Have structural changes occurred in the boating industry?
The structure of the marine industry is always surprising. There are a lot of small manufacturers in the game. Consumers sometimes buy boats, frankly, from those who shouldn’t be in business. When you look at the infrastructure they have in place to bring a very expensive product to the market, you wonder if they are going to be here six months from now because it is complicated building a boat. How do we make sure we support the dealers to the best of our ability? Some dealers do a tremendous job, but there’s been a purge.
What are the largest drivers in the boat industry?
In the past 10 years the largest driver — what we’ve seen so far — is that it’s being driven by regulation. This has driven the costs of the units way up, while offering very limited real tangible benefits for consumers. The industry has been forced to invest in technological changes that gave no direct benefit to consumers. We have all the same engines. Your levers for differentiation are fairly limited. The number one focus on our side is to visually make drastic changes in boats from where things were before, keeping manufacturing and costs in mind. That’s easier said than done.
Looking back to the beginning of this historic downturn, were there any surprises?
It’s a big surprise there has not been too many manufacturers that went out of business. Even with Genmar, the brands survived. That’s been a big, big surprise that so many manufacturers weathered the storm.
How has the industry changed in the past few years?
I think everyone had to retrench a little bit. I don’t see that the structure of the industry has changed fundamentally. The depth has changed. At the end of the day, the size of the pool is so many units. Even for suppliers, the business has become more complex for dealers, as each transition is smaller than it used to be. That’s not a recipe for a successful turnaround in the marine industry. The volume is not going to come back to anywhere near where it was.