Most boat dealers say they are ordering fewer 2009 models than they normal would, while at the same time most manufacturers have cut production to handle the reduction in orders.
“Their inventory levels have built up,” said Phil Keeter, president of the Marine Retailers Association of America. “Back in March and April, when they were selling a little bit of stuff it looked like levels weren’t going to be too bad, but then when we kept getting flatter and flatter and flatter, then the inventory that looked like it was manageable at one point in time, now that inventory is larger than what it needs to be.”
Some dealers are ordering up to 40 percent fewer units for the new model year. Even those dealers who say their current inventory levels are acceptable, are purchasing fewer 2009 models.
“The situation the marine industry finds itself in is not one that happened overnight,” said Larry Russo, Sr., of Russo Marine, a Sea Ray and Boston Whaler dealer in Massachusetts and Rhode Island. “If dealers have been paying attention to the changing times starting three or four years ago, they would have ratcheted down purchase commitments to ensure that inventory levels would meet demand and not exceed demand.”
Even so, Russo said he expects to order about 20 percent fewer 2009 units than he purchased last year, despite experiencing a 33 percent increase in business over last year.
Tom Stidham, of Norris Marine in Norman, Okla., sad his inventory levels are “within the acceptable range,” adding, “If I have one (boat) I have one more than I want this time of year, but we’re on par with prior years.”
Stidham, who sells Bayliner, Tracker and Crownline, also ordered fewer 2009 models this year, and said he’s still selling mostly 2008s at this point.
Alan Bohling, of Seattle Boat Company, said that the region one does business in has a large effect on their inventory situation. The Seattle area, he said, had cool weather through June, which is normally a peak selling season.
Due to a “perfect storm” of cool weather, high fuel prices and the general economy, Bohling said his business was off by 40 percent this year – even with adjusting his orders down 25 percent. That’s an unprecedented drop for him.
Therefore, he too will be ordering fewer 2009 models.
Even Clearwater, Fla.-based MarineMax, the nation’s largest boat retailer with 88 retail locations is drastically reducing orders this year. In a July conference call with analysts, company executives said they planned to order about 40 percent fewer 2009 models.
Most dealers said they were not feeling pressure from their manufacturers to take on more units than they wanted, though Keeter said he’s heard of the opposite scenario as well.
“(Manufacturers are) doing the same thing we are,” Stidham, in Oklahoma, noted. “They’re trying to make an inventory correction so that we don’t get this thing totally out of balance.”
Russo, the Sea Ray and Boston Whaler dealer, praised Brunswick for shutting down plants this summer to clear out the pipeline.
“Anytime a company can shut off the supply faucet, the marketplace benefits by that because it gives everyone a chance to catch up,” he said. “If they didn’t do that, they’d be sitting with way too many boats trying to force them down our throat.”