Trends

The last 2 weeks have been a bit slower overall and it could be that fuel price worries are beginning to thin out the herd. Just yesterday I noticed in the narrows a jump at thePineyNarrowsfuel dock from $3.62 for diesel and $3.89 for gas to $4.08 for diesel and $4.32 for gas. The Narrows typically is pretty competitive for fuel so I suspect that places like Skipjack andGeoretownYachtBasinmay fast approach $5 a gallon. Does this mean there are no buyers being boats absolutely not it just means that people are going to start second guessing expenses and cost of daily life that make them feel less rosy about a boat purchase. The last time (2008) we had a fuel spike people sat at the docks much more, buyers looked for single engine trawlers, and a general malaise sets in of concern of “what if prices never go back down”. I’m confident we will always have boaters and boats will always be selling but market reactions of boaters will be to spend less and go conservative. This will deeply continue to impact new boat sales far worse then brokerage. The impact of fuel prices has changed the way many auto buyers and manufacturers look at the car market. Ford has been doing very well of late financially and one reason is they went after higher fuel economy across all model lines. You drive your car everyday and every social class is effected in they own a car but its doubtful the boat market can move fast enough to make fuel economy a selling feature as boats that go more than 20 knots and are bigger than 30’ can only be so efficient. Sustained high fuel prices would certainly mean less people boating and less places people with boats would be taking them.

Speaking of new boat sales in looking at trends from 2003-2006 compared to today its stunning how some segments of boat classes have almost disappeared. Aft Cabin Motor Yachts specifically almost fail to exist anymore. Take a look at Sea Ray or other production builders (Cruisers, Silverton etc.) and you will notice what used to be strong products in all companies lines have vanished. Sea Ray does not even make an Aft Cabin Motor Yacht style boat and those who still offer one or two have seen this market segment all but disappear. Yet on theChesapeakethere are hundreds maybe thousands of late model 35-48’ Aft Cabin boats out on the water. In express boats the shift went from radar arches to hardtops and now to couple style boats that all but eliminate canvas. This progression is more evolutionary and makes sense but again increases the overall cost and its proving hard to make a coupe express boat under 38’ look right stylistically. Bow Riders and small runabout boats have remained good sellers and have not changed much along the way but there is only so much you can do to a 20-25’ boat. One factor that industry sources have highlighted and its true is that boat dealers and distributors have gone out of business at a tremendous rate yet boat brands have not shut down or consolidated at as fast a rate. The factories either shut down production or furlough the workers yet the brands are still in production of some sort. Just look at center console boats and you ask yourself how many different brands of 25’ Center Consoles does the market need yet I can name 20 of them without too much effort.

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