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Bump's World - December 2011
December 7, 2011
BOAT WORLD 2012
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We are nearing the end of 2011. The last 3 years of the boat business has been interesting, exciting and more than nerve racking.
We remember all too well the economic collapse of the fall of 2008. The boat media joined the economic geniuses of the world in believing that the down turn, I'm being polite here, was short term. The banks, financial institutions and the government would get everything back to normal in short order, say 6 to 9 months tops.
Here we are 3 years later and things have not recovered at all. Even the overly optimistic boat media is having a really hard time coming up with positive industry news. I hear over and over that soon things will be getting back to normal. Well guess what, this is normal. What we had before was the fantasy and this is the reality. Everyone living on unearned home equities which were not backed by any economic reason other than it felt really good.
So here is the good news. The boat world is going on. The industry is consolidating and shrinking to meet the demand. Boat business's that were on the edge before are going away. The strongest are surviving. This is good. Boats are selling both new and used. There are a lot less new boat sales than 3 years ago and used boat have gone down significantly in price. But this is good because the used boats are getting older and older and all their little pieces are struggling to hold together. Many of these older boats are really struggling to get through survey.
Since the used boats are getting older and older, that brings hope to the new boat business. The problem here is, it is really expensive to build a new boat in todays world. In order to take advantage of new technology in building processes you need 2 things that are hard to come by in today's boat world and that is money to invest and volume. All those machines you see in the car adds, building today's cars are really expensive. The same type of machines would make boat building much more efficient. When you build 10 boats of one model the 11th is way more profitable, but you got to get 11 orders.
The new norm means you can get a lot of used boat for your buck. Boats are selling in this market and they are being sold by sellers who realize this is no longer 2005 and you need to adapt to today's market. Most of our boats with pricing and condition to reflect today's market sell in less than 90 days.
Many used boat have newer sails, electronics, etc. These upgrades add little if any additional value because normal boat ownership means doing just that, up grading. Boats need consistent attention and the many pieces are constantly wearing out. No matter how much you think you take care of your yacht, she is struggling to keep all those pieces working. So maintaining a boat like a proper owner only keeps you in the game. By the way the impeccable owner often gets shocked when the surveyor comes and tears his boat apart.
So the used boats get older and older. Again I must stress that more and more the used boats represent an incredible value. A new 40 footer is 300K, a 2 year old one is 180K and a 10 year old one is 100K. That's a lot of value.
So here is the 2012 new norm. New boats will remain in demand because the new systems and building processes are getting better all the time. New boats will remain in demand because the used boats are getting older and older. Used boats will continue to sell because they represent a great value.
New people will get into boating and some people will get tired of it. Me I live boating and can not wait for the sun to shine and to go sailing. No matter what the rest of the world is doing, I'm loving being on the water. In the new norm I still need sun block, enjoy a cold beer and a beautiful sun set.
Please mail comments to me at Bump@newwaveyachts.com
Bump Wilcox
Bump's World - December 2011
December 7, 2011
BOAT WORLD 2012
Â
We are nearing the end of 2011. The last 3 years of the boat business has been interesting, exciting and more than nerve racking.
We remember all too well the economic collapse of the fall of 2008. The boat media joined the economic geniuses of the world in believing that the down turn, I'm being polite here, was short term. The banks, financial institutions and the government would get everything back to normal in short order, say 6 to 9 months tops.
Here we are 3 years later and things have not recovered at all. Even the overly optimistic boat media is having a really hard time coming up with positive industry news. I hear over and over that soon things will be getting back to normal. Well guess what, this is normal. What we had before was the fantasy and this is the reality. Everyone living on unearned home equities which were not backed by any economic reason other than it felt really good.
So here is the good news. The boat world is going on. The industry is consolidating and shrinking to meet the demand. Boat business's that were on the edge before are going away. The strongest are surviving. This is good. Boats are selling both new and used. There are a lot less new boat sales than 3 years ago and used boat have gone down significantly in price. But this is good because the used boats are getting older and older and all their little pieces are struggling to hold together. Many of these older boats are really struggling to get through survey.
Since the used boats are getting older and older, that brings hope to the new boat business. The problem here is, it is really expensive to build a new boat in todays world. In order to take advantage of new technology in building processes you need 2 things that are hard to come by in today's boat world and that is money to invest and volume. All those machines you see in the car adds, building today's cars are really expensive. The same type of machines would make boat building much more efficient. When you build 10 boats of one model the 11th is way more profitable, but you got to get 11 orders.
The new norm means you can get a lot of used boat for your buck. Boats are selling in this market and they are being sold by sellers who realize this is no longer 2005 and you need to adapt to today's market. Most of our boats with pricing and condition to reflect today's market sell in less than 90 days.
Many used boat have newer sails, electronics, etc. These upgrades add little if any additional value because normal boat ownership means doing just that, up grading. Boats need consistent attention and the many pieces are constantly wearing out. No matter how much you think you take care of your yacht, she is struggling to keep all those pieces working. So maintaining a boat like a proper owner only keeps you in the game. By the way the impeccable owner often gets shocked when the surveyor comes and tears his boat apart.
So the used boats get older and older. Again I must stress that more and more the used boats represent an incredible value. A new 40 footer is 300K, a 2 year old one is 180K and a 10 year old one is 100K. That's a lot of value.
So here is the 2012 new norm. New boats will remain in demand because the new systems and building processes are getting better all the time. New boats will remain in demand because the used boats are getting older and older. Used boats will continue to sell because they represent a great value.
New people will get into boating and some people will get tired of it. Me I live boating and can not wait for the sun to shine and to go sailing. No matter what the rest of the world is doing, I'm loving being on the water. In the new norm I still need sun block, enjoy a cold beer and a beautiful sun set.
Please mail comments to me at Bump@newwaveyachts.com
Bump Wilcox