Dealer Inventory Beginning to Get in Balance

According to Thom Dammrich, president of the NMMA, only 135,000 new boats of all sizes were sold at retail this year, down from over 400,000 just a few years ago. Of the 135,000 sales, about 82,000 were “non-current” inventory, which means that they did not have 2009 HIN numbers on their transoms. All of this means that dedicated boaters are still buying in the middle of the Great Recession, they are getting great deals on merchandise, and inventory is heading back to a more normal balance. Our own spot checking around the country with dealers indicates that in many sought-after brands, you may not be able to find the specific model you want in dealer inventory and it will have to be ordered. (Non-current models are often great deals.)

Only 53,000 new boats of all sizes were shipped to boat dealers this year, which is about 17% of what was shipped 3-4 years ago.

Soundings Trade Only industry magazine recently published the results of an RBC Capital Markets survey of boat dealers. This study indicates that dealers are in far better positions, generally, this year than they were in the fall of 2008, when the financial world almost melted down. According to the survey, fewer than 7% of the dealers responding stated that they had “way too much inventory,” as compared with 16% a year ago.

Another 21% of the dealers said they still "had too much", down from 34% a year ago. Interestingly, 17% of the dealers said that their inventory levels were now “way too low.” 35% of the dealers said that their inventories are currently “about right.” That means half feel they are too low or about right.

So, roughly speaking, 1/3 of the dealers are still over-stocked, 1/3 are under stocked, and 1/3 think their inventories are about right.

Still a Buyers Market

NMMA President Dammrich and other industry observers are not forecasting large sales gains in 2010, and most prudent industry veterans are banking on sales of about 135,000 to 150,000 in 2010. Most of these sales are for very small boats. Only about 33% of all boat sales are for units 21’ or larger, which means last year only about 45,000 boats 21’ or larger were sold new.

With industry-wide production at just 53,000 units this year and factories closed for much of the year, or on skeleton staffs, most observers are predicting only a modest increase in boat production for 2010 to further improve the balance of inventory in the field.

All of this means that for the short run at least, boat companies will be building to order and there will be very little building for inventory. We advise consumers planning on a new boat for next season to zero-in on the desired boat now, so that you won’t be forced to buy whatever is left in May.