Boat registrations decline 12% as rates deter buyers

Total U.S. boat registrations fell 12% year over year in February as elevated interest rates challenged buyers and demand continued to normalize from pandemic-spurred highs. Registrations across the powerboat segments , including personal watercraft, sailboats and houseboats, declined 7% YoY in February, according to Statistical Surveys data based on reporting from 32 states, or about 58% of the market. [caption id="attachment_58338992" align="aligncenter" width="1600"] (Photo/Canva) [/caption] The industry expected boat registration volume to slow coming into this year, Adam Pensel , general manager at marine dealer Boats By George , told Auto Finance News . “We went into this year expecting the overall market to be down for boat sales in pretty much all segments, sterndrive, pontoons, all of it,” he said. “There are still buyers out there; they're better informed. They are shopping harder and pushing more for deals.” “There are still buyers out there. ... They are pushing more for deals.” -- Adam Pensel, Boats By George Lake George, N.Y.-based Boats By George increased its marketing spend this year to “capture a larger piece of a smaller pie,” Pensel said. The dealership is tracking about 20% ahead of its revenue goal for the year of between $23 million and $25 million, typically equal to between 150 and 200 new and used units sold, he said. The dealership carries high-end brands such as Cobalt . “My overall outlook is cautiously optimistic; if interest rates start to tick down ... that is going to help,” Pensel said. “There is interest and there are buyers out there, they just need to be restimulated by the season coming due. We’re doing well right now.” Registration activity was mixed across the marine segments, according to a research note from BMO Capital Markets : Ski/wake boat registrations rose 7% YoY; Registrations on aluminum fishing boats ticked up 4% YoY; Pontoon registrations, including BRP ’s Sea-Doo Switch, declined 5% YoY; Fiberglass runabout registrations dipped 6% YoY; Saltwater outboard registrations decreased 15% YoY; and Personal watercraft unit sales fell 23% YoY. Boat sales have naturally slowed following a large spike in demand during the height of the pandemic, Randall Lyons , executive director of the Massachusetts Marine Trades Association (MMTA), told AFN . “Overall, the industry has some concerns based on the interest rates and a natural slowdown from the post-COVID rush. ... There wasn’t any way to maintain the levels of sales we were seeing,” Lyons said. “The boat show stretch just ended; some boat shows did well, some were down.” The key will be keeping up momentum with consumers new to boating, Lyons said. “If you look back to the 2020 time frame to today, there's been about a million new boaters that have entered the industry; that’s a huge benefit to the industry,” he said. “A lot of businesses, marinas, dealers, boat yards are now working to keep that.” Interest rates are a large roadblock to boat sales, with some consumers getting through the purchase process up until the moment of financing and then walking away, Matt Gruhn , president of the Marine Retailers Association of the Americas , told AFN . “Dealers are working harder to sell, nurture leads and capture new leads,” he said, adding that some manufacturers are offering incentives to help dealers move products. “The expectation in general is that our industry is going to be flat year over year; there has been some talk that it could be down a bit,” Gruhn said. “The dealers that are out there working hard, being innovative, trying new approaches and looking for new markets are finding success.” Marine retail activity picked up in early March but is lower compared with a year ago, according to BMO . Boat dealers are holding off on ordering more units as supply increased 38% YoY at the end of February, according to a BMO analysis of BoatTrader data. “Most manufacturers feel as though field inventory is a little high for what they would like, but the brands we deal with have done a decent job of scaling back production to a comfortable level,” Boats By George’s Pensel said. Boat supply was limited soon after the pandemic, allowing dealers and manufacturers to charge a premium and prompting many consumers to order boats as much as a year in advance, MMTA’s Lyons said. “There are certain manufacturers where that still may be the case; I don't think it's that extreme,” he said. “Inventory has pretty much caught up and is back to the level where dealers want it to be. They're also paying close attention to [supply] from an expense standpoint and making sure they're following the trends appropriately.” Registration is now available for Auto Finance Summit East 2024 , May 1-3 in Nashville, Tenn., which gathers lenders, dealers and fintech innovators in an event designed to bring the power of technology to a cross section of industry players. Visit AutoFinance.Live to learn more.

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