There should be no doubt in anyone’s mind by now that the current downturn in the recreational boating market over here is very severe. There are almost daily announcements of plant closings, job eliminations and filings for bankruptcy protection. These consequences follow every downturn but the number and size of the ones this time are much, much larger. The really bad news is that the full extent of this downturn will not be known until after the current round of dealer meetings (where boat builders take orders for 2009 models) or the end of the summer when many boat dealers may close their doors forever.
It comes as a surprise therefore that so little seems to be said or done regarding innovative ways to deal with the situation. Many believe all that needs to be done is to cut their cost of doing business to an absolute minimum and wait for the downturn to end because the market will return to normal. A growing number, however, are beginning to believe that the market will never return to normal. They have come to realize that the cost of boating is becoming prohibitively expensive and not because of the cost of fuel. It is beginning to sink in that there are too many industry mouths trying to feed from the supply chain and that this is the primary pressure forcing prices upwards. The primary culprits are the costs of promotion (magazines and boat shows) and distribution (inventory, warranty and service). The announcement that the Ferretti Group will acquire the Allied Richard Bertram Marine Group is indicative of the innovation required. Ferretti now has a powerful distribution platform that it owns to sell and service its products in Florida and the U.S. American boat builders might consider emulating this example.
Posted by: James
Categories:
Marine Industry