New boat sales were strong in the first quarter, but question marks around the high-profit sterndrive and cruiser segments remain.
First-quarter retail sales in the US show continuing growth across almost all powerboat segments, with a possible bottom for the sterndrive segment.
Data from Info-Link and Statistical Surveys Inc (SSI) for the first three months of 2016 show continuing growth after an 8% gain in overall new-boat sales in 2015. Unit sales of new boats have rebounded 30% since hitting the bottom in 2010.
SSI reported that 19,340 aluminium boats above 15ft LOA were sold in Q1 2016, compared to 17,418 for the same period a year ago. For fibreglass, unit sales were 21,433 and 19,525, respectively. Info-Link does not release unit sales, but its chart shows that 10% growth for the first quarter across all powerboat segments. The outboard boat segment was up 10%, while the ski-boat sector rose almost 15%. The saltwater fishing boat segment was up 5%. Even sterndrive sales were up 7% for Q1, the first quarter where I/O sales have not declined since 2008.
“Hopefully we’ve reached the bottom on sterndrives,” says Laurent Fabre, president of Beneteau america, which owns the Four Winns and Glastron brands. “I don’t think it will be a tremendous rebound, but the freshwater boat market, which includes most sterndrives, has seen a good season through the first half of the year.”
Rebound on the way?
Whether sterndrives have actually bottomed remains to be seen. In 2015, about 13,000 new I/O-powered boats were sold in the US, compared to 72,000 in 2005. Looking at it another way, shipments from engine makers to boatbuilders have moved from more than 100,000 in 2006 to about 15,000 today. according to a recent paper by Sun Trust Investments, the decline severely impacted Brunswick Corp, which counted on sterndrives to provide about US$2bn of 2005 total sales, compared to about US$700,000 today.
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Huw Bower, president of Brunswick’s Boat Group, said that sterndrive models with the Sea Ray and Bayliner brands have seen renewed life. “The growth is coming mainly from the smaller runabouts, rather than larger cruisers,” he says. “This growth has come from a strong focus on the segment. Sea Ray has introduced six new models in the last year. We’ve put a lot of innovation into the new models and mercury’s new 250hp engine block is also providing strong value.” Despite the gains, Bower says he is not yet “calling the bottom” on sterndrive sales.
Rob Parmentier, president of the Marquis-Larson boat group, thinks the I/O gains are an aberration. “I don’t think the sterndrive gains are sustainable,” he says. “Not enough has changed on sterndrive platforms to attract the Baby Boomers, who make up the lion’s share of boat buyers right now.”
Parmentier thinks that “ease of use” has become a primary consideration for US buyers, which explains the ongoing boom in pontoon boats, the only category to have reached pre-recession unit sales, as well as consistent sales gains in saltwater fishing boats. “The outboard technology is so much more advanced that buyers are now using these boat types as SUVs,” he says. “Operation is quiet and the cleanup is a breeze. We keep asking ourselves when the pontoon bubble is going to pop, but it just keeps going.” Pontoon builders Tracker, Bennington and Alumacraft were the top three builders across the aluminium segment last year.
Note: This is an excerpt of the country report published in the June/July issue of IBI magazine. IBI Plus subscribers can download the full report from our website.