State of the industry: Pretty dismal

[Oldrig]

Hey folks,

I came across this depressing article on a boating industry website (International Boating Industry magazine, I think).

To my mind, it sums up what's happening to the sailboat-building business; they're still trying to squeeze out more dollars per unit by building big, expensive, gadget-laden McCruisers, and reducing the output of small, KISS sailboats for real sailors.

It makes me angry, because sailing big, expensive  boats isn't what sailing is about, and it won't help produce new generations of sailors. And, as the economy tanks, the model won't even work any more.

Enough of my personal rant. Any comments from you folks?

--Joe

Here's the depressing news flash:

HEADLINE: North American sailing industry production declines by 5 per cent in 2007


By IBI Magazine


Sailboat production declined by 5 per cent or 787 boats in 2007 to 14,158 units, compared to 14,945 units in 2006. The Sailing Company's annual North American Sailing Industry Study, compiled by Rick Walter MarketResearch Associates, also reported that production of sailboats below 20 feet dropped to five-year lows. Overall, this is the seventh straight year of decline for North American builders. The industry hit a high note in 2000 with 22,164 boats.


But the Study did offer some bright spots, notably that some manufacturers are now going after a higher-demographic buyer. Small-volume boats over 46 feet, it reported, are being produced and sold at record rates.


The Study, which polled 88 per cent of North American sailboat builders, also reported an overall workforce reduction of five per cent in 2007 compared to 2006.


In the different size categories, sailboats up to 19 ft declined by 3 per cent to 11,265 units compared to 2006, while mid-range boats from 20 to 40 feet were off by 15 per cent to 2,284 units. Boats in the 41-ft.-plus range were off by 7 per cent in 2007 to 609 units. In the 46-ft. and over category, however, orders were up by 104 units to 249 boats in 2007.


Multihulls, particularly in the 19-ft. and under category, declined significantly from 2,674 units in 2006 to 1978 last year. Overall, US multihull production was down by 25 per cent.


"High-volume boats under 20 feet are at five-year lows," noted the Study. "They are down 3 per cent versus a year ago and 14 per cent versus five years ago."


The general cruiser category over 20 feet was also down 14 per cent, or 460 units, at the lowest level in five years. "An uncertain economy and real estate investment crises had a major dampening effect on the mid-cruiser aspirational segment, 36 to 45 feet, which declined by 285 units year to year," said the Study.


In order to increase margins, some boat builders are using a "recession-proof strategy" of building sailboats over 46 feet. "That category's production increased sharply to a five-year high of 249 boats," said the Study. "Almost one out of four bigger boats over 36 feet were 46 feet and over, suggesting a redefinition and potentially lucrative proposition at the top end."


Despite the lower production numbers, the participating manufacturers said that the value of the boats increased by 6 per cent to US$802 million. The increase came, in large part, because of the higher-margin sailboats over 46 feet, valued at US$216.7 million. P>Cruiser imports into North American markets also declined by 5 per cent in 2007. Mirroring US manufacturers, importers reported strongest sales with large boats over 46 feet. "The smallest cruiser segment, 20 to 35 feet, appears to be losing ground as a viable import strategy based on five-year trends," noted the Study. "This was the second lowest number of boats in this category during that time frame."


Both importers and US manufacturers are predicting relatively flat sales in North America in 2008. "Threats of a recession and prediction that the real estate crises will carry well into 2009 are reflective of a very cautionary tone in builder predictions for 2008," the study concluded. "No category of sailboat is predicted to increases versus '07 by greater than 4 per cent." In past surveys, sailboat manufacturers have been overly optimistic about prospects for the year ahead.


(10 March 2008)

[Captain Smollett]

I hear ya, and this is/has been being discussed on other small boat oriented forums.

But I guess it's just the optimist in me that says "fret not" over stuff like this.

For one thing, and I guess this is the height of selfishness, but I don't give a whit about the "industry" as such reports define it.  Sites like this one, the message of the Pardey's, the Martins and MANY others continue to spread the word that KISS is preferable.  Let the "industry" self destruct on the overindulgence it creates, while we continue to sail our simpler boats.

The saving grace for the next generation lies with the small boat builder - the home builder, the hobbyist, as well as in the used boat market.  Lots of kids have learned to sail on home-built Optis.   ;D

[AdriftAtSea]

Some of the makers, like Compac and PCI, aren't going after the big boat market.  They know they have a specific market niche and don't see any point in leaving it.  The high fuel prices are really going to hurt a lot of the boat manufacturers, since a lot of the raw materials used in boat building is heavily affected by fuel prices.

I think that more people will be turning to smaller boats, especially with fuel prices heading for $5.00 a gallon this summer.  Buying 10-15 gallons a season makes boating a lot more affordable. 

[Oldrig]

Aye Cap'n,

You're right about where the future lies--with small builders and with the large supply of used boats out there.

I'm fretting partially because I work at a boating magazine, and we're losing our advertisers. Normally I wouldn't care--because our advertisers were almost exclusively dealers of powerboats. However, as the magazine got smaller, so did my job. I was just cut from full-time to half-time. This should give me more time to spend working on and sailing on my boat--but I do have a house and a wife.

Luckily, I recently bought a Prius (all paid for), and we don't have a mortgage.

Looking outside of my own personal situation (being in a print medium doesn't help, does it?), I have to agree with you that there will always be small, semi-custom or hobbyist builders. And, like I said at the top of this post, the increasing supply of used boats.

Still, where are the Beetle cats and Sailfish that some of us (I'm showing my age) learned to sail on? And, to continue my self-centered rant: What about access to the waterfront?

--Joe

[CharlieJ]

Tell me about it folks. AS  a Macgregor dealer my sales have tanked. Heck- the people LOOKING at the boats has tanked. In the last 4 months I've had TWO lookers at the brand new 2007 26M sitting on the lot.

Another month or so I'll have to try to move it at cost, because the 08s are already out and soon the 09s will be. And we have the boat discounted over 3 grand already. Fully equipped.

I used to get two or three referrals a month from Macgregor- in the last two or three months, I've had TWO.

[Captain Smollett]

Hey, Joe, just curious - which mag?  I ask the following out of genuine curiosity, not flaming.

I mean, is it a small boat, KISS friendly mag that seeks to educate the readers on what it REALLY takes to cruise, or does it fit a different model?

Just who are those advertisers you are losing?  Are they those who think a properly equipped boat is one that you can hardly get ON for all the junk?

The bottom line is that for MOST Americans, boating is a luxury - not a way of life.  As folks 'feel' real or perceived downturns in the economy, luxuries go by the board.  It's funny, though, a real interesting dichotomy exits: us on the KISS side of the fence tend to simplify our lives by moving MORE toward the boat and what she offers, rather than sacrificing the boat in favor of some other "necessity."

Isn't that weird to think about?

[Lynx]

I guess we should toot our won horn a big more. That might help.

[macdiver]

I'm not surprised that the overall number of sailboat sold is down.  We are in a recession by most economists calculations.  People aren't buying nonessential items and face it sailboats are nonessential (unless you live aboard). 

What surprised me is that 80% of sailboats sold were less than 20 ft.  This means that most people are buying daysailors not the megayachts that I thought.  I guess the ads make it seem everone has a Benacatahunta  41 when everyone really has a scow 14.  ;D

[Oldrig]

Capt. Smollett: I sent you a personal message answering your question. I didn't want to name my magazine to everybody (and my apologies for airing that part of my dirty linen on this board).

As the other comments: Yes, the economy is sinking into deep doo-doo, and boating is, for most people, a luxury. Most of the magazine's advertisers are dealers and, as CharlieJ so aptly put it, people aren't even LOOKING at boats right now. Revenue at the magazine went down, and so the editorial budget had to be slashed.

MacDiver:
Is it true that the majority of sailboats sold is under 20 feet? I didn't see that statistic in the story I posted, which was about new sailboats MANUFACTURED, but it would certainly be enouraging if that were true.

I think most of us on this board would hope that the coming economic shakeout will mean the death--or serious illness--of the Benacatahunta 41s that fill the sailing magazines now.

Still, there are boards like this one, and magazines like Good Old Boat, that cater to those of us who like to sail and do it simply.

I'm hoping that I'll be able to continue working for my present employer on a part-time basis and maybe find freelance opportunities writing about sailboats. If not, at least I'll get to spend more time on the water.

--Joe

[AdriftAtSea]

The problem is that the <20' segment includes all the sailing dinghies, like Sunfish, Lasers, Hobie Cats, etc... so that kind of skews the figures.

[Oldrig]

Dan:

Actually, kayaks and (barf!) personal watercraft are still selling, too. But neither have sails.

Still, I think the kayaking boom will help build enthusiasm for the water and perhaps provide a population base of future sailors.

--Joe

[macdiver]

Is it true that the majority of sailboats sold is under 20 feet? I didn't see that statistic in the story I posted, which was about new sailboats MANUFACTURED, but it would certainly be enouraging if that were true.

Correct you are.  I misread the article.  I thought that the numbers refered to sells.  So 80% of the boats produced were up to 19 feet (11,265/14,158).  However, it is unclear from the article how many boats in any size group was sold. 

Adrift,

I realized that most of the under 19 foot boats includes the sunfishes and dinghies which is why I referenced a small scow.  The Hobies and other beach cats were included in the multihull catagory (if I understand the statement regarding multihull production).

[Frank]

Oldrig....back home,up on the Ottawa river we call PWC 'river lice'  :(

[Oldrig]

Oldrig....back home,up on the Ottawa river we call PWC 'river lice'  :(

Thanks, I'll have to remember that one! My wife calls 'em vacuum cleaners, because of the spray and noise. If you knew how she feels about doing housework (as do I), you'd understand what an insult that expression is.

But "water lice" is much better.

--Joe

[Captain Smollett]

Still, I think the kayaking boom will help build enthusiasm for the water and perhaps provide a population base of future sailors.

That's an excellent point.  There are sailing kayaks, too, so that's definitely an "in."

[s/v Faith]

Boaters affected by rising fuel costs

Story Highlights
- Boat sales are down 12 percent nationwide

- Boaters taking shorter, slower trips on calm seas to conserve fuel

- Average pleasure boaters, not high-end boat owners, hit hardest at the pump

- Boat manufacturers offer fuel-efficient alternatives

  How exactly is this a bad thing?  I do not think that 'boating' should be out of reach for the average person, but I do think that the excessive 'need for speed' and the increasing fuel consumption is a trend that needed to be reversed.

 

[AdriftAtSea]

when i was at the maine boat builders show with Joe, I saw a sign for a stinkpot that said something like:

Fuel efficient, only 11 gallons an hour at 20 knots

and I thought to myself, I didn't use 11 gallons all last season.  And my boat can do 12 knots with fair regularity and not burn a drop of fuel. :)

[Auspicious]

I know this is a different point in the market than you guys are thinking of, but I find it interesting that the recent Hallberg-Rassy 342 has become the best seller in the HR line. If I remember correctly the 31, 40, and 43 follow in a fairly tight pack. The big boats (48, 54, and 62) are works of art and continue to sell (in Europe) but the volume and most of the returns are in the relatively smaller boats.

[AdriftAtSea]

For a lot of people, the mid-30's is about as big as they want to go....so the 342 doing well doesn't surprise me at all. Docks and slips get harder to find above 35' from what I've seen. 

[Auspicious]

I understand.

My point was that huge gin palaces are not the big sellers all over the world.

Interesting that there is a big difference in availability in slips above and below 35' in your area. Around Annapolis 40ish feet seems to be the dividing line in availability. Prices really take off above 40 feet. The rate per foot between about 20 feet and 40 feet is the same, and you pay for the slip size, not the boat size.