Summer 2015 Boat Sales and The Ontario Market

All the leaves are brown and down….summer has moved to Florida!  Your Muskoka marinas are working hard placing the boat toys away for the coming nuclear winter season.   What was the summer of 2015 like for boat sales…do we have happy smiling marina owners….well?  There was certainly some mind stretching challenges associated with operating a marine retail sales operation in Ontario in 2015.  Leveraging available information to date, 2015 for most of the marine business in Ontario was at best a flat year in revenue year over year to down year for many unfortunately.

Stratification of the marine retail business continues in 2015.   Some small start-ups mostly people trying to do cheap boat storage on properties that would keep me awake at night. Small retail operations struggling to keep up as the investment costs continue to climb to be in this business and the players slugging it out everyday for market share. A few black eyes out there from the street fights.

Our 3rd party floor plan company which provides a significant volume of the marine inventory finance in Ontario and Canada as a hole classified 2015 as a tough year…..meaning soft to flat boat sales across the board in all segments.  There was life and growth in the PWC and tow boat markets…the ones that are the most environmentally stressful of the boat categories.  Pontoons flat to negative depending on brand, fishing boats such as Lund and Crestliner called “A” brands for retail operations trending up and fiberglass…well still in a coma….but the heart is still beating!

All of us in the marine retail game coming off two consecutive summers of lets call it less than ideal weather….in other words it sucked for outdoor activities….were hoping for a normal or at least warm to hot dry summer!  What happened…spring was late after a very long and cold winter,  May was cool and wet, June not so good and then finally July, August and September were hot, sunny and great.   The long weekends were for weather….the best we have seen in some time.  August and September in Muskoka the best in perhaps the last 5 years.  The start of the selling season or April May is always important as good weather gets people moving and thinking outdoors.  Two not so memorable summers weather wise followed by a cool spring definitely had an impact on boating retail sales….too many people thinking another bummer summer…lets pack up and go to Spain…wait a minute…turn the plane around…Muskoka lives again!

What else happened…..the really big one was the Canadian dollar committing suicide by jumping over a cliff.  The value of the Canadian dollar fell versus the US dollar since January 2015 by a whapping amount of over 15%.   What does that mean….for every $10,000 of boat cost the price increased by a minimum of $1500.00.  To add to the fun or correctly the pain…the boat buyer also pays an additional 13% tax on that increase for a total of $1695.00 per $10,000 purchase price.  Not many boats available in the market for less than $30,000 today and the extra financial burden to consider that level of boat purchase with the exchange differential is $5085.00 on that $30,000 purchase…ouch…definitely not friendly!  Boat buyers were looking for deals and those deals were on inventory purchased by dealers before the fall of the Canadian dollar.  Those who bought right and timed it right were okay…those dealers with stock held in US dollars or late to purchase stock….eating Rolaids and Aspirin by the handful all summer.

Wholesale boat purchasing for retail operations is down year over year in the area of 6% which followed the same drop in boat purchases by marinas for inventory by the same amount in 2014.   That is a 12% drop in two years.  The American boat builders many of which will tell you that Canadian dealer purchases in the years 2008 to 2012 was the only reason they are still in business, have lost our phone numbers as the US market boating market has finally escaped the gravitational pull of a black hole and blasted into the light. The boat retail market is changing and rapidly.  The entry level boat buyer due to pricing has been chased into the used market.  There is very strong pressure on used boat pricing and availability which has been exasperated by the US coming to Canada to buy up our clean fresh water utilized boats of all types and sizes.

Where is the boating market going in 2016?  The game now revolves around inventory purchased at the right time at the right price.  The 2016 Toronto Boat Show will be challenging as prices are up…way up!

I get asked all the time as I have been in this business now for 3 decades how did I or Huntsville Marine do?  Boater’s Chat is not about selling Huntsville Marine or our services but to the question the answer is we are up in almost every category every year for the last 3 years.  Are we prepared for the challenges ahead in 2016….we think so…but ask me next September and I will tell you the truth!