Engineering and technology are pushing the outboard engine category on a trajectory toward even greater market domination
Visitors to the Miami International Boat Show can be forgiven for feeling just a little snow blind this year.
While North America’s largest consumer boat show is always a place to spot emerging trends and glimpse the unusual, the overall consensus is that it was near impossible to walk through this year’s event without noticing the plethora of white outboards at every turn.
Yamaha announced that its refreshed F300 V6 and F350 V8 outboards will now be offered in all-new “Yamaha White.”
Suzuki unveiled new DF25 and DF 30 portable outboards, now available in white. Honda’s newly redesigned BF200, BF225 and BF250 come in a choice of traditional silver or “Grand Prix White.”
And Mercury’s newly updated 200 and 225 horsepower four-strokes come in – you guessed it – white, and no less than three different shades of it at that.
While Yamaha is probably right when the company says that around one-third of new boat customers in the offshore segment want their engines painted white, there’s a lot more going on in the outboard space than just shiny new paint.
Look below the skin and it’s clear that more torque, more features and more high-tech engineering have put the outboard engine category on a trajectory toward complete market domination.
Boating is getting bigger
While it’s difficult to miss the number of manufacturers now offering outboards with white finishes, it’s equally difficult to ignore the obvious fact that boats, and outboards, are getting bigger.
The once-standard 16-foot family runabout with a 50 horse on the back is now much more likely to be an 18-footer with a 90, or even a 115. And in saltwater, the once-ubiquitous 23-foot center console pushed by a pair of 150s is now far more likely to be a 30-plus footer with twin, triple or even quad 300s.
As baseball went through its steroid period, these days boating is also looking thoroughly juiced, with ever-larger hulls pushed by increasingly more powerful outboards.
“If you look at average horsepower growth in the U.S. market over the last few years, it’s increasing by an almost 8 percent compounded annual growth rate,” said Mercury Marine President John Pfeifer. “The average today in the U.S. is 111 horsepower. By 2020, it will be 125 horsepower. It wasn’t that long ago it was somewhere around 90.”
The upshift in outboard power is being driven partly by innovation (outboards have never been so quiet, fuel efficient, compact and lightweight) and partly by broader changes in the overall boating landscape. “With the exception of tow sports, sterndrive and inboard propulsion has still not really recovered from the great recession,” Pfiefer added. “People are now preferring styles of boats, like pontoons or center consoles for example, that typically use outboard power. But they’re not about to step down to a smaller engine in the process. Buyers today are foregoing that 4.3 liter V6 with a sterndrive on it, and now they’re buying a 200 horsepower V6 outboard instead. If I look at our pre-recession business in dollars, we were almost 50-50 between sterndrive and outboard in our business makeup. But today, 85 percent of the market is outboard and only 15 percent of the market is sterndrive. The shift has been pretty dramatic.”
The growth in outboard horsepower is further fueled by the fact consumers view power upgrades as offering considerable added value against a relatively modest incremental cost. For a consumer who’s already looking at spending anywhere from $50,000 up on a boat and engine package, the additional cost for a few extra ponies isn’t seen as a major upsell.
“I think consumers are smart and rational in the new boat buying cycle,” says Yamaha Marine Group President Ben Speciale. “At the point the consumer decides to purchase a boat package, they learn that for another $2,000 they can upgrade that 70 horsepower engine to a 90. At the overall package level, the incremental spend isn’t that much more to gain what can be a significant performance improvement.”
In the saltwater market, boat builders – and well-heeled buyers – have fallen in love with huge center consoles with multiple outboards on the back, products that not only drive up unit sales, but sales of larger, more profitable units at that.
Triple-engine and quad-engine installations that once garnered ooohs and aaahs at the dock have become so commonplace in saltwater markets that they no longer stand out. When HCB Center Console Yachts launches Hull No. 1 of its new 6500 Estrella model this summer, the 65-footer will not only become the world’s largest center console, it will also become the most powerful, with no less than five 627-horsepower outboards from Seven Marine strung across its transom, generating a combined 3,135 horsepower. Yet HCB’s Estrella announcement didn’t raise that many eyebrows in an industry that’s grown accustomed to seeing multiple massive outboards on the back of big open boats. The image of multiple outboards on offshore boats has become so ingrained in the boater’s psyche that imagining five oversized outboards on a 65-foot center console comes far more naturally than imagining the same boat with five inboards or sterndrives.
The growing demand for engines
But it isn’t just the offshore segment that’s propelling outboard sales. The fast-growing pontoon category is also driving demand for big outboards as these vessels grow in size and weight, and require greater power. “The pontoon market is very important for us, both in terms of units and dollars,” said Tracy Crocker, senior vice-president and general manager for Evinrude. “For a while now the trend has been for performance pontoon boats to make use of larger, more powerful outboards, and now we’re seeing boats with twin engines or even triple engines becoming more prevalent – to the extent that when we launched our iDock system, we made a point of making sure one of the boats we demonstrated it on was a pontoon with twin 300s. Twin engines on a pontoon boat is quite something, I had a chance to experience one in Minnesota and I found myself driving it like it was a jet boat.”
The growing demand for outboards has been given a further boost from an unexpected source – manufacturers of traditional sterndrive-powered runabouts. As these builders have expanded their product lines by adding outboard-powered models, the demand for outboard power has grown even more.
“I don’t think there is a manufacturer of sterndrive or inboard-powered day cruisers or express cruisers out there that isn’t changing its line to incorporate outboard-powered models,” said Gus Blakely, vice president and division head, marine, Suzuki Motor of America. “You look at Formula, Monterey, Regal, Stingray, Chaparral or Sea Ray, for example, there are a number of builders that used to be primarily inboard and sterndrive builders that have expanded with outboard models. Honestly, there isn’t a week that goes by that we don’t get a call from a boat builder looking for information on our DF350. They have a lot of experience with the contra-rotating props on the Volvos and the Bravo Threes that they’ve been using for years, so our new engine feels familiar and has a lot of appeal for them.”
Still another factor propelling demand for new outboard motors is plain old product obsolescence. Technical innovations in today’s latest engines deliver attractive features beyond improved fuel economy, low emissions and reduced maintenance requirements. Buyers are happy to pay for practical innovations like built-in hydraulic steering, automatic trim and digital shift and throttle.
Accordingly, the repower market has begun to emerge as another important driver of outboard sales, and the consensus is that dealers who are not aggressively pursuing repower business are missing out.
“The repower business has been steady for us,” said Crocker. “All boaters want the latest innovations like power steering and automatic trim and joystick controls, even if they’re not necessarily in the market for a new boat. Our iDock system is obviously a big part of that, if someone is already looking at upgrading their old engines they can add joystick functionality for such a small incremental cost, it’s a no-brainer.”
Repowering an existing boat also brings additional capabilities in terms of overall electronic integration. Whether it’s as simple as displaying engine data on an onboard multi-function screen, or working with remote management apps to track operational data that can be used to diagnose and problems or simply keep ahead of scheduled maintenance, electronic integration is an important consideration for repower customers.
Growth across the board
While much of the focus on the outboard engine category is on big engines and high horsepower, it would be wrong to believe there’s nothing happening in the mid-power and portable segments.
“The reality is that it’s difficult to find an area of the outboard market where sales have not been increasing,” said Will Walton, assistant vice president at Honda Marine. “We’re seeing steady demand for everything from the largest to the smallest engines that we make. Every segment of the boat industry is increasing and growing, from big saltwater offshore boats to mid-sized freshwater fishing boats to small watercraft like canoes, and that’s a great position to be in because the demand is coming across a wide spectrum of buyers. If anything, that to me is the strongest indicator that the outboard category is in an extremely healthy position right now. Everybody has benefited from a strong economy as well as an interest in getting back out in the water.”
While Walton acknowledges that larger outboards represent the fastest growth in the segment, he emphasizes that the bulk of the market continues to be founded by engines of less than 200 horsepower. “Most of the talk and certainly the focus has been on larger engines like the 150s, 200s and 250s, and that’s been driven by the strength of the saltwater and pontoon markets,” said Walton. “There is a clear shift upwards in the market, and sales of the extra-large engines are growing at a faster rate. But the majority of sales in terms of overall market volume are still coming from that 100 to 200 horsepower class. It’s still the heart of the market, so we focus carefully on providing the best product throughout the entire range for those customers.”
One reason that mid-range outboards have long represented the sweet spot in the market is that they suit a huge range of freshwater fishing boats, saltwater fishing boats and moderately sized pontoons – three product groups that have all been experiencing positive post-recession growth. “The small stuff is huge too,” Pfeifer added. “In terms of units, the 30 horsepower and under range is just huge. It’s not growing as quickly as mid-range and larger product, but it’s still a significant market.”
Buyers want more features
If there’s one trend that’s consistent across all horsepower categories, it’s that outboard buyers all want more feature-rich engines. “We are seeing a measurable upshift toward not only larger more powerful engines, but more feature-rich products that cater to the buyer’s specific boating needs,” Speciale said. “Even in the case of smaller, lightweight aluminum fishing boats with smaller outboards, the market is showing a decided preference toward product with more features. This obviously drives up the cost of the engine, but in reality, it is engines with more features and premium content that sell the fastest. Years ago, I would tell young market analysts coming into the company that about one-third of the engines sold are 25 horsepower and below, another third are from 25 to 90 horsepower and the balance are 100 horsepower and up. This is not true today. Industry-wide, the split is more like 50:50, divided between engines under or over 100 horsepower. This reflects the shift toward more feature-rich products.”
Adding features to smaller engines requires careful balancing, since the resulting incremental price increase can represent a proportionally larger sticker bump at retail. “People will pay for benefits if they understand what they’re getting for their money,” Blakely said. “Case in point – every engine we make from 9.9 to 350 horsepower is fuel injected. One of the realities of boating is that, in some regions, fuel quality can be an issue. Fuel injection is much better at handling those lower quality fuels so the customer isn’t going to suffer from a lack of performance if that’s all that they can get. Beyond that, once you move to fuel injection you have computer control in the engine, so you can take advantage of all the things that a computer can do. For a consumer, it’s easy for them to understand the difference – this engine will run better for me than that engine will, so yes this feature is worth the incremental premium.”
One feature that buyers increasingly demand is the ability to integrate the engine with other onboard systems. “Enhanced digital displays that provide boat and engine system information at your fingertips are certainly a part of that,” Speciale added. “You’re going to see additional integration with smartphones and tablets. Our vision is that, in the near future, these can track scheduled services and record data to help diagnose any problems. As engines become more closely integrated with the boats and their systems, it wouldn’t be unreasonable to expect warranties to develop in accordance with that.”
Engines have user-selectable features, which can be downloaded as desired to a Bluetooth-enabled engine control system via either a direct Wi-Fi connection or through a corresponding smartphone app.
The advantage to these systems, such as Mercury’s Skyhook Advanced Features product, is that they allow users to pay for features they’ll use and skip those they won’t. In Mercury’s case, user-selectable features presently include enhancements such as Heading Adjust ($49.99), BowHook ($49.99) and DriftHook ($449, or $499 for all three).
In this age of mass customization, such platforms may well represent a level of integration that buyers come to expect. “I can’t say yet that they’re impacting sales, but if you look at it as a baseball game, I think we’re only in the first inning,” Pfeifer said. “We’re at the very, very beginning of this next phase of trends in the marine world. But I believe it is going to be the future of how a consumer is able to be engaged with their passion of boating.”
Whether user-selectable feature sets catch on or not remains to be seen, but what is certain is that we’re entering a new age of outboard power where there’s a lot more to these engines than meets the eye.
Indeed, the next-generation era includes massive powerhouses designed to push the biggest new-age yachts, and lightweight portables for the dinghy. The propulsion spectrum possibilities represent some of the most sophisticated engineering yet.
And yes, they’ll probably come in white.