer network, not just in the States but internationally,” said McKercher. “China is the biggest emerging market, and it’s a bit of a gold mine for Sea-Doo right now. It’s getting very big very fast.”
“All of the manufacturers are getting more aggressive with new products and trying to reach new buyers,” said Oventhal. “The innovation in our industry is tremendous, and it has to be that way. There are so many other options for entertainment that compete for our buyer’s time and attention. As an industry, we need to make riding a personal watercraft exciting and fun. Sales are good, so I think we’re being successful in that.”