Boat sales continue to drag in third quarter
Nov 22 2011 in Business of Boating, Currents by Deborah Bach
Despite some encouraging signs, the region’s boat dealers and brokers continue to struggle, with new boats sales remaining especially elusive.
The number of new boats sold in Washington state during the third quarter of the year was down 5 percent over the same quarter last year, translating to a dollar value drop of $3.7 million, or almos 15 percent.
And while the number of used boats was up almost 14 percent, their total value was down 3 percent, or $860,000.
The numbers follow a quarter that seemed to suggest that the industry might finally be on the upswing. New boats sold during the second quarter of 2011 were up 4 percent, or $4.5 million, over the same period last year, while sales of used boats were down less than 1 percent.
At September’s Boats Afloat show on Seattle’s Lake Union, brokers and dealers reported a positive show overall, with attendance up and numerous sales of new boats. But with unemployment remaining stubbornly high and the national economy growing at a slow pace, many would-be boat buyers seem reluctant to take the plunge.
John Thorburn, vice president of communications and marketing for the Northwest Marine Trade Association (NMTA), said the fluctuating sales numbers point to an industry that is still trying to recover.
“It seems like every quarter there might be pockets of growth, and then that’s followed by a quarter in which that pocket didn’t grow and some other pocket did,” he said. “I feel like we’re still somewhat skipping along the bottom.”
Thorburn said Washington’s boat brokers and dealers are experiencing the same struggles faced by their counterparts in other parts of the country.
“We’re not really hearing anything new,” he said. “The story seems to be the same – I think we’re all waiting for some consistent signs of improvement.”
Melissa White said on November 27, 2011
Another factor in Washington State is the sales tax. We’re in the market for a blue water capable boat, but having to pay almost 10% sales tax on a purchase makes a huge difference to us. It makes it more likely that we will have to buy a cheaper boat and do most of the work ourselves. In addition, it’s hard to find bank financing for older boats, the only ones within our reach with a kid in college and without selling our home. That means we’d probably have to finance the boat ourselves by borrowing against our own money. If these things get in the way for us, they get in the way for others, too.
Bill said on November 24, 2011
As you know many people are buying their first boat or looking to move up. If you read the brokerage listings it reads like a foreign language. NO ONE can understand one brokerage terms from the next brokerage terms. Every boat/yacht magazine should have a list of abbreviations on the first page of the brokerage listing section. What is a convertible? What is a sportfish? What is a RPHMY? Is that different from a FBMY? What does TD mean? What is a central listing agent and why should I care?
The local and national boat brokers/sellers make it too difficult to get into the boating. You are alienating the buyer BEFORE he/she even begins. They walk away and buy a vacation home.
Have the local/national magazines refuse to take any more brokerage boat “For Sale” ads if they do not include a price! Make the agents include the asking price. How many homes would realtors sell if they never gave the price? Is this a game to see if we can make the boat brokers telephone ring?
NO ONE has time for this anymore. You are making the BUYER frustrated with the constant games. Give me the web site address of the boat and get out of the way. Welcome to the new normal! Stop with the teaser ads and NO PRICE…You are just making the buyer go to the next ad that does tell him/her what he needs to know.
Finally the boat brokers need to stop laying out their ads so that the brokerage firm takes 25 to 33% of the space on the page. I am not buying the brokerage! Sell me the boat, print more info about the boat and less about your darn brokerage….
Signed a Very Frustrated Buyer
Chuck Gould said on November 23, 2011
People buy boats using disposable (or easily replaced) money, and when they are feeling confident about the future.
Boom times will return when the current unemployment rate drops by about a third, when wages are not as stagnant, and when the values of single family homes increase to a point where second-mortgage money becomes available for purchases or large down payments. Despite the claims that “fuel is the cheapest thing you will ever put into a boat” (and that’s likely true), greater stability and predictability of fuel prices would especially help the powerboat market. Some level of near term recovery is almost certain, but it will be a while before it again seems like 2007.
From a long term perspective, new boat manufacturers need to address a demographic challenge. Younger people seem to have a lower level of interest in boating (as well as in marriage, home ownership, long-term career employment, etc) than previous generations did at similar ages.
College graduates are experiencing greater difficulty in converting college degrees into jobs with potential for growth to a professional income level, and that’s a factor that affects all high-end discretionary spending.