Sales Continue to Rise as Inventory Dwindles

As the COVID-19 pandemic continues to dash traditional vacation and summer plans, consumers are hungry for a new form of entertainment and recreation. The latest sales data shows that many are flocking to the water as their vacation close to home.

The newest report from the National Marine Manufacturers Association (NMMA) tells of a sharp rebound for sales in May to kick off the summer. New boat sales were up 59% compared to April and up 9% from pre-pandemic levels on a seasonally-adjusted basis. Personal watercraft, saltwater fishing boat and jet boat sales were included in the group leading the growth, accounting for 41% of new boat sales annually.

“The new data shows a very positive start to the summer for the recreational boating industry, with increases in new boat sales across all major segments. The last time we saw such strong sales in a single month was back in 2007,” said Vicky Yu, NMMA director of business intelligence. “This strong rebound underscores a heightened interest in boating as a way to enjoy the summer with loved ones while staying close to home, especially as summer camps, sports leagues, and vacations have been cancelled amid the pandemic.”

Dealerships across the nation are still receiving inquiries, walk-ins, etc. in record numbers as consumers look to get onto the water this summer, but are facing the problem of having no boats to sell them.

Recent surveys across the industry indicate as many as 70% of dealerships having little to no inventory left.

“It almost looks like we’re out of business,” Roger Moore, owner and CEO of Florida-based dealership Nautical Ventures said. “I look out my office window and our show lot is just empty.”

Moore said that when early March rolled around, he began to worry about even being about to survive as a business due to the oncoming virus. However as new systems and processes were put in place, he reported that Nautical Ventures didn’t see a single dip in sales in any month.

As a “one-stop-shop” for everything on the water, Nautical Ventures does a large amount of business through what Moore describes as water toys — kayaks, stand-up paddleboards and more. Moore said it’s the same thing for inventory on that side as well.

“We recently took delivery of two 40-foot trucks full of kayaks,” Moore said. “Every single one was pre-sold before the truck even arrived.”

Further up the east coast, Maryland-based Pasadena Boat Works is feeling the same pinch on demand versus inventory.

“Other than a handful of bass boats — which it really isn’t selling season for yet anyway — I’m almost sold out in everything else we have,” general manager Nick Doetsch said.

Doetsch said the strong sales, despite the lack of inventory right now, were especially welcomed after Maryland went through an all-out, roughly month-long recreational boating ban state-wide.

“We’re even seeing a strong demand for boat buying still this far into July, where we typically start seeing a slow down following the Fourth of July,” Doestch added.

Same story, different machine

NMMA’s report also indicated that incoming June data shows the sales growth momentum continuing primarily with the help of healthy sales of personal watercraft. A highlight of the report said that PWC sales reached record monthly highs for the second consecutive month in June, up 41% from a year ago on a seasonally-adjusted basis and have fully recovered from pandemic-related losses in March and April.

Similarly, year-over-year data from Statistical Surveys Inc. (SSI) for the month of May echoes substantial growth for the personal watercraft segment.

Broken down by brand, SSI data reported BRP’s Sea-Doo saw just over 28% YOY growth in May, followed by Yamaha with about 9.2% growth YOY for the month. Kawasaki rounded out the top three brands with almost 7.5% growth YOY for the month of May.

Despite the good news of seemingly ever-increasing sales numbers for personal watercraft in dealerships across the country, the combination of record sales and temporary manufacturer shut downs — among other smaller factors — has led to the same problem boat dealers are facing; Lack of inventory.

“We’ve simply run out of product to sell,” Jet Ski of Miami operations manager Richard Mena said. “It’s been absolutely crazy so far.”

Mena said the dealership ordered around 1,000 units from Yamaha prior to the season and they’ve now completely sold through that inventory. He added that the dealership is also just about out of its Kawasaki units.

“Everyone is looking to use getting on the water as an escape from what’s going on in the world and they’re looking to do that by buying a pwc,” Mena said. “People upgrading, lots of first time buyers, we’re seeing it all.”

Even outside of the southern water recreation states like Florida, dealerships like Minnesota’s River Valley Power & Sport are finding themselves nearly completely out of inventory for personal watercraft.

“Getting out on the water is definitely the ‘vacation’ of choice right now,” River Valley’s owner John Wooden said. “It took a lot of adapting to a new way of selling, a new way of marketing and everything in between at first, but as soon as customers realized that getting out on the water was still in the cards, while family vacations weren’t, inventory almost literally flew out the door.”

The disconnect

When the COVID-19 pandemic began really hitting the continental U.S. in March and situations were changing through April, many dealerships maintained the ability to remain open by being deemed essential, as some emergency services rely on boat dealers to service boats.

Though some sales took a dip as uncertainty spread in the early months of the pandemic, sales began to pick up in both boats and personal watercraft, as families looked for new ways to entertain themselves with summer quickly approaching.

On the flip side, many on the manufacturing side — both large and small manufacturers — halted production to keep employees safe and readjust.

Large manufacturers such as Marine Products Corporation (Chaparral, Robal and Vortex Boats), Smoker Craft Inc. (Smoker Craft, Starcraft, Starweld, Sylvan and SunChaser brands) among many others temporarily suspended manufacturing operations in March.

Some manufacturers like Smoker Craft — with a variety of new safety measures in place — returned to a limited production in late April after the lifting of a stay at home order from Indiana’s governor and returned to full production in early May.

“Smoker Craft Inc. counts the health and welfare of its staff, dealers and partners as its top priority,” senior vice president of marketing and corporate development, Peter Barrett said in a news release from the manufacturer. “With the expiration of that order, we will implement a carefully-phased return to full production under the guidance of six new health and safety protocols that have been developed by our Covid-19 Response Team in order to fully protect our most valuable asset – the exceptionally talented and skilled people who build the best boats on the water.”

Others, like Marine Products Corporation’s Nashville, Ga. Facility, were unable to resume full production until the second week of May.

On the personal watercraft side, BRP shut down Sea-Doo production in March and did not resume a gradual production until early June, resulting in a loss of roughly three months of production.

As of mid-July, Sea-Doo is running at full capacity once again, but the production focus has shifted to cranking out 2021 models.

“With our manufacturing operations ramping up, we have begun to ship to our dealer network. We are currently releasing early units in July and August in the U.S. market,” BRP external communications manager Magali Valence said. “This will help us keep up with demand and we’ll do our best to respect our customers’ preferences.

“We know that this is not the ideal situation, but with the COVID-19 pandemic, we were forced to shut down our global production which means there may be a reduced variety of units. However, we are taking all the necessary measures to lessen the impact on our customers,” Valence added.

Similarly, Yamaha WaterCraft took a brief pause in production in early April to ensure employee safety and implement new strategies. Yamaha returned to production in early May with new safety measures in place. Yamaha has also shifted from 2020 WaveRunner production to new 2021 models.

Handling the now and readying for 2021

Dealers across the board continue to stress the importance of communication between dealership and manufacturer.

“Everyone involved just needs to be upfront and honest about everything right now,” Pasadena Boat Works’ Doetsch said. “We all — including the customer — understand inventory issues are the nature of the business and industry currently. We just need to communicate up and down the line and give the best timelines to our abilities.”

As many manufacturers shift focus to 2021 models to get units to showrooms, dealers have been forced to take new tactics while current inventory remains slim, yet demand still extremely high.

“We’ve been honest and sincere in just telling customers that we don’t currently have the product to get them out on the water right now,” Jet Ski of Miami’s Mena said. “It’s really all you can do, just be honest and upfront.”

Mena added that at this point, customers are so excited to get out on the water, that the dealership has begun taking deposits in advance for 2021 machines. He reported that Jet Ski of Miami has already taken around 150 deposits on 2021 personal watercraft to get people in line already.

Similarly, Moore said that Nautical Ventures has also been taking deposits on 2021 boats, while keeping a network of customer boats available for sea trials for potential buyers. “Everyone across the board understands each other and knows what we’re all going through,” Moore said. “They’re coming in slowly, but the important thing is, is we’re getting boats and people are getting out on the water.”