Going Down



We are holding
our breath, hoping that the marine industry does not get hit too hard
from the sad economic state here in the States. This story from IBI
doesn’t make us feel any better.

n RBC Capital survey of 250 US boat dealers released today says that
the current new-boat market weakening through the second quarter of
2008. The survey said that demand for new boats was "extremely
poor" through the second quarter.

"Nearly 35 per cent of dealers reported that new boat sales are
declining by 30%-plus, supporting our view that the market was down
25-30 per cent in Q2," read the synopsis. "The used market
is holding up much better in relative terms. Dealers attribute energy
and consumer confidence issues as the primary reasons for the weakness,
but also expressed concern over the financing environment."

The survey also noted that inventory is still a "problem"
for US retailers. "Dealers expressed concern with the overall level
and, to a greater extent, the aging of their inventory," read the
survey. "Dealers did not indicate a significant amount of promotional
assistance from manufacturers, supporting our view that Brunswick and
other manufacturers are adjusting primarily through production."
The survey noted that dealers have lowered new boat orders to deal with
inventory issues.

The study said that dealers are also uncertain about whether the market
will recover next spring. "Longer-term sentiment towards the business
varied widely. Some dealers believe that the current downturn is temporary,
whereas others fear that the market could be permanently impaired for
structural reasons, most notably the prohibitive cost of owning and
operating a boat," read the survey.