Buckley targets key industry weaknesses

By Michael Verdon / IBI Magazine

At the IBI and ICOMIA-sponsored Breakfast Briefing this morning Brunswick Chairman George Buckley described a marine industry "in crisis" and one that is "potentially dying."

"Some of the things I say might seem provocative," he told the packed audience. "But I also want to talk about how Brunswick is trying to work on these issues."

Buckley said that Sea Ray recently undertook a survey of owners and found that about 40 per cent were new to boating. Buckley compared the Sea Ray survey with unit sales numbers from 1990, the US marine industry's strongest, and 2003, which was down about 30 per cent, and "came to the conclusion that the industry is losing customers."

He said that "poor customer service, no end-to-end warranties," trouble with access to water, and unreliable products have caused consumers "to leak out of boating."

"We have to build more reliable products, develop end-to-end warranties and find way to reach down and make less costly products," he said. Taking as an example US Marine's latest Bayliner 175 and 185 models, built at Brunswick's facilities in Mexico, he said that these boats have allowed dealers to maintain margins of 20 per cent even at a low price break, generating massive first time user interest.

During his speech, Buckley said that the marine industry must begin to embrace dealers who are "frustrated with what they see as a hands-off attitude by OEMs." He said that the OEM-dealer relationship must be based on "predictability, loyalty and security."

Brunswick, said Buckley, has embarked on a long-term strategy since 2000 on improving its products, "getting distribution right," both through its evolving retail network and parts and accessories network via its distributor Land'N'Sea. He also said that Brunswick was planning to expand its purchase of marinas and funding the expansion of existing facilities, as a part of its policy of providing a total experience to the customer.

In the future the Brunswick chairman predicted "fewer, larger and more competent players," though he said the consolidation would be mainly "boat-related." He also sees more integration of electronics and other accessories at the factory, and therefore a "shrinking aftermarket."

Ultimately, Buckley asserts, Brunswick's strategic direction is not about vertical integration. "It's about doing what is right for the consumer to change behavior so they will continue with boating," he said. "In the next 10 years, consumers are going to demand improvements in boats or they're going to leave."

(16 November 2004)