As we continue well into the second half of the 2016 boating season, I’m seeing strong demand from customers, not just here in the Wilmington area, but also in the boating industry nationwide. Several factors are driving this, including continued low interest rates that make financing easy.
I recently read a very encouraging report by a company called Longbow Research. The report focused on one of MarineMax’s key suppliers, the Brunswick Company, the parent firm of such industry-leading brands as Boston Whaler and SeaRay, as well as Mercury outboard motors.
At the end of the June 2016 second quarter, retail boat sales nationwide were up in “high single digits,” according to the report, and dealers were expecting this to continue, with growth even into double-digit territory for the remainder of the year. Likewise, dealer inventories at mid-year were lower than expected, a sign of strong consumer demand. In fact, most dealers reported selling out of all 2016 models while awaiting shipment of the new 2017 model-year boats in July.
One interesting trend the Longbow report mentions is sales of used boats were a bit soft this year - because of customers’ strong demand for new boat models. That’s directly tied, of course, to the availability of excellent financing terms, made possible by continued low interest rates in the U.S. market.
Are buyers choosing new over used because it’s so easy to finance a new boat? Undoubtedly. On the other hand, I’m sure the popularity of our financing packages is also being driven by consumer desire for the excellent new models available this year.
In the Longbow report, dealers said the choice customers have faced this year has been between a new boat and a cheaper used one. “The current low-interest rate environment, combined with recently introduced features/technologies not available in most used boats has made it easier to move customers toward using financing for a new model versus buying used,” the report states.
Just between the April/May period and June, the use of financing by customers nationally grew by 10 to 15 percent. On average, around 70 percent of sales in June were financed, taking advantage of great interest rates, compared to just 55 to 60 percent of sales earlier in the spring.
This report was primarily aimed at advising investors on whether to buy Brunswick stock (Longbow says “yes”). But for me, what’s most interesting is how the relationship among a highly regarded manufacturer, its network of dealers, including MarineMax, and the nationwide customer base is showing up in strong - and growing - sales numbers.
Analysts who wrote the report use a lot of terminology like “cyclical recovery in the boating sector.” That just means that, as the overall economy does well, people are making the decision to enter - or upgrade their position in - the world of boat ownership.
They also talk about how new models from SeaRay and Boston Whaler “continue to resonate with customers.” We see this every day, of course. The way the stock analysts put it is to note “new product introductions driving sales growth.”
Some specifics about brands include strong demand for SeaRay boats, focused on models in the 19 to 35 foot range, with new models being the chief driver for this brand. Those include SeaRay’s new inboard SLX models, outboard Sundeck models and SPX models, which have been extremely popular this year. That has meant buyers are fairly well balanced between outboard motors on the smaller models and inboard/sterndrive models, typical of the larger boats.
Boston Whaler has been second to SeaRay in sales growth through mid-year, with many dealers around the country running out of inventory because of strong customer demand. Strongest demand nationwide has been for Boston Whaler’s models sized 23 feet and larger. The dual-center console Outrage and Vantage models have been especially popular.
And while the national trend has been a bit stronger for those bigger boats than for Boston Whaler’s smaller models, Longbow reports that “the brand has competitive product in every boating segment.”
For those of us who operate in saltwater, Mercury’s 350 to 400-horsepower Verado engines have been top sellers.
The national numbers aren’t in yet, but we expect the new 2017 model-year inventory we started receiving in July will prove even more popular with buyers.
So putting all the jargon and insider-speak aside, what does this mean?
It means the remaining months of 2016 are a great time to find outstanding value, on great financing terms, for new boats of every type. There’s still plenty of time to get on the water this season and, of course, to be ready to go as soon as the water warms up next spring, too.
Thom Cross is the general manager of MarineMaxWrightsville Beach. Headquartered in Clearwater, Florida, MarineMax is the nation’s largest recreational boat and yacht retailer. Focused on premium brands, MarineMax sells new and used recreational boats and related marine products and services as well as provides yacht brokerage and charter services. For more information, visit www.marinemax.com, find us on Facebook at www.facebook.com/MarineMaxWrightsvilleBeach or call (910) 256-8100.
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