A new love for boating, created by the COVID-19 pandemic
The NMMA (National Marine Manufacturers Association) published in their December 'New Powerboat Registrations Report', that a total of almost new 320,000 boats had been sold over the course of 2020. That's a 13% increase of sales compared to 2019. Recreational boating hasn't seen numbers this high since 2008. The growth ranges, across all type of powerboat segments, differed between 8% and 22%.
Not only the United States' NMMA reported numbers this favorable for the boating industry. Compared to 2019, the NMMA Canada saw a 17% increase of outboard engine sales over 2019 with a total unit sale of 44,000. Besides outboard engine sales, the NMMA Canada noticed a 73% growth in Canadians getting their Pleasure Craft Operator Card compared to the levels of 2019.
Canadians and Americans both took to that water in unequaled amounts as "boating is riding a big wave of popularity" according to Sara Anghel, president of NMMA Canada. More data is expected on the Canadian boating market with the Recreational Boating Statistical Abstract released coming spring.
As the latter part of 2020—September through December—saw a 40% increase of new boat sales compared to the previous year. The NMMAs dashboard of New Powerboat Registrations showed sales of jet boats, cruisers and fishing boats (saltwater and freshwater) reached sales increases of more than ten percent. Yachts and runabouts both had their highest number of sales in eleven and nine years respectively.
Vicky Yu, Business Intelligence director of the United States' NMMA mentioned that boat builders reported unprecedentedly low inventories, making it extremely difficult to keep up with demand for the builders. As biggest increase of sales compared to the previous year was from September through December—relatively colder years—the indication is that consumers are seizing new boats fresh off the production line.
How low inventory levels disrupt the boat production industry
The NMMA reports current inventory levels are between 20% and 60% below the normal 80% for the domestic recreational boating industry. Boat builders are working as hard as possible to keep up with the unparalleled demand we're seeing to refill the low inventories caused—and made more difficult —by the COVID-19 pandemic.
According to Vicky Yu, boat builders are working 13% above their usual levels to restock the inventories. More than 20,000 boats are being built on a monthly basis to replenish the tallies before peak season hits this year. With this disruption of the supply chain, in combination with COVID-19 related workforce issues, manufacturers will struggle to keep up with orders throughout this year. Some manufacturers have mentioned an average order backlog of up to six months, meaning the disruption in the supply chain might cause this trend to keep up for a longer time. The NMMA forecasts that boat building production will be at near 2019 production levels through 2023.
New powerboat shipment numbers are currently 12% higher than boating growth according to Yu. This means boat builders are slowly working their way through the production backlog. As manufacturers get back up to speed, and production levels this year will ebb and flow, a lot will depend on the buying activity for coming spring and summer to see what the upcoming trend will be regarding inventory levels.
What the disruption of the boat supply chain means for the boating industry
As dealers across North America are struggling to sell boats with no inventory in stuck, boat manufacturers are scrambling to catch up on production. For most boat builders, orders that come in are far surpassing the ability to produce.
One builder that has the capacity to build 100 boats on a weekly basis mentioned they are currently receiving 300 new boat orders every week. They also mention dealers are getting frustrated because they are not able to sell more boats due to lack of inventory. Other manufacturers have increased their boat producing capacity from 3 boats to 5 boats a day, and some have stopped producing their sold-out models for the entirety of 2021.
Many dealers have already pre-sold the boats they have on order at manufacturers to customers, fearing not having enough boats on stock to keep up with sales for the rest of the year. The idea of not having enough inventory could be fatal for upcoming boat shows, where many dealers and boat producers create most of their new leads.
This lack of inventory threatens the momentum boating has built up during the COVID-19 pandemic, as both manufacturers and dealers alike are looking for solutions. Many dealers mention they will order more inventory than they had in 2020, keeping the positivity that boating will keep up its popularity. Boat manufacturers mention, with current circumstances, the inventory pipeline will be replenished within 12-18 months.
What can we do about it?
Dealers and manufacturers agree 2020 was a great year for the boating industry. The unprecedented amount of people discovering a new love for boating has been a pleasant surprise for dealers and manufacturers alike. Regarding the short supply as a result of this craze for boats, this is a great way to sell as a dealership. With a record number of first-time buyers, aimed mostly at second-hand boats, dealerships have the ability to thrive.
COVID restrictions make approaching and reaching potential buyers rather difficult. Fortunately, BOATIM offers a solution for dealers and brokers to approach potential buyers and easily convert a lead into a buy. We, at BOATIM, offer a spot on our platform in combination with smart management and marketing tools to increase awareness for dealerships like yours, using our global network and community.
This is the perfect time to ride on the renewed boating wave and increase your sales, because the boating industry is ready for it.