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With RV sales rather slow this year, the RV industry may take some small solace in the fact that it is not alone as boat sales are predicted to be down roughly 5% in 2006.
For instance, here’s a synopsis of some financial news from the marine sector reported by Boating Industry, sister publication to RV Business, late last week on www.boating-industry.com.
• Recreation giant Brunswick Corp., Lake Forest, Ill., manufacturer of boats and also a participant in the fitness, boating and billiards industries, reported a 27% decrease in operating earnings for the third quarter ending Sept. 30. Boat sales declined 5% while engine sales profits also decreased 1.6%. CEO Dustan E. McCoy said Brunswick will be making production cuts. “The decline in retail demand for marine products we experienced in the first half of 2006 continued into the third quarter with retail demand down in the high-single digits,” he said.
• Net sales and gross profits for fiberglass boat manufacturer Marine Products Corp., Atlanta, Ga., dropped 1.6% to $64 million, largely due to a 12.5% decrease in the sale of stern-drive and inboard pleasure boats by Chaparral. Sales for the first nine months of the fiscal year were $205.7 million, a 4.4% drop versus last year.
• While Tokyo-based Yamaha Motor’s consolidated sales for the third quarter rose 17.4% compared to the same period last year, the company’s U.S. outboard motor sales decreased. Yamaha’s marine product sales increased overall by 8.2% to $1.7 billion. Yamaha attributed the decline in U.S. outboard sales to “stagnant demand resulting from crude oil prices rising, an economic slowdown and other negative factors.”
• The sale of entry-level boats and mid-range cruisers has been hardest hit this year, according to RBC Capital Markets analyst Ed Aaron, Boating Industry reports.
The silver lining, however may be that “manufacturers and dealers have been more responsible with inventories relative to prior cycles, which should help cushion the blow of a downturn and enable a faster recovery once industry conditions improve,” Aaron said. He said wholesale shipments have been reduced 10% to 15% from what they were this time last year.