If you think of a boat as an awfully expensive toy, well, some folks in the marine industry would like it to be more affordable.
For Brunswick Corp., the nation’s largest recreational boat builder, that means every new model should cost the same or less than the model it replaces, a big change for the company and the industry, Dustan McCoy, chairman and chief executive officer, said this week.
Brunswick is the parent of Mercury Marine, a Fond du Lac, Wis.-based manufacturer of outboard and stern-drive boat engines. The Forest Lake, Ill., company has nearly a dozen boat brands, including Bayliner, Crestliner, Lund, Lowe and Sea Ray.
A few of those models cost hundreds of thousands of dollars. But even at the high end, there’s more emphasis on reducing the price so that people will buy new boats rather than used ones, McCoy said.
A great majority of 15,000 people surveyed by Brunswick said boating was a desirable pastime, but the cost was troublesome.
“People still want to boat, and they’re always looking for a different boat, but they’re not buying new right now because they think the cost vs. the value they receive is out of whack,” McCoy said.
That’s backed up by industry numbers. Before the recession, the powerboat industry was selling about 800,000 used units a year and 300,000 new ones. Since then, used boat sales have remained about the same or have increased, while sales of new boats remain well below levels seen before the recession.
The introduction of fresh designs and new technology will help curb the sales decline, according to McCoy, as older boats won’t have those features.
Reducing the price also will help, especially through successive model changes over a period of years.
Brunswick has introduced a 35-foot boat with a better design and new technologies, including joystick docking controls. The new model is priced less than the model it replaced, and buyers have flocked to it, McCoy said.
“We had to triple our production that we initially planned,” he said.
Brunswick has made many changes, including building different models on a similar platform.
The company wants to give buyers the content they want without having hundreds of options, which add to the company’s costs. Thus far, it’s worked even with the most expensive boats, McCoy said.
“We introduced our 65-foot yacht at the Fort Lauderdale (Fla.) boat show and sold out our 2014 production,” he said.
Leading the industry’s growth are small fiberglass and aluminum outboard powered boats 26 feet or less in size. Pontoon boats also have sold well, largely because they appeal to families and first-time boaters.
While some people will always buy a boat loaded with every option and the most powerful engine, others are satisfied with a few less horsepower and a lower price, said Todd Riepe, general manager at the SkipperBud’s boat dealership in Pewaukee, Wis.
Brunswick stands out for replacing older model boats with less expensive new ones, according to Riepe.
“That’s not something we have seen in this industry, ever,” he said.
Gradually, the boating industry is adjusting to a new economy, said Charles Plueddeman, a freelance marine writer from Oshkosh, Wis.
“A boat is a very discretionary purchase. You can buy a new Harley-Davidson and rationalize it because it gets better mileage than your car when you ride to work. Not many people can boat to work,” Plueddeman said.
For many people, fixing up the boat they own has been an attractive option to buying a new one.
“In the past, these customers may have replaced their entire boat. In the new economy, replacing the boat is not an option, but perhaps replacing the motors is feasible. These new motors do not require digital controls and instruments, and they fit on the same transom mounting holes as older motors,” Plueddeman said.
Makers of personal watercraft, such as the Sea-Doo Spark, also have given a nod to the affordability trend.
At $4,999, the Spark sells for about one third of the price of a more deluxe Sea-Doo. It’s appealing to first-time buyers and people wanting two or more personal watercraft, said Tom Wolf, general manager of Sportland 2, a dealership in Oak Creek, Wis.