Valdosta Daily Times

Business

May 2, 2014

Still digging out from recession, boat industry focuses on value

- — Luke Hellier and his wife have been shopping for two years for their first boat.

They’ve researched online and shopped Craigslist and auctions. But one place they haven’t set foot is the showroom. “We’re trying to find a deal,” said Hellier, a 29-year-old from Edina, Minn. “We think we can save 20 percent or more from a private seller.”

Used boats have always outsold new, but five years after the recession, powerboat buyers of every stripe are still focusing on value, value, value. Boat manufacturer Brunswick surveyed 15,000 people and found that the majority liked boats but saw cost as a deterrent.

That’s causing manufacturers to rethink the way they do business, including maintaining or lowering the cost of every new boat from entry-level to high-end. Manufacturers are not only offering new boats below the $20,000 threshold, but even under $5,000 in a few cases.

Mark Niforopulos, general manager of St. Boni Motor Sports in St. Bonifacius, Minn., said that he’s been begging manufacturers for years to change their “exclusionist” thinking. “We went through this fancy phase with all these expensive bells and whistles,” he said. “The industry is badly in need of a reset.”

Boat buyers choose used over new by a factor of 5 to 1, a ratio that retailers and manufacturers would like to narrow. In 2007, used boats outsold new by only 3 to 1, according to the National Marine Manufacturers Association.

Part of the reason for new boats’ sinking sales was an abundance of bargains after 35 percent of boat dealers closed during the recession, said Matt Gruhn, president of the Marine Retailers Association of the Americas in Brooklyn Park, Minn.

“There was a lot of repossessed product back then,” Gruhn said. “We hope those days are behind us.”

Recovery continues to ebb and flow. The number of new powerboats sold in the United States prerecession had been cut in half by 2010. In 2013, the number grew to more than 160,000, but it still doesn’t qualify as a recovery.

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