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Boat Dealers Face Tough Economic Times

Friday, July 11th, 2008

Boat dealers are continuing to struggle with the economic downturn. According to Spader Business Management new unit sales dropped 31.0 percent in the January – April time period this year compared to 2007. Used boat sales didn’t suffer quite as badly dropping 22.2 percent. Overall total dealership sales are down 24.2 percent for the January – April time frame compared to 2007 resulting in an increase in net loss of 476.3 percent.

In order to survive the current economic downturn dealers are cutting expenses. New unit inventories have dropped 1.9 percent. Despite those efforts expense have still increased 12.2 percent as a percentage of gross margin as boat buyers continue to bargain hunt reducing overall profit margins.

The increase in buying power is good news for prospective new boat owners but it will continue to put pressure on boat dealers and manufacturers as evidenced by the recent layoffs at Tiara Yachts, Chris-Craft, and Century Boat Co. The hard times appear to be here for a while. Tim Condor, Wachovia Capital Markets analyst, believes the first signs of an upturn in the U.S. marine industry won’ t be seen until 2010.