Boat-makers aim to lure more aboard

Companies bank on lower prices, more technology to level out sales decline

The recreational marine industry is making a bid to offer more affordable boats to counter consumer attitudes that boats are expensive toys.

For Brunswick Corp., the nation’s largest recreational boat builder, that means every new model should cost the same or less than the model it replaces, marking a big change for the company and the industry, said Dustan McCoy, chairman and chief executive officer.

Brunswick is the parent company of Mercury Marine, a Fond du Lac, Wis.-based manufacturer of outboard and stern-drive boat engines. The Forest Lake, Ill., company has nearly a dozen boat brands, including Bayliner, Crestliner, Lund, Lowe and Sea Ray.

A few of the models in those lines cost hundreds of thousands of dollars. But even at the high end, there’s more emphasis on reducing the price so people will buy new boats rather than used ones, McCoy said.

While a great majority of 15,000 people surveyed by Brunswick said boating was a desirable pastime, those surveyed also said the cost is troublesome.

“People still want to boat, and they’re always looking for a different boat, but they’re not buying new right now because they think the cost versus the value they receive is out of whack,” McCoy said.

That’s backed up by industry numbers.

Before the recession, the powerboat industry was selling about 800,000 used units a year and 300,000 new ones. Since then, used boat sales have remained about the same or increased, while sales of new boats remain below levels seen before the recession.

The introduction of fresh designs and new technology will curb the sales decline because older boats won’t have the latest features, McCoy said.

Reducing prices also will help, especially through successive model changes over a period of years.

Brunswick has introduced a 35-foot boat with a better design and new technology, including joystick-docking controls. The new model is priced at less than the model it replaced, and buyers have flocked to it, McCoy said.

“We had to triple our production that we initially planned,” he said.

Brunswick has made many changes, including building different models on a similar platform.

The company wants to give buyers the content they want without having hundreds of options that add to the company’s costs. Thus far, it’s worked even with the most expensive boats, McCoy said.

“We introduced our 65-foot yacht at the Fort Lauderdale, [Fla.], boat show and sold out our 2014 production,” he said.

Leading the industry’s growth are small fiberglass and aluminum outboard powered boats 26 feet or less in size. Pontoon boats also have sold well, largely because they appeal to families and first-time boaters.

While some consumers always will buy a boat loaded with every option and the most powerful engine, others are satisfied with less horsepower and a lower price, said Todd Riepe, general manager at the Skipper-Bud’s boat dealership in Pewaukee, Wis.

Brunswick stands out for replacing older boats with less expensive new ones, Riepe said.

Gradually, the boating industry is adjusting to a new economy, said Charles Plueddeman, a freelance marine writer from Oshkosh, Wis.

“A boat is a very discretionary purchase,” Plueddeman said. “You can buy a new Harley-Davidson and rationalize it because it gets better mileage than your car when you ride to work. Not many people can boat to work.”

For many people, fixing up the boat they own has been an attractive option.

“In the past, these customers may have replaced their entire boat. In the new economy, replacing the boat is not an option, but perhaps replacing the motor is feasible,” Plueddeman said. “These new motors do not require digital controls and instruments, and they fit on the same transom mounting holes as older motors.”

Business, Pages 32 on 04/12/2014

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