Those that have followed my posts know I have a good friend thinking about getting into the boat manufacturing business by buying out a fairly well known brand name from Genmarc as they go through their reorganization. (Chapter 11)
Yesterday a rep from Genmarc met with a number of dealers in the area to discuss the future of boat manufacturing and sales on the dealer side. My friend was invited to sit in and I tagged along to see what I could learn.
Some good, some not so good...
On the good side, if you go to a dealer today and buy a new boat from current inventory you can expect (haggle) a 20% - 30% discount from the list price for the average boat. Boats with all the extras (fat profit margins) are seeing discounts as much as 50% when dealers are really hurting or when its sat too long. (Think 2007 model year.) Genmarc is working with the dealers to try and move current inventories but gave no specifics about how much "help" they are being but I suspect its tied to how many boats the dealer has moved in the past and how much is sitting there on a floor plan.
On the not so good side, there is going to be a move to hold far less inventory at the dealers and instead go more to a custom built to order paradigm. That means you won't be able to test/see the various trim levels of a given boat and may have to visit several show rooms if you want to see what you are getting. Bottom line, the manufactures want to get out from under owning so much inventory sitting in the show rooms. Lead times for delivery may be an issue for the impulse buyer.
What does that mean to the average boater? If you are seriously considering a new boat, do it now while the inventories are there. Once they are gone you won't see the kind of discounting you see right now.
I was also a bit suprised by the news that there will be a push to go back to a lower cost 2-cycle Outboard. From what they were saying, the new EPA rules (pollution controls) are actually favoring the newer 2-cycle engines with computer controled fuel injection and ignition over the heavier 4-cycle outboards. The 2-cycle wins hands down when it comes to HP vs. weight and maintenance. They had a lot of charts and such but the bottom line is they see about a 20% lower cost of purchase/ownership for the average boater.
Another surprise (at least to me) was the desire from dealers to replace the 3.0 Liter Mercruiser with something newer with more power and less vibration. As many pointed out, that engine has remained pretty much unchanged for a lot of years and it isn't very well balalced (no balance shaft) and the dealers get a lot of complaints from new owners about vibration and noise after a short period of ownership.
Another complaint from the dealers was trying to get financing (at a reasonable rate) for buyers. Right now the finance companies are looking for a credit score of 720 or better to finance a boat at a reasonable rate and a reasonable down payment. Large down payments can help offset a lower credit score. Genmarc of course said they believe that financing will become easier as the general economy gets better...
Genmarc is really pushing dealers to become NMMA certified and to adopt the "Consumers Bill of Rights" in their operation. Dealers that do obtain the certification are going to get better pricing in the future. (No word on exactlly what that means in dollars.) The general idea is there are some less than wonderful dealers out there that reflect badly on the brand name and the manufactures want that to change.
All in all, it was an intresting meeting and worth the time.
Yesterday a rep from Genmarc met with a number of dealers in the area to discuss the future of boat manufacturing and sales on the dealer side. My friend was invited to sit in and I tagged along to see what I could learn.
Some good, some not so good...
On the good side, if you go to a dealer today and buy a new boat from current inventory you can expect (haggle) a 20% - 30% discount from the list price for the average boat. Boats with all the extras (fat profit margins) are seeing discounts as much as 50% when dealers are really hurting or when its sat too long. (Think 2007 model year.) Genmarc is working with the dealers to try and move current inventories but gave no specifics about how much "help" they are being but I suspect its tied to how many boats the dealer has moved in the past and how much is sitting there on a floor plan.
On the not so good side, there is going to be a move to hold far less inventory at the dealers and instead go more to a custom built to order paradigm. That means you won't be able to test/see the various trim levels of a given boat and may have to visit several show rooms if you want to see what you are getting. Bottom line, the manufactures want to get out from under owning so much inventory sitting in the show rooms. Lead times for delivery may be an issue for the impulse buyer.
What does that mean to the average boater? If you are seriously considering a new boat, do it now while the inventories are there. Once they are gone you won't see the kind of discounting you see right now.
I was also a bit suprised by the news that there will be a push to go back to a lower cost 2-cycle Outboard. From what they were saying, the new EPA rules (pollution controls) are actually favoring the newer 2-cycle engines with computer controled fuel injection and ignition over the heavier 4-cycle outboards. The 2-cycle wins hands down when it comes to HP vs. weight and maintenance. They had a lot of charts and such but the bottom line is they see about a 20% lower cost of purchase/ownership for the average boater.
Another surprise (at least to me) was the desire from dealers to replace the 3.0 Liter Mercruiser with something newer with more power and less vibration. As many pointed out, that engine has remained pretty much unchanged for a lot of years and it isn't very well balalced (no balance shaft) and the dealers get a lot of complaints from new owners about vibration and noise after a short period of ownership.
Another complaint from the dealers was trying to get financing (at a reasonable rate) for buyers. Right now the finance companies are looking for a credit score of 720 or better to finance a boat at a reasonable rate and a reasonable down payment. Large down payments can help offset a lower credit score. Genmarc of course said they believe that financing will become easier as the general economy gets better...
Genmarc is really pushing dealers to become NMMA certified and to adopt the "Consumers Bill of Rights" in their operation. Dealers that do obtain the certification are going to get better pricing in the future. (No word on exactlly what that means in dollars.) The general idea is there are some less than wonderful dealers out there that reflect badly on the brand name and the manufactures want that to change.
All in all, it was an intresting meeting and worth the time.
