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Bump's World - Winter 2010
February 8, 2010
Sitting at my desk at New Wave I probably have one of the best views in the world. I'm right on Manchester Harbor, which today is mostly frozen over. With snow flurries in the air this truly is a winter wonderland. In the past I have walked across the harbor, but I'm hoping it does not get cold enough to do it this year.
Being the internal optimist, I track each day getting a little more sun light and in less than sixty days we will be launching our first boats of the year. In spite of this winter wonderland, spring is not far away.
Last year at this time the boat world was in chaos. No one knew where this economic down turn was going and how it would affect them. This year the down turn has bottomed and we are beginning and long bumpy recovery.
There have been huge loses in the marine industry. More than 50% of the people in the marine industry eighteen months ago are not in this industry today. The second largest manufacturer/dealer of boats in the United States, Genmar, is gone, Many other manufacturers and dealers have not survived. It is probable that a few more may not make it.
Dealers and manufacturers with a strong foundation have survived and will model the industry going forward. I am very lucky that New Wave Yachts is a survivor and all the manufacturers we represent are in business building boats today.
So what changes will we see going forward? Everyone is going to be more conservative. Banks will require more qualifications to get financed. There used to be three things you needed to get a boat loan. Income to pay the loan back, good credit showing you are a responsible person who pays back loans, and some equity like a home. Three years ago if you had any one of the three you got financed. Today the banks, we bailed out, have added a new one. Now you must also have liquidity, which means a bunch of cash in the bank after you buy the boat. This way if you lose your job you can still make payments for say six months. The good news is we do have banks that want to finance boats and will work with you. The interest rates are still very good.
The boat manufacturers have cut way back on production and are not building unsold boats. Boat dealers have cut way back on inventory. In 2009 dealers worked hard to get rid of old inventory and did not replace it. What this means is there is a good chance the boat you want will not be in stock and will have to be built for you. Across the board boat inventories are way down. If your new boat needs to be built for you, then you are running out of time if you plan to use it this summer. I don't know about you, but more and more every summer is getting more precious to me. If you want a new boat for this summer you need to move quickly.
The prices of used boats has been affected also, therefore your trade value is way less than a couple of years ago. Again being more conservative you might find some dealers not willing to take your boat in trade at all. When those used boat values went down, dealers with large trade in inventories go hurt real badly. The dealers will not want to get caught in that position again. At New Wave Yachts we are still glad to consider your trade.
Boat show season is upon us again and early reports show traffic is way up and people are buying, I believe that people are confident we are on the rebound and people want to get on with their boating lives. Our buyers are confident that dealers and manufacturers doing business today are healthy and represent a good investment for the future.
I sure looks cold out there. Hard to believe that a forest of masts will be my view in a few months. Ten days to the New England Show, nine long days of the show and then the race begins to put together the pieces that make these boats work and deliver the dreams.
Winter in New England only a special person can love it.
Bump's World - Winter 2010
February 8, 2010
Sitting at my desk at New Wave I probably have one of the best views in the world. I'm right on Manchester Harbor, which today is mostly frozen over. With snow flurries in the air this truly is a winter wonderland. In the past I have walked across the harbor, but I'm hoping it does not get cold enough to do it this year.
Being the internal optimist, I track each day getting a little more sun light and in less than sixty days we will be launching our first boats of the year. In spite of this winter wonderland, spring is not far away.
Last year at this time the boat world was in chaos. No one knew where this economic down turn was going and how it would affect them. This year the down turn has bottomed and we are beginning and long bumpy recovery.
There have been huge loses in the marine industry. More than 50% of the people in the marine industry eighteen months ago are not in this industry today. The second largest manufacturer/dealer of boats in the United States, Genmar, is gone, Many other manufacturers and dealers have not survived. It is probable that a few more may not make it.
Dealers and manufacturers with a strong foundation have survived and will model the industry going forward. I am very lucky that New Wave Yachts is a survivor and all the manufacturers we represent are in business building boats today.
So what changes will we see going forward? Everyone is going to be more conservative. Banks will require more qualifications to get financed. There used to be three things you needed to get a boat loan. Income to pay the loan back, good credit showing you are a responsible person who pays back loans, and some equity like a home. Three years ago if you had any one of the three you got financed. Today the banks, we bailed out, have added a new one. Now you must also have liquidity, which means a bunch of cash in the bank after you buy the boat. This way if you lose your job you can still make payments for say six months. The good news is we do have banks that want to finance boats and will work with you. The interest rates are still very good.
The boat manufacturers have cut way back on production and are not building unsold boats. Boat dealers have cut way back on inventory. In 2009 dealers worked hard to get rid of old inventory and did not replace it. What this means is there is a good chance the boat you want will not be in stock and will have to be built for you. Across the board boat inventories are way down. If your new boat needs to be built for you, then you are running out of time if you plan to use it this summer. I don't know about you, but more and more every summer is getting more precious to me. If you want a new boat for this summer you need to move quickly.
The prices of used boats has been affected also, therefore your trade value is way less than a couple of years ago. Again being more conservative you might find some dealers not willing to take your boat in trade at all. When those used boat values went down, dealers with large trade in inventories go hurt real badly. The dealers will not want to get caught in that position again. At New Wave Yachts we are still glad to consider your trade.
Boat show season is upon us again and early reports show traffic is way up and people are buying, I believe that people are confident we are on the rebound and people want to get on with their boating lives. Our buyers are confident that dealers and manufacturers doing business today are healthy and represent a good investment for the future.
I sure looks cold out there. Hard to believe that a forest of masts will be my view in a few months. Ten days to the New England Show, nine long days of the show and then the race begins to put together the pieces that make these boats work and deliver the dreams.
Winter in New England only a special person can love it.
Please mail comments to me at Bump@newwaveyachts.com
Bump Wilcox