Boat Business present and future

I'm no swami, but it's obvious that the boat business as we know it is gone. This could eventually be a very good thing, but short time it looks like chaos will reign.

The medium sized manufacturers will be the ones that take the biggest hits, the small self contained companies (Bass Cat, Allison come to mind) will probably keep on plugging along at their own comfortable pace.

The real change will be the large independent dealers, they are the ones drowning in floor plan right now, with no place to hide it. This will leave two market avenues left, the ginormous Tracker type stores, and the small guy who lives on service and sells a few boats a year.

This will mean the boat companies that survive will have to choose a direction, get in bed with the mega stores, which will cause all manners of problems, or set your sights on the small guys, and become a custom shop that can build on demand.

Neither one of these fits the current champ model, so it will adapt or vanish.

Just wish that this whole bankruptcy would get finished and layout the future of Genmar or the bassboat lines. I dont think i would ever buy a boat from a BPS style dealer. I would prefer small company that cares about its customers regardless of big contingency bucks for fishing out of a specific brand boat..Sure glad I have my Dream Champion now.

[QUOTE=pmgoffjr] the small self contained companies (Bass Cat, Allison come to mind) will probably keep on plugging along[/QUOTE

My respect goes to the companies that continue to do it right through the good times and the bad. Family owned vs. corporate owned or foreign owned. My brand loyalty goes out the door. When I buy a new boat I know who will get my business. http://www.bassboatcentral.com/smileys/USA1.gif

There are only a couple companies big enough to weather this storm IMO.

The really small shops are only surviving because percentage wise, they have cut back less.

I work for a boat company that has only averaged about 3 boats per day. We are still in business but shutdown for the majority of this year. (jan to end of march, and july till now) I've been building odd boats here and there with two other people, which makes for a comparatively slow process but we do what we need too. But this isn't enough work to actually call folks back to work.

Things will start to pick up quite a bit next year I think. The economy is on the upswing, job loss is tapering off, housing slump is tapering off, credit reluctance is tapering off or even over.

The one thing that will hurt boating ESPECIALLY the boating industry I'm in is fuel prices rising with the economy.

Plenty of folks can pay a $500 boat payment on a 80,000 boat, but can't justify paying another 1,000 a month in fuel when fuel is $3+/gallon.

One other thing. This will only HELP to provide better boats. Boat builders have to up their game in order to sell boats. This will mean better built boats, and more standard features. Boat builders are desperate to sell. Selling boats for a little less profit vs not selling boats at all is a no brainer at this point.

In areas with multiple boat builders companies will be able to pick and choose the best employees, instead of just settling for those who treat their job as 'just a job'.
As a department manager my biggest problem was always finding someone who treated their job as more than just a job. Some folks don't gather that while they are only a small contributor to the overall product, they still are performing a vital task, on a product costing as much as, or more than 100K.

Boaters, almost ALWAYS build better boats, and perform better on the job.

Pat said "I'm no swami, but it's obvious that the boat business as we know it is gone. "

I agree! It has already happened to the auto industry, no boma money for the boating industry.

What we the passionate ones need to realize is: A boat is a luxury item no more or less.

The new right sized industry will have a smaller footprint likely to consist of cost effective, fuel efficient models. I reckon we may have a lot of 16-18 foot boats with 60-115HP engines. If you doubt this ask yourself how many folks are buying big SUV's today.

Many product lines are on a death-march for sure!

Future is: lean manufacturing, low overhead, global sourcing, and cost effective materials.

Butch

Pat I beleive you are exactly right. thats why i hope champion goes to an independent owner like they used have as a family such as BCB,Allison,Blazer etc.

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by bassin butch &raquo;</TD></TR><TR><TD CLASS="quote">P


Future is: lean manufacturing, low overhead, global sourcing, and cost effective materials.

Butch


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Companies have been headed in that direction for last 3-4 years. That's not really the future.
Small boats, and premium boats are the future. Fuel efficiency should be as well. For some reason most boat builders have been sitting on their hands for years on this issue though.

Like FEARTHETURTLE210 said


Thank God I have my dream Champ already http://xs-s.com/zf/images/smile/embeer.gif

I agree that the Boat building business is and will continue to be under a lot of pressure (as almost all industries are right now) and that there will be a lot of changes in the future. For me, I will hang on to my 1997 Champ with that gas gussling 200 efi merc. LET THE BIG DOG EAT (gas that is).

i totally agree Pat,i have been in the boat building industry 19 years and i think you are spot on....

I bought my Champ 203 used from a small Ranger dealer. To give you an idea how small, this guy's office was part of his house. He had a very small showroom with 2-3 boats tops and a small shop. For his size he sold alot of boats new and used and provided terrific service. He's one of the nicest guys I have ever dealt with. A couple years ago, Ranger came to him and said you need to order X number of boats per year and keep X number on hand. There's no way he could have done this and after probably 25 yrs of being a Ranger dealer they broke their ties and he is now carrying another smaller brand. I wonder after all this settles out if small dealers like this guy are the ones who will come out on top to your point.

I for one am one of the smaller dealers that Pat is reffering two. Pat and 198 Champ makes a whole lot of sense on this as far as who will be left. Alot of manufacturers turned their nose up to these small dealerships that has been in business keeping a low overhead for years. Greed and bad management now has doomed some. The same manufacturers have realized now that the dealer with the lowest overhead and a proven track record will be the rebuilders in this industry. The dealers that built these Deghtmahall dealerships in the past 15 years and are holding 3 million in aged product with curtailments due will be gone without some very deep pockets. Manufacturers this is not the auto industry and the grass is not always greener on the other side. I for one do not post much here but i do hope Champion does survive i too have a good freind employed. Pat the knowledge you display about this product and the industry leads me to believe you would make a fine Dealership owner. But i can tell you are much smarter than that.

Thank goodness I got out of it before it imploded.

I'm not suited to stare at the same four walls and putting up with the same peoples garbage every day.

http://www.bassboatcentral.com/smileys/popcorn.gif

Banks loaning to any joe blow who came through the doors and wanted to buy something was grand while it lasted and they were able to move huge amounts of product (boats, cars, motorcycles) How long did they really think this would last? In the end greed was the straw that broke the camels back and not just with the boat business. I think I know of a book that talks about greed. http://www.bassboatcentral.com/smileys/wink.gif

I remember when the trend and the wave of the future was super dealerships. I had a small dealer explain it all to me once and he too went with the idea just to stay in business because it was all he had. Of course he is long gone because the area he was in just wouldn't support his business and the huge overhead he was required to keep by this boat company. This all started around the mid 90's.

Funny how things come full circle isn't it. Or in this case may come full circle.

WRONG.

Fuel prices broke boatings back well before the economy completely tanked. If you were in it you saw it coming for awhile, unless you were blind.

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by HydraSports &raquo;</TD></TR><TR><TD CLASS="quote">WRONG.

Fuel prices broke boatings back well before the economy completely tanked. If you were in it you saw it coming for awhile, unless you were blind.</TD></TR></TABLE>

I agree. In talking to some reliable people at a major marina on a well-known lake, I learned that in 2007 the marina business (primarily gas and boat rental) was down 40% and in 2008 business was down another 40% (from the already reduced business of 2007 levels). 2009 was slightly less than 2008 levels. These figures were confirmed by articles I read in a trade journal I receive. You could see it on the lake with the significantly reduced boat traffic. Of course, the sorry state of the economy, including unemployment, reduced pay for those still employed, the erosion of home equity, and big investment "hits", has just amplified the problems in the boating business. Just ask Reggie Fountain.

One can banter back and forth about banks, money system, interest rates, blah blah blah...

The bottom line, the economy is based on our mobility, anything that restricts it will have an effect.

Didn't Champ try going the gander mountain route? Did that help out at all?

http://www.bassboatcentral.com/smileys/praying.gif Champ stays around, I still miss my 1991 184DC http://www.bassboatcentral.com/smileys/crying.gif

Well sounds like I'm getting the Axe.

Unless we sell by the end of the year I'm done. After 10 years.

Oh well it was time to either open the doors and get rolling or time for me to move on.

I don't know what rumors you may have heard, but so far, there has been no official word on any of this!

Wonder if the lack of boaters and fisherman is helping produce larger fish that are less pressured.

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by BassinBarrister &raquo;</TD></TR><TR><TD CLASS="quote">

I agree. In talking to some reliable people at a major marina on a well-known lake, I learned that in 2007 the marina business (primarily gas and boat rental) was down 40% and in 2008 business was down another 40% (from the already reduced business of 2007 levels). 2009 was slightly less than 2008 levels. These figures were confirmed by articles I read in a trade journal I receive. You could see it on the lake with the significantly reduced boat traffic. Of course, the sorry state of the economy, including unemployment, reduced pay for those still employed, the erosion of home equity, and big investment "hits", has just amplified the problems in the boating business. Just ask Reggie Fountain.


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Our lakes are still PACKED! Heck I think the folks drawing unemployment just go fishing in the middle of the week because I can't even get the water alone during the weekdays anymore.

The bass boating industry is still an infant in the business world. I would not count it out just yet. Fishing is still Americas sport when it comes to most participants. http://www.bassboatcentral.com/smileys/thumbsup2.gif

Writing loans for 12-15 years on a boat? That alone was enough to convince me this was going to come crashing to the ground. $60,000 bass boats? 300hp engines?? http://www.bassboatcentral.com/smileys/Laugh.gif

Gimme a break. America has woke up. There are very few that will go out and ever get themselves into the financial hole that an overbuilt bass boat can get one into. Most either won't do it due to memories of this crash or the banks simply will never allow themselves to make such long term risky loans on something that depreciates so quickly and is basically a luxury item.

They're still be companies making top end boats but I suspect the market is about to downsize. Memories of $4 a gallon gas won't go away quickly.

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by Lea &raquo;</TD></TR><TR><TD CLASS="quote">I don't know what rumors you may have heard, but so far, there has been no official word on any of this!

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For my company it's about as official as it gets.....Sell by Jan 1 or we are closed.

Like I said whatever. Other than an opportunity to work with a guy we brought it, I felt it was time for me to move on anyhow.

Pat,

We just happened to catch this thread someone turned us on to. This is a very accurate observation from our understanding of the present situation. Our feelings remain that the present volumes are so light many companies will feel a larger pinch. Though we have long tried to be more present in smaller dealerships, as Pat knows. Our goal is to continue at the smaller independents with less inventory on the floor and more orders. Though we have 0played that way for years. It won't support a multi-million dollar facility, though we have not been bankrupt two or three times.

The marina observation was also a good analogy. This was about the time we found deals being cut at all costs by many of the major players. Of which some are either in bankruptcy or living on corporate dollars. Our position on the economy situation is that fuel went up and the working family needed the money for work and fuel, which left the house payment behind on the over leverage home loans of Fannie and Freddy. Eventually imploding Wall Street from the bottom up. They felt the tier was so high they were insulated and we think the working man took out the banking and credit issues nickels at a time in comparison.

We have been fortunate to keep rolling along and making it on a light pace to get there. Our goal is to just keep plugging along at a reduced pace till we can regroup some and keep building new products. Which we have done both.

Sorry for bustin' in on the "C" board. Y'all are Welcome to visit the Bass Cat forums any time.

BCB

You didn't bust in. You are more than welcome here. Your insight is as valuable to us here in the C forum as it is for the folks in the BCB forum!!!

I just pray it all works out for the benefit of all the folks working in the industry!!!!! http://www.bassboatcentral.com/smileys/praying.gif

Nice to hear from a manufacturer regarding the current boating economic situation regardless of the forum...

Thanks for some insight!

What is the ratio (from a dealer standpoint) of used boat purchases vs new boat purchases with the current economy? Has the used boat market grown over the last couple of years?

I agree, for the avg joe weekend fisherman the 16.5 to 19ft / 90-175 hp market is prime for making a strong presence compared to the 21ft 250-300 hp rigs.

Very useful and interesting information in this thread http://www.bassboatcentral.com/smileys/thumbsup2.gif http://xs-s.com/zf/images/smile/emthup.gif http://xs-s.com/zf/images/smile/emthup.gif

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by Darth VMAX &raquo;</TD></TR><TR><TD CLASS="quote">
Very useful and interesting information in this thread http://www.bassboatcentral.com/smileys/thumbsup2.gif http://xs-s.com/zf/images/smile/emthup.gif http://xs-s.com/zf/images/smile/emthup.gif </TD></TR></TABLE>

Us Champ guys (and gal) are like that http://www.bassboatcentral.com/smileys/wink.gif http://www.bassboatcentral.com/smileys/Laugh.gif

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by Bass Cat Boats &raquo;</TD></TR><TR><TD CLASS="quote">Pat,

We just happened to catch this thread someone turned us on to. This is a very accurate observation from our understanding of the present situation. Our feelings remain that the present volumes are so light many companies will feel a larger pinch. Though we have long tried to be more present in smaller dealerships, as Pat knows. Our goal is to continue at the smaller independents with less inventory on the floor and more orders. Though we have 0played that way for years. It won't support a multi-million dollar facility, though we have not been bankrupt two or three times.

The marina observation was also a good analogy. This was about the time we found deals being cut at all costs by many of the major players. Of which some are either in bankruptcy or living on corporate dollars. Our position on the economy situation is that fuel went up and the working family needed the money for work and fuel, which left the house payment behind on the over leverage home loans of Fannie and Freddy. Eventually imploding Wall Street from the bottom up. They felt the tier was so high they were insulated and we think the working man took out the banking and credit issues nickels at a time in comparison.

We have been fortunate to keep rolling along and making it on a light pace to get there. Our goal is to just keep plugging along at a reduced pace till we can regroup some and keep building new products. Which we have done both.

Sorry for bustin' in on the "C" board. Y'all are Welcome to visit the Bass Cat forums any time.

BCB</TD></TR></TABLE>

Oh no fuel prices had nothing to do with this...

That's what most people believe.

If you were in the boating industry like me, and like you, you should have saw this coming a few years ago.

Fuel prices hurt my corner of the boating industry even more than the B/B market is seeing.

Lonnie,
Not trying to bust your balz or anything but do you work for a Dealer or builder? With a handle of HydraSports just wondering how you ended up on the Champ site? Just wondering. I hope it works out for you, I've been in the industry on and off for close to 35 years.

A boat builder. 10 years.

Jan 1st is probably the end of the line.

I hope to leave with our plant manager/head engineer if we find a quality place in the area.


I found this in the active topics link at the bottom of the main page days ago.

The topic interested me.

Rick,
Thanks for the reply.

It's always interesting to me to see paths being chosen, market plans that work, and those that fail over time. I'm glad you're the one holding chips in this game.

My dad and I were just talking and he heard someone just made a 50mill offer for genmars "total" boat line.

I was in the auto business for 17 years. (the floorplans guys forced me out) I always wondered how the boat business floorplans worked and now although the terms on floorplan seem to be far more liberal with boating it was inevitable that the curtailments and the eventual payoff of these boats had to come.

The is an avalanche that is not done. The dealers that are still out there have a monster coming.
Weakened sales = no cash flow
No cash flow=no ability to pay the bank these curtailments much less pay the whole rig off when the piper comes to visit.

Problem is it looks like the boat manufacturers were either self financing the floorplans or either signed for recourse with their bank of choice they joined hands with and now when the dealer cant pay then,, the manf. is stuck with a 1,2,3 yr old new-non current. Not just his hull but all the goodies..(this looks like where the BK's are coming from in part anyway)

Like bass cat boats said wall street crashed from the bottom up and so the boat manufacturers, Looks good on paper moving all those boats from the balance sheet to the income statement but,, uhoh, they never thought they would see them coming back.

The extended financing that has been aforementioned is a huge catastrophe that the big boys started.. They dreamed that hey! if we finance these boats longer and get the payments down then we can double the markup! Trouble is, the profit went away because with all that money they created a huge overhead because of the desire for (insert here)
Whoohoo, what a concept,, as someone else said here,,Greed is just too much to resist in America any longer
Several dealers are being caught with huge stores of perfectly sized and shaped outboard boxes stacked in there warehouse but, when the bank officials actually started looking inside the boxes......Uhoh no outboards inside.

Now that being said I am not saying that the dealers were stealing the money but rather, they were doing whatever the heck it took to survive, meet payroll, and keep the monster from burying them. Some of them no doubt had ill intent and I get that but, most of the real dealers in America work their humps off to provide a good living. Heck , most of the owners I know got into the marine business because they loved to go and the tradgedy is when they own a store they realize they cant go to the water anymore because they are putting out fires all day.
Sorry, back on point

Over 4000 dealers in the auto business closed in the last 24 months and more will collapse no doubt.

Boy, IMHO you can sure tell who buys into what the media is selling..
The housing market is better? The media would have us believe that sales are up,,,, well hell yeah they are---but,, do you consider the sale of shorts and foreclosures anything that helps the market?
No it helps the banks--(more importantly, the shareholders of said bank)
-courtesy of Tarp. ALSO--most of the large commercial debt for some reason is opting not to foreclose but the property is uninhabited and growing in weeds,, so what is there plan? Eventually you will see another wave of the foreclosures when the shareholders get enough. Why do you suppose they are waiting? Hum,,, ?

The unemployment rate is tapering off? What, get this, most of the self-employed business people when they close their marine, auto, hardware, movie theatre, whatever the case,,,,, NEVER even hit the map of unemployment statistics. There is another tidal wave coming on this. Sorry but the truth is the media is ignorant to the global concept of the situation.. ME TOO, I dont understand anything but, I know from what happened to me that some talking head is only repeating sound bites from 15 different sources and forming an opinion on what may only be theory to begin with.

I digress,, seriously I could go all night. Will the Dollar survive? The price of oil again is not going up so much as the value of the dollar is going down. It just takes more dollars to buy that barrel.

Here is a guy that I put a lot of stock in, His name is Peter Schiff and the talking heads invited them on his show for years so they could laugh at him,, Guess what? He called this crap we are in now 5 years ago and no one would listen.

http://www.youtube.com/watch?v=zdVP_sgCETo

This is a video that everyone should watch..

If anybody had any sense after Black Monday in 1989 you would have seen this coming and seen a collapse coming down the road and adjusted your savings properly. Investing smartly would now made you worth multi millions. Or at the minimum out of foreclosure. If you can't pay cash then you don't need it.

I'll absolutely ditto Fred...

Never ever will I finance anything that is guaranteed to depreciate again.

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote, originally posted by ChampioNman &raquo;</TD></TR><TR><TD CLASS="quote">If anybody had any sense after Black Monday in 1989 you would have seen this coming and seen a collapse coming down the road and adjusted your savings properly. Investing smartly would now made you worth multi millions. Or at the minimum out of foreclosure. If you can't pay cash then you don't need it. </TD></TR></TABLE>

IMO, this is the other extreme situation.....if no one ever borrowed money. There has got to be a happy medium in there somewhere. Back in the day when CD rates were good and the market was good, did it make sense to pull your money out and buy a car, boat TV, etc rather than borrow for REASONABLE term? I'm not so sure. I think it makes sense to borrow some, put down some of your own, and pay off early. My last boat, borrowed for 4 paid off in 2. This one borrowed for 5 will pay off in 3 with no penalties. I for one chose to take advantage of the softened boat market now and low interest rates. To me 15 year boat loans with no money down are ridiculous. Just like the 100% mortgages on homes. The other thing is using home equity loans to buy vehicles, toys, whatever. Yes, you can deduct the interest but you are tying your home to a depreciating asset. Not smart.

I am not a banker and am not trying to stick up for them but this isn't all their fault. Just because they will lend you more than you can afford doesn't mean you have to borrow it. Just because you can buy a gun doesn't mean you have to kill somebody. You can't protect people from themselves. Again, this is just one guy's opinion. http://www.bassboatcentral.com/boardstuff2/beers.gif http://www.bassboatcentral.com/boardstuff2/beers.gif