24.4% decrease. $31.3 billion million. spent on boating. in traditional powerboat sales. registered boats BY THE NUMBERS

Transcription

1 12.69 million registered boats $31.3 billion spent on boating 24.4% decrease in traditional powerboat sales $10.00 TRUSTED SOURCE. PROVEN SOLUTIONS. REAL RESULTS. + BY THE NUMBERS Unit sales & retail expenditures Dealer benchmarking data Customer survey results Boating participation statistics PLUS: Home price recovery bodes well for boating Excess inventory: The challenge continues

2 Lake Union Sea Ray s 16,000-foot Seattle showroom is the dealership s flagship store. Dealer Data While much of the information in this issue is prior-year data that helps define the boating season that was, with so much uncertainty these days about when, or if, the industry is going to bounce back, we also wanted to include metrics in this year s Data Book that would provide dealers with some insight into how things are going in the early part of To help do that, Spader Business Management supplied us with dealer data in 12 categories to provide a year-over-year comparison between where things stood in April 2009 and where they were as of this April. We ve also included information from Spader to provide some context as to how 2009 ranked vs. the nine years prior, our annual wage-rate information from ABBRA, our Top 100 benchmarking statistics and two charts from a spring dealer survey conducted by RBC Capital Markets. It s too soon to say that most boat dealerships are back on solid ground, but the data shows things are better than they were in 2009, even if in some cases that just means the rate of decline has slowed. $45 $40 $35 $30 $25 $20 $15 $10 $5 $0 $8.76 $8.48 $8.57 $11.40 $9.24 $10.44 $9.49 $10.44 WAGE RATE SURVEY Dockhands $12.67 $12.16 $13.55 $12.29 $13.66 $13.91 $14.10 $15.98 General Yard Labor $19.07 $18.84 $19.60 $19.14 $20.26 $22.09 $20.95 $21.93 Mechanics $24.94 $25.10 $26.21 $27.76 $27.61 $29.86 $30.04 $29.93 Service Manger $35.78 $35.79 $35.38 $38.68 $40.11 $41.11 $43.33 $41.31 General Manger This data on wage rates is taken from the American Boat Builders & Repairers Association's annual Wage Rate Survey. The information was gathered by ABBRA through Web questionnaires sent to its members. For full results of the survey, including the average wages for additional positions broken down in six U.S. Regions, contact ABBRA at MARKET DATA BOOK Boating Industry 11

3 WHAT, IF ANY, CHANGES DO YOU NEED TO TO ADAPT TO THE RECENT DOWNTURN? WHAT ARE YOUR PRELIMINARY BOAT ORDERING PLANS FOR THE NEXT 6-12 MONTHS COMPARED TO THE PRIOR YEAR? Source: RBC Capital Markets Spring 2010 and Fall 2009 Boat Dealers Survey A survey conducted by RBC Capital Markets this spring shows dealers are less likely to lower their prices and much less likely to cut orders than they were when the same survey was done last fall. In fact, preliminary plans to order boats rose substantially between RBC s fall and spring surveys. 12 Boating Industry - MARKET DATA BOOK

4 ECONOMICS DEALERS CONSUMERS MANUFACTURERS TOP 100 BENCHMARKING STATISTICS Avg. revenue per dealer $25.9 $28.8 $20.1 $17.9 $14.1 (in millions) Total number of locations Revenue per store $7.6 $8.1 $6.9 $6.5 $5.2 (in millions) Avg. CSI Score Use computerized inventory Avg. number of boat brands The average revenue per dealership, and per store, was down significantly, but the CSI average was up, as were service revenues and P&A sales, proving that Boating Industry s 2009 Top 100 Dealers found ways to adapt and overcome the downturn. The chart above tracks the averages of our Top 100 Dealers through each of the first five years of the program. The chart below offers a comparison between the average results achieved by the dealerships on our 2008 and 2009 lists. TOP 100 AVERAGES Sales as a % of revenue 73.5% 69.1% Service as a % of revenue 10.3% 11.5% Rigging as a % of revenue 1.4% 1.5% Finance & Insurance as a % of revenue 1.6% 1.6% Parts & Accessories as a % of revenue 6.6% 8.6% Marina as a % of revenue 2.3% 2.7% Storage as a % of revenue 2.3% 3.0% Rentals as a % of revenue 0.15%.57% Restaurant as a % of revenue 0.35%.23% Other as a % of revenue Avg. per store 1.5% Avg. per store 1.2% Total number of FT employees Total number of PT employees New I/O boats sold New Outboard boats sold New Inboard boats sold New Outboards sold I/Os sold for re-power Used I/O boats sold Used Outboard boats sold Used Inboard boats sold Used Outboards sold gross profit margin-boats 18.5% 17.52% 2008 gross profit margin-service 59.3% 62.78% 2008 gross profit margin-overall 18.7% 26.39% 2008 operating expenses (% of sales) 21.8% 32.23% Net as %, (calculated) 4.4% 3.22% Percent of units sold at shows 20.8% 16.25% Percent of $ sales at boat shows 20.6% 16.60% Service department efficiency 79% 76.57% Percent of sales for marketing 3.3% 2.96% MARKET DATA BOOK Boating Industry 13

5 Dealer Metrics The business metrics on the following pages provide context for a troubled 2009, but also offer hope for Inventories are down as, unfortunately, are sales, in some categories. In others, however, sales are up in our 2009 vs comparison. And, although Spader dealers are still showing a net loss, it s about half what it was last year. Spader Business Management tracks the business metrics of all of its 20 Group members as well as other dealers it works with, and shares the key performance indicators with Boating Industry on a monthly basis. To contact Spader, call or visit the company s website at NEW BOAT INVENTORY PERSONNEL EXPENSE RATIO ANNUAL NET PROFIT 4,000,000 3,500,000 3,000,000 2,500,000 2,000,000 1,500, Years % of Gross Margin Years % of Sales Years Boating Industry - MARKET DATA BOOK

6 ECONOMICS DEALERS CONSUMERS MANUFACTURERS NEW BOAT SALES 7,500,000 7,000,000 6,500,000 6,000,000 5,500,000 5,000,000 4,500,000 4,000,000 3,500,000 3,000,000 2,500, Years PRE-OWNED BOAT SALES 1,400,000 1,300,000 1,200,000 1,100,000 1,000, , , , , , Years MARKET DATA BOOK Boating Industry 15

7 NEW INVENTORY TURNOVER ADVERTISING EXPENSE RATIO SEMI-FIXED EXPENSE RATIO % of Gross Margin % of Gross Margin Years Years Years NEW UNIT GROSS MARGIN FLOOR PLAN INTEREST EXPENSE RATIO FIXED EXPENSE RATIO Years % of Gross Margin Years % of Gross Margin Years Boating Industry - MARKET DATA BOOK

8 ECONOMICS DEALERS CONSUMERS MANUFACTURERS NEW BOAT SALES YTD April 2009 vs YTD April ,020,000 1,000, , ,000 April 30, 2009 April 30, , , ,000 PRE-OWNED BOAT SALES YTD April 2009 vs YTD April , , , , ,000 April 30, 2009 April 30, , , , , , , , , ,000 P&A SALES YTD April 2009 vs YTD April 2010 April 30, 2009 April 30, 2010 FIND MORE TURNS. How quickly is your inventory moving? 176, , , adplightspeed.com 2010 ADP and Lightspeed logos are registered trademarks of ADP, Inc. MARKET DATA BOOK Boating Industry 17

9 NEW BOAT INVENTORIES PRE-OWNED BOAT INVENTORIES SERVICE SALES 3,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 YTD April 2009 vs.ytd April 2010 April 30, 2009 April 30, ,500,000 3,000,000 2,500,000 2,000,000 1,500,000 1,000, ,000 0 YTD April 2009 vs. YTD April 2010 April 30, 2009 April 30, , , , , , , , , , ,500 YTD April 2009 vs YTD April 2010 April 30, 2009 April 30, 2010 PERSONNEL EXPENSE RATIO FLOOR PLAN INTEREST EXPENSE RATIO ADVERTISING EXPENSE RATIO YTD April 2009 vs YTD April 2010 April 30, 2009 April 30, YTD April 2009 vs YTD April 2010 April 30, 2009 April 30, YTD April 2009 vs YTD April 2010 April 30, 2009 April 30, 2010 SEMI-FIXED EXPENSE RATIO FIXED EXPENSE RATIO NET PROFIT/LOSS YTD April 2009 vs YTD April 2010 April 30, 2009 April 30, YTD April 2009 vs YTD April 2010 April 30, 2009 April 30, ,000-40,000-60,000-80, , , ,000 YTD April 2009 vs YTD April 2010 April 30, 2009 April 30, Boating Industry - MARKET DATA BOOK

10 Photo courtesy of MasterCraft Boats in Use Nobody needs to be told that 2009 will not rank among the most profitable in the long history of the boating industry. But just how bad was it? The data on the following pages offers some perspective on how hard sales were to come by. Iowa was the only state that saw its total expenditures (the money spent on powerboats, outboard engines, trailers and aftermarket accessories) increase from the prior year (up 3.5 percent). Florida, which ranked first in total expenditures, saw a year-overyear drop of 23 percent in 2009, while Massachusetts, New York and California were all down more than 25 percent. The biggest plunge was in Arizona, which fell nearly 40 percent. Nationally, total expenditures dropped to $10.3 billion from $12.9 billion in Broken down by product category, sales of new powerboats fell by more than $2 billion, outboard engine sales were down more than $400 million, and expenditures on trailers dropped from $161 million to $88 million. Year-over-year aftermarket accessory sales were much more stable by comparison, falling an estimated 5 percent, to $2.3 billion, from Unless otherwise noted, all of the information in this section is excerpted from NMMA s 2009 Statistical Abstract. For more information, contact Vicky Yu at or vyu@nmma.org. To order a copy, orderdesk@nmma.org. TOP 20 STATES IN BOATING EXPENDITURES RANK COMPARED TO 08 STATE Same FLORIDA 1 Same TEXAS 2 Same CALIFORNIA 3 Moved up one spot NORTH CAROLINA 4 Fell one spot NEW YORK 5 Moved up one spot LOUISIANA 6 Moved up one spot WASHINGTON 7 Fell two spots DELAWARE 8 Moved up one spot MICHIGAN 9 Fell one spot MINNESOTA 10 Moved up one spot ALABAMA 11 Fell one spot WISCONSIN 12 Moved up two spots VIRGINIA 13 Same GEORGIA 14 Dropped two spots SOUTH CAROLINA 15 Same ILLINOIS 16 Moved up one spot TENNESSEE 17 Dropped one spot NEW JERSEY 18 Moved up one spot OHIO 19 Dropped one spot MISSOURI Boating Industry - MARKET DATA BOOK

11 REGISTRATION AND EXPENDITURES SNAPSHOT 3/3 CALIFORNIA 26/27 OREGON 7/19 WASHINGTON 46/40 NEVADA 32/36 Non-Contiguous Alaska 31/44 Hawaii 50/50 IDAHO 39/39 35/30 ARIZONA UTAH 38/37 MONTANA 48/49 WYOMING 37/34 COLORADO 47/47 NEW MEXICO 42/44 NORTH DAKOTA 45/42 SOUTH DAKOTA 43/38 NEBRASKA 41/35 21/24 10/2 29/21 20/14 24/22 2/6 6/15 TEXAS KANSAS OKLAHOMA MINNESOTA IOWA MISSOURI ARKANSAS LOUISIANA 12/5 WISCONSIN 27/17 INDIANA 16/10 ILLINOIS 9/4 17/18 28/25 11/16 MISSISSIPPI TENNESSEE MICHIGAN ALABAMA 30/28 KENTUCKY 19/9 OHIO 14/12 GEORGIA 44/43 WEST VIRGINIA 22/13 13/20 4/11 15/8 1/1 FLORIDA PENNSYLVANIA VIRGINIA NORTH CAROLINA SOUTH CAROLINA 49/48 NEW YORK 5/7 VERMONT 34/32 NEW HAMPSHIRE 36/33 MASSACHUSETTS 25/29 RHODE ISLAND CONNECTICUT 40/46 33/31 18/26 8/41 23/23 DISTRICT OF COLUMBIA 51/51 NEW JERSEY DELAWARE MARYLAND MAINE Ranking in U.S. $ spent on boating Ranking in boat registrations RECREATIONAL BOATS IN USE BY BOAT TYPE TOTAL RECREATIONAL BOATS IN USE REGISTERED BOATS/Documented (millions) NON-REGISTERED BOATS (millions) Million Millions est. OUTBOARD BOATS (millions) INBOARD BOATS (millions) STERNDRIVE BOATS (millions) PERSONAL WATERCRAFT (millions) SAILBOATS (millions) OTHER (millions) est. 22 Boating Industry - MARKET DATA BOOK

12 PARTICIPATION IN BOATING AND RELATED RECREATIONS Participations % change Last years in millions from ranking 1. Exercise Walking % 1 2. Exercising with Equipment % 3 3. Camping (vacation/overnite) % 5 4. Swimming % 2 5. Bowling % 4 6. Workout at Club % 8 7. Bicycle Riding % 6 8. Weight Lifting % Hiking % Aerobic Exercising % Fishing % Running/Jogging % Billiards/Pool % Basketball % Boating, Motor/Power % Golf % Target Shooting (net) % 18. Hunting with Firearms % Yoga % Soccer % Table Tennis 13.3 na 22. Backpack/Wilderness Camp % Dart Throwing 12.2 na Source: National Sporting Goods Association Participations % change Last years in millions from ranking 24. Softball % Baseball % Tennis % Volleyball % Football (tackle) % Skateboarding % Mountain Biking (off road) % Scooter Riding % In-Line Roller Skating % Archery (target) 7.1 na 34. Skiing (alpine) % Paintball Games % Snowboarding % Hunting w/bow & Arrow % Water Skiing % Target Shooting - Airgun % Kayaking 4.9 na 41. Gymnastics 3.9 na 42. Muzzleloading % Hockey (ice) % Wrestling 3.0 na 45. Skiing (cross country) % 41 *Percent Change is from Participation - Ranked by Total Participation Participated more than once (in millions) Seven (7) years of age and older MARKET DATA BOOK Boating Industry 23

13 % OF SQ. MILES MILES Sales in thousands of U.S. Dollars % OF POPULATION REGISTERED REG. PEOPLE INLAND COASTAL POWER OUTBOARD TOTAL BOATS 2008 BOATS PER BOAT WATER SHORELINE BOATS MOTORS TRAILERS ACCESSORIES TOTAL SALES NEW ENGLAND 534, % $349,391 $79,737 $3,428 $90,929 $523, % Connecticut 3,483, , % $71,359 $16,474 $685 $18,184 $106, % Maine 1,306, , % ,523 3,478 $58,586 $13,462 $709 $18,641 $91, % Massachusetts 6,433, , % ,717 1,519 $103,234 $33,056 $901 $24,077 $161, % New Hampshire 1,288,000 96, % $57,415 $7,450 $718 $18,744 $84, % Rhode Island 1,076,000 42, % $43,074 $6,821 $228 $6,374 $56, % Vermont 619,000 30, % $15,723 $2,474 $187 $4,909 $23, % SOUTH ATLANTIC 2,691, % $1,844,525 $509,967 $21,457 $564,611 $2,940, % Delaware 817,000 56, % $298,338 $8,131 $712 $22,864 $330, % District of Columbia 563,000 2, % $3,969 $5,580 $12 $355 $9, % Florida 17,019, , % ,761 8,426 $717,092 $257,869 $7,881 $207,791 $1,190, % Georgia 8,685, , % ,522 2,344 $151,808 $43,454 $2,788 $72,071 $270, % Maryland 5,509, , % ,633 3,190 $114,985 $30,078 $1,319 $34,697 $181, % North Carolina 8,407, , % ,103 3,375 $230,374 $69,081 $3,565 $92,349 $395, % South Carolina 4,147, , % ,896 2,876 $133,884 $45,350 $2,342 $60,536 $242, % Virginia 7,386, , % ,171 3,315 $167,815 $44,157 $2,289 $59,804 $274, % West Virginia 1,810,000 49, % $26,260 $6,267 $549 $14,144 $47, % MIDDLE ATLANTIC 1,009, % $520,031 $113,647 $6,441 $169,147 $809, % New Jersey 8,638, , % ,303 1,792 $150,810 $30,841 $1,605 $42,536 $225, % New York 19,190, , % ,251 1,850 $249,418 $51,624 $2,937 $77,198 $381, % Pennsylvania 12,365, , % , $119,803 $31,182 $1,899 $49,413 $202, % EAST NORTH CENTRAL 2,517, % $695,007 $187,934 $12,375 $320,875 $1,216, % Illinois 12,654, , % ,324 - $136,070 $37,838 $2,216 $57,618 $233, % Indiana 6,196, , % $81,660 $21,507 $1,549 $39,972 $144, % Michigan 10,080, , % ,001 - $182,470 $45,530 $3,314 $85,906 $317, % Ohio 11,436, , % ,875 - $137,741 $30,695 $1,990 $51,965 $222, % Wisconsin 5,472, , % ,190 - $157,066 $52,364 $3,306 $85,414 $298, % WEST NORTH CENTRAL 1,698, % $456,332 $147,155 $9,001 $232,829 $845, % Iowa 2,944, , % $75,860 $19,183 $1,308 $33,884 $130, % Kansas 2,724,000 91, % $32,102 $7,538 $591 $15,243 $55, % Minnesota 5,059, , % ,326 - $155,524 $60,157 $3,334 $86,249 $305, % Missouri 5,704, , % $117,001 $33,944 $2,181 $56,531 $209, % Nebraska 1,739,000 83, % $27,678 $7,390 $523 $13,503 $49, % North Dakota 634,000 46, % ,710 - $27,282 $10,888 $581 $14,991 $53, % South Dakota 764,000 56, % ,224 - $20,885 $8,055 $483 $12,428 $41, % EAST SOUTH CENTRAL 909, % $438,410 $140,846 $12,452 $209,474 $796, % Alabama 4,501, , % , $169,856, $48,990 $3,027 $78,262 $300, % Kentucky 4,118, , % $66,812 $25,678 $1,321 $34,079 $127, % Mississippi 2,881, , % , $68,516 $27,897 $1,460 $37,638 $135, % Tennessee 5,842, , % $133,226 $37,921 $2,296 $59,495 $232, % WEST SOUTH CENTRAL 1,295, % $918,188 $290,730 $16,519 $426,797 $1,652, % Arkansas 2,726, , % ,107 - $90,045 $29,178 $1,931 $49,802 $170, % Louisiana 4,496, , % ,277 7,721 $172,128 $97,379 $3,754 $96,812 $370, % Oklahoma 3,512, , % ,224 - $126,198 $21,569 $2,139 $55,261 $205, % Texas 22,119, , % ,687 3,359 $529,817 $142,604 $8,695 $224,922 $906, % MOUNTAIN 600, % $355,037 $43,305 $9,068 $111,666 $514, % Arizona 5,581, , % $59,631 $7,114 $851 $22,120 $89, % Colorado 4,551,000 95, % $55,905 $7,747 $718 $18,699 $83, % Idaho 1,366,000 89, % $90,265 $6,883 $603 $16,513 $114, % Montana 918,000 84, % ,490 - $47,972 $7,635 $657 $17,154 $73, % Nevada 2,241,000 57, % $27,289 $3,358 $370 $9,624 $40, % New Mexico 1,875,000 33, % $17,222 $2,906 $332 $8,548 $29, % Utah 2,351,000 73, % ,736 - $39,020 $4,390 $5,340 $13,801 $57, % Wyoming 501,000 27, % $17,733 $3,272 $197 $5,207 $26, % PACIFIC 1,366, % $,378 $184,193 $13,767 $210,132 $1,338, % Alaska 649,000 47, % ,050 33,904 $72,726 $31,078 $476 $13,297 $117, % California 35,484, , % ,734 3,427 $282,280 $43,493 $3,356 $88,046 $417, % Hawaii 1,258,000 15, % ,508 1,052 $10,085 $4,635 $113 $2,998 $17, % Oregon 3,506, , % ,383 1,410 $101,032 $20,248 $975 $25,999 $148, % Washington 6,131, , % ,720 3,026 $238,018 $46,129 $1,958 $52,629 $338, % TOTALS 290,810,000 12,622, % ,084 88,633 $6,281,061 $1,658,551 $88,466 $2,309,300 $10,337, % Numbers are rounded and may not reflect, in some cases, the exact actual numbers. 24 Boating Industry - MARKET DATA BOOK

14 WHO OR WHAT PROMPTED YOUR VISIT? MARINE CUSTOMER SATISFACTION AVERAGES 2009 # of Responses Boat Show Boat Trader Boat Tree Website Direct Mail Piece Drive By (sign)/ Driving around etc. Internet/Website Magazine Ad Newspaper Ad No Rating Given Other or Don't Know Radio Ad Referred By Someone Repeat Customer Show/Display TV/Cable Ad Yellow Pages Prompted by % 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 97.37% 96.8% 91.01% 99.12% 99.45% Would you recommend (co)? Would you do business again with (co)? Was everything done to your satisfaction? Did salesperson treat you with courtesy & concern? Satisfied with treatment by personnel? The information in the graphs above are the results of a recent survey conducted by Customer Service Intelligence Inc. for its marine clients. The responses are taken from the sales and service customers of those clients. For more information on CSI Programs and industry statistics contact Fran Olsen at folsen@tellcsi.com or ; MARKET DATA BOOK Boating Industry 25

15 The Retail Boat Market Sales of new boats fell 24.4 percent in 2009 as outboard boats (-22.4 percent), inboard boats: ski/wakeboard (-27 percent), inboard boats: cruisers (-28.6 percent) and sterndrive boats (-31 percent) all tumbled from New unit sales were down across the board in nearly every segment. However, to see the truly unprecedented nature of what the industry experienced in 2009, look beyond the year-over-year results and compare last year s numbers with all the years before. In nine segments you will find the sales numbers for 2009 are the low-water mark in the history of our Data Book. Unfortunately, they re actually even worse than that. If you study the NMMA source data, the sales numbers in five categories outboard boats, sterndrive boats, sailboats, boat trailers and outboard motors are as low as they ve been in the 30 years tracked by the 2009 NMMA Abstract. The news wasn t all bad. Total sales of pre-owned units rose 7.7 percent, from 724,500 in 2008 to 780,300 in Sales of outboard boats jumped 9.0 percent, while inboard boats fell just 3.2 percent and pre-owned sterndrive boats were up 6.4 percent. Unless otherwise noted, all of the information in this section is excerpted from NMMA s 2009 Statistical Abstract. For more information, contact Vicky Yu at or vyu@nmma.org. To order a copy, orderdesk@nmma.org. Billions RETAIL EXPENDITURE ESTIMATES FOR RECREATIONAL BOATING $45 $40 $35 $30 $25 $20 $15 $10 $5 $ Pre-owned Total Boat and Motor Expenditures Estimated Other (fuel, finance, insurance, docking, maintenance, etc.) Total New Boat and Motor Expenditures Estimated Accessory Aftermarket Sales MARKET DATA BOOK Boating Industry 27

16 YEAR OVER YEAR NEW BOATS UNITS SOLD YEAR OVER YEAR YEAR UNITS SOLD POWERBOATS , , , , , , , , ,300* 311, , , ,900** 295, , , , , , , , , , , , ,550 Source: NMMA 2008 Abstract * began tracking kayaks ** began tracking inflatables For comparison purposes, the powerboats column includes outboard boats, inboard boats (both ski/wakeboard and cruisers) and sterndrive boats. Outboard Boats Outboard Engines Boat Trailers Inboard Boats Sterndrive Boats Canoes Kayaks Inflatables Personal Watercraft Jet Boats Thousands RETAIL EXPENDITURES (IN BILLIONS) New Boat Retail Dollars $ $ $ $ $ $9.177 $6.847 Used Boat Retail Dollars $7.362 $7.901 $9.112 $ $9.641 $9.451 $9.840 New Outboard Engine Retail Dollars $2.555 $2.879 $3.155 $3.255 $2.689 $2.071 $1.659 Used Outboard Engine Retail Dollars $1.566 $1.765 $1.934 $1.947 $1.741 $1.479 $1.621 New Boat Trailer Retail Dollars $.202 $.228 $.247 $.296 $.232 $.162 $.088 Subtotal: Boat/Motor/Trailer Dollars $ $ $ $ $ $ $ Estimated Accessory Aftermarket Sales $2.124 $2.421 $2.905 $2.760 $2.608 $2.431 $2.309 Estimated Other (fuel, finance, insurance, docking, maintenance etc.) $6.448 $7.006 $8.389 $8.808 $8.842 $9.038 $8.457 Total Expenditures $ $ $ $ $ $ $ Source: NMMA 2007 Abstract 28 Boating Industry - MARKET DATA BOOK

17 OUTBOARD BOATS 10-YEAR REVIEW OF SALES & AVERAGE PRICE OUTBOARD ENGINES 10-YEAR REVIEW OF SALES & AVERAGE PRICE YEAR UNITS SOLD RETAIL VALUE AVERAGE UNIT COST ,200 $2,306,577,000 $9, ,800 $2,195,859,600 $10, ,000 $2,280,908,000 $10, ,100 $2,742,825,960 $13, ,600 $2,867,571,600 $13, ,300 $3,200,861,700 $15, ,200 $3,215,742,200 $15, ,700 $3,358,540,400 $17, ,400 $2,803,000,000 $18, ,500 $2,157,000,000 $18,356 Source: NMMA 2009 Abstract YEAR UNITS SOLD RETAIL VALUE AVERAGE UNIT COST ,700 $2,901,881,400 $8, ,100 $2,411,045,100 $8, ,100 $2,478,838,900 $8, ,400 $2,554,533,600 $8, ,300 $2,879,002,858 $9, ,000 $3,154,904,900 $10, ,700 $3,255,410,900 $10, ,500 $2,689,037,900 $9, ,000 $2,071,000,000 $9, ,700 $1,659,000,000 $9,178 Source: NMMA 2009 Abstract 2009 FIBERGLASS OUTBOARD BOATS MARKET SHARE FIBERGLASS TRACKER Nitro/Tahoe 2 RANGER 3 CAROLINA SKIFF 4 SKEETER 5 TRITON BOATS 6 STRATOS 7 HURRICANE 8 KEY WEST 9 BOSTON WHALER 10 TRIUMPH BOATS COMBINED SHARE: 58% FIBERGLASS RANGER 2 CAROLINA SKIFF 3 SEA HUNT BOATS 4 TRITON BOATS 5 HURRICANE 6 TRACKER Nitro/Tahoe 7 NAUTIC STAR 8 SKEETER 9 SEAFOX 10 TRIUMPH BOATS COMBINED SHARE: 44% FIBERGLASS >24 1 GRADY WHITE 2 BOSTON WHALER 3 CONTENDER 4 EVERGLADES 5 PURSUIT 6 SEAFOX 7 HYDRA SPORTS 8 REGULATOR MARINE 9 CAROLINA SKIFF 10 SAILFISH COMBINED SHARE: 41% Source: Info-Link; 305/ ; info@info-link.com 2008 MARKETSHARE 1 RANGER 2 TRACKER Nitro/Tahoe 3 CAROLINA SKIFF 4 TRITON BOATS 5 SKEETER 6 STRATOS 7 HURRICANE 8 KEY WEST 9 BOSTON WHALER 10 SEA HUNT BOATS COMBINED SHARE: 58% 2008 MARKETSHARE 1 RANGER 2 HURRICANE 3 TRACKER Nitro/Tahoe 4 CAROLINA SKIFF 5 TRITON BOATS 6 SEA HUNT BOATS 7 NAUTIC STAR 8 SEA PRO 9 SKEETER 10 PATHFINDER COMBINED SHARE 44% 2008 MARKETSHARE 1 GRADY WHITE 2 BOSTON WHALER 3 CONTENDER 4 SEAFOX 5 REGULATOR MARINE 6 INTREPID 7 PURSUIT 8 EVERGLADES 9 HYDRA SPORTS 10 CENTURY COMBINED SHARE 42% 2009 ALUMINUM OUTBOARD BOATS MARKET SHARE ALUMINUM TRACKER 2 ALUMACRAFT 3 G3 4 LOWE 5 LUND 6 TRITON BOATS 7 CRESTLINER 8 SMOKER CRAFT 9 XPRESS 10 SYLVAN COMBINED SHARE: 69% ALUMINUM TRACKER 2 BENNINGTON 3 GODFREY 4 PREMIER 5 FOREST RIVER 6 AVALON & TAHOE 7 BENTLEY 8 CREST 9 HARRIS KAYOT 10 SYLVAN COMBINED SHARE: 67% ALUMINUM >24 1 BENNINGTON 2 GODFREY 3 TRACKER 4 FOREST RIVER 5 CREST 6 PREMIER 7 HARRIS KAYOT 8 G3 9 J C MANUFACTURING 10 TRITON BOATS COMBINED SHARE: 71% Source: Info-Link; 305/ ; info@info-link.com 2008 MARKETSHARE 1 TRACKER 2 ALUMACRAFT 3 G3 4 LUND 5 LOWE 6 CRESTLINER 7 TRITON BOATS 8 XPRESS 9 SMOKER CRAFT 10 BENNINGTON COMBINED SHARE: 68% 2008 MARKETSHARE 1 TRACKER 2 BENNINGTON 3 GODFREY 4 PREMIER 5 BENTLEY 6 CREST 7 AVALON & TAHOE 8 LOWE 9 HARRIS KAYOT 10 FOREST RIVER COMBINED SHARE: 67% 2008 MARKETSHARE 1 GODFREY 2 TRACKER 3 BENNINGTON 4 CREST 5 PREMIER 6 FOREST RIVER 7 HARRIS KAYOT 8 J C MANUFACTURING 9 G3 10 ALOHA COMBINED SHARE 72% MARKET DATA BOOK Boating Industry 29

18 STERNDRIVE BOATS 16-YEAR REVIEW OF SALES & AVERAGE PRICE YEAR TOTAL UNITS SOLD RETAIL VALUE AVERAGE UNIT COST ,000 $1,668,780,000 $18, ,600 $1,791,310,000 $19, ,500 $1,925,248,500 $20, ,000 $2,068,528,000 $22, ,700 $1,746,696,000 $22, ,600 $2,054,476,000 $25, ,400 $2,253,843,200 $28, ,000 $2,216,448,000 $30, ,300 $2,192,929,200 $31, ,200 $2,221,115,600 $32, ,100 $2,368,085,700 $33, ,300 $2,573,331,420 $35, ,700 $2,724,065,700 $40, ,400 $2,671,928,300 $44, ,500 $1,789,000,000 $46, ,550 $1,244,000,000 $46,858 Source: NMMA 2009 Abstract INBOARD CRUISERS 16-YEAR REVIEW OF SALES & AVERAGE PRICE YEAR TOTAL UNITS SOLD RETAIL VALUE AVERAGE UNIT COST ,200 $890,681,400 $212, ,460 $1,169,504,700 $214, ,350 $1,215,268,550 $227, ,300 $1,669,103,100 $264, ,700 $1,704,245,500 $254, ,000 $1,799,420,000 $257, ,300 $2,925,756,200 $284, ,800 $3,758,475,600 $348, ,200 $3,748,551,000 $367, ,100 $3,019,926,200 $372, ,600 $3,334,830,600 $387, ,800 $3,118,557,000 $399, ,900 $3,069,614,900 $444, ,200 $2,888,122,600 $465, ,200 $2,548,000,000 $606, ,000 $1,921,000,000 $640,418 Source: NMMA 2009 Abstract FIBERGLASS BAYLINER 2 TAHOE 3 SEA RAY 4 GLASTRON 5 FOUR WINNS 6 STINGRAY 7 MAXUM 8 CHAPARRAL 9 LARSON 10 CROWNLINE 2009 FIBERGLASS STERNDRIVE BOATS MARKET SHARE COMBINED SHARE: 84% FIBERGLASS SEA RAY 2 CHAPARRAL 3 FOUR WINNS 4 TAHOE 5 COBALT 6 GLASTRON 7 CROWNLINE 8 BAYLINER 9 MONTEREY 10 LARSON COMBINED SHARE: 75% 2008 MARKETSHARE 1 BAYLINER 2 SEA RAY 3 TAHOE 4 GLASTRON 5 FOUR WINNS 6 STINGRAY 7 CHAPARRAL 8 CROWNLINE 9 MAXUM 10 LARSON COMBINED SHARE 84% 2008 MARKETSHARE 1 SEA RAY 2 CHAPARRAL 3 FOUR WINNS 4 COBALT 5 TAHOE 6 CROWNLINE 7 GLASTRON 8 BAYLINER 9 MONTEREY 10 LARSON COMBINED SHARE 75% FIBERGLASS > 24 1 SEA RAY 2 CHAPARRAL 3 COBALT 4 REGAL 5 CROWNLINE 6 RINKER 7 BAYLINER 8 FOUR WINNS 9 FORMULA 10 MONTEREY COMBINED SHARE: 77% Source: Info-Link; 305/ ; info@info-link.com 2008 MARKETSHARE 1 SEA RAY 2 CHAPARRAL 3 COBALT 4 RINKER 5 CROWNLINE 6 REGAL 7 FORMULA 8 FOUR WINNS 9 MONTEREY 10 LARSON COMBINED SHARE 76% 30 Boating Industry - MARKET DATA BOOK

19 INFLATABLES 7-YEAR REVIEW OF SALES & AVERAGE PRICE YEAR UNITS SOLD RETAIL VALUE AVERAGE UNIT COST ,500 $67,417,200 $2, ,600 $64,677,300 $2, ,100 $57,551,200 $1, ,100 $48,229,600 $1, ,400 $117,961,200 $4, ,300 $84,000,000 $2, ,700 $84,000,000 $3,868 Source: NMMA 2009 Abstract 2009 FIBERGLASS INBOARD BOATS MARKET SHARE FIBERGLASS INBOARD > 24 1 SEA RAY 2 TIARA 3 MERIDIAN 4 MALIBU 5 CRUISERS 6 MASTERCRAFT 7 SILVERTON 8 RANGER TUGS 9 CARVER 10 PURSUIT COMBINED SHARE: 50% Source: Info-Link; 305/ ; info@info-link.com 2009 SKI BOATS MARKET SHARE INBOARD SKI BOATS 1 MASTERCRAFT 2 MALIBU 3 CORRECT CRAFT 4 MOOMBA 5 CENTURION 6 SUPRA 7 TIGE 8 SANGER 9 SKI SUPREME 10 MB SPORTS COMBINED SHARE: 99% 2008 MARKETSHARE 1 SEA RAY 2 TIARA 3 MERIDIAN 4 MALIBU 5 CARVER 6 CRUISERS 7 SILVERTON 8 FORMULA 9 VIKING YACHT 10 MAINSHIP COMBINED SHARE 50% 2008 MARKETSHARE 1 MASTERCRAFT 2 MALIBU 3 CORRECT CRAFT 4 MOOMBA 5 CENTURION 6 SUPRA 7 TIGE 8 SANGER 9 MB SPORTS 10 SKI SUPREME COMBINED SHARE 99% PWC 16-YEAR REVIEW OF SALES & AVERAGE PRICE YEAR UNITS SOLD RETAIL VALUE AVERAGE UNIT COST ,000 $804,430,000 $5, ,000 $1,144,400,000 $5, ,000 $1,208,648,000 $6, ,000 $1,135,904,000 $6, ,000 $868,530,000 $6, ,000 $771,044,000 $7, ,000 $720,176,000 $7, ,900 $641,456,100 $7, ,300 $697,681,400 $8, ,600 $716,501,800 $8, ,500 $733,454,700 $9, ,200 $761,531,000 $9, ,200 $792,079,200 $9, ,900 $793,460,800 $9, ,600 $670,000,000 $10, ,500 $500,000,000 $11,242 Source: NMMA 2009 Abstract SKI WAKEBOARD BOATS 16-YEAR REVIEW OF SALES & AVERAGE PRICE YEAR TOTAL UNITS SOLD RETAIL VALUE AVERAGE UNIT COST ,200 $142,776,000 $19, ,900 $147,660,000 $21, ,000 $126,234,000 $21, ,100 $136,408,200 $22, ,900 $253,348,700 $23, ,100 $308,429,000 $25, ,600 $366,438,400 $26, ,100 $352,569,300 $31, ,500 $398,811,000 $37, ,100 $403,289,600 $36, ,600 $435,382,800 $37, ,600 $507,742,200 $40, ,100 $568,357,200 $43, ,000 $566,804,600 $47, ,900 $449,000,000 $50, ,500 $348,000,000 $53,516 Source: NMMA 2009 Abstract 32 Boating Industry - MARKET DATA BOOK

20 JET BOATS 15-YEAR REVIEW OF SALES & AVERAGE PRICE YEAR UNITS SOLD RETAIL VALUE AVERAGE UNIT COST ,700 $141,796,000 $9, ,100 $143,280,000 $10, ,700 $144,389,700 $12, ,100 $167,033,800 $16, ,800 $132,678,000 $17, ,000 $123,641,000 $17, ,200 $118,692,800 $19, ,100 $107,997,600 $21, ,600 $115,268,200 $20, ,600 $130,368,000 $23, ,700 $168,223,600 $25, ,200 $151,549,100 $24, ,800 $188,928,300 $27, ,900 $138,000,000 $28, ,550 $160,000,000 $29,774 Source: NMMA 2009 Abstract TRAILERS 16-YEAR REVIEW OF SALES & AVERAGE PRICE YEAR UNITS SOLD RETAIL VALUE AVERAGE UNIT COST ,000 $162,976,000 $ ,000 $194,994,000 $ ,000 $189,344,000 $ ,000 $190,050,000 $1, ,000 $189,660,000 $1, ,000 $190,008,000 $1, ,500 $184,494,000 $1, ,900 $181,698,300 $1, ,200 $200,645,200 $1, ,600 $202,012,100 $1, ,400 $228,037,400 $1, ,100 $247,548,600 $1, ,900 $295,874,800 $2, ,200 $232,088,000 $1, ,400 $162,000,000 $1, ,900 $88,000,000 $1,555 Source: NMMA 2009 Abstract MARKET DATA BOOK Boating Industry 33

21 SAILBOATS 16-YEAR REVIEW OF SALES & AVERAGE PRICE UNITS SOLD IN U.S. DOLLARS YEAR TOTAL UNITS SOLD RETAIL VALUE AVERAGE UNIT COST ,000 $266,680,000 N/A ,560 $287,520,000 N/A ,310 N/A N/A ,500 N/A N/A ,500 N/A N/A ,850 N/A N/A ,500 $760,622,900 $33, ,600 $638,640,300 $34, ,800 $567,782,400 $35, ,000 $539,744,700 $35, ,300 $603,381,900 $42, ,400 $646,928,417 $44, ,900 $652,186,900 $50, ,800 $716,350,100 $60, ,300 $448,000,000 $48, ,400 $197,000,000 $36,503 Source: NMMA 2009 Abstract; The Sailing Company s Annual Sailing Business Review Outboard Boats Outboard Engines Boat Trailers Inboard Boats Ski/ Wakeboard Boats Inboard Boats Cruisers Sterndrive Boats Canoes Kayaks Inflatables Personal Watercraft Jet Boats Houseboats $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 Billions MARKET DATA BOOK Boating Industry 35

22 SECTION SPONSORS V o l u m e 7 3 N u m b e r 8 ECONOMICS Section Presented by: Teleflex See ad on page 5 & 14 DEALERS Section Presented by: SeaWide Distribution See ad on page 10 CONSUMERS Section Presented by: Protective See ad on page 21 Columns 4 At The Helm Uncertain times Features 6 ECONOMICS p. 6 Excess inventory continues to be a challenge p. 8 Home price recovery bodes well for boating 11 DEALERS p. 11 ABBRA Wage Rate Survey p. 12 RBC Survey Data p. 13 Boating Industry Top 100 Dealer s statistics p. 14 Spader Benchmarking Data 20 CONSUMERS p. 20 Top-20 States in Boating Expenditures p. 22 State-by-State Registrations & Expenditures p. 22 Recreational Boats in Use by Type p. 22 Total Recreational Boats in Use p. 23 NSGA Boating Participation Data p. 24 State-by-State Boat Registration Data p. 25 CSI Customer Satisfaction Survey Results 27 MANUFACTURERS p. 27 The Retail Boat Market p. 29 Outboard Boats p. 29 Outboard Engines p. 30 Sterndrive Boats p. 30 Inboard Boats: Cruisers p. 32 Inflatables p. 32 Personal Watercraft p. 32 Inboard Boats: Ski/Wakeboard p. 33 Jet Boats p. 33 Trailers p. 35 Sailboats insider.boating-industry.com MANUFACTURERS Section Presented by: Peters & May See ad on page Where will the next generation of marine leaders come from, by Christopher Kourtakis, director of sales and marketing, 360 Industry Solutions, provoked the most discussion on our blog site over the last few weeks. Here is an excerpt: There seems to be a large generation gap in a lot of dealerships, suppliers and boat builders. Experienced owners know how to handle these types of downturns, but what about someone who is up-and-coming? Will they know how to handle something like this in the future, or will they make the same decisions current owners and business leaders have made? If something were to happen to you, who would run your facility, or would the business close? To read more of this blog and others, please visit insider.boating-industry.com. TOP 5 STORIES In case you missed it Here are five recent top stories from Boating Industry s e-newsletter, according to traffic logs: 1. Dealer accuses Textron of fraud, Textron files countersuit 2. New boat sales dip after strong first quarter 3. Bill containing Florida boat sales-use tax cap signed 4. Why Brunswick kept printing in-house 5. FTC again delays enforcement of Red Flags Rule Subscribe today at MARKET DATA BOOK Boating Industry 3

23 Uncertain times An anonymous author once wrote that, Anyone who isn t confused here doesn t really understand what s going on. For a number of reasons, that statement applies here as well, so let me first identify and then do my best to eliminate what confusion I can. First of all, for those of you who are confused as to why my ugly mug has shown up on this page again, let me formally announce that our recently named editor-in-chief Liz Walz is on maternity leave caring for her wonderful new baby boy, and is scheduled to return sometime in late August or early September. So that means you ll have to deal with me for another month or so. Sorry. The second point of confusion, I believe, is the state of the marine industry. You know, we produce this Market Data Book every year in an attempt to somehow provide clarity to the ups and downs and ins and outs of the marine market. When we first launched this concept back in 2004, things were great. The industry had been on the rise, and the numbers made logical sense from a growth perspective. Over the last few years, of course, the numbers haven t been so grand. By all indications, they began their decline in the spring of 2005 and, up until just recently, it seemed the rate of decline had been accelerating. Just in the last couple quarters, however, that rate of decline has begun to decelerate news that s good to hear, but not exactly what we ve all been looking forward to just yet. For now though, that slowdown has added confusion to the market. It s almost as though just because things aren t getting worse at the same pace, we feel like things are getting better. To compound the confusion, most dealers who we ve spoken to regarding the state of the market had been suggesting that things were going well through April. Now, however, many of those same dealers are suggesting that the business has dried up and gone away, as though May Day was a signal to scream mayday! A recent report from Tim Conder, a Wachovia analyst, doesn t do anything to clear up the confusion. It simply points out that, although we thought the market would be down 10 percent through the second quarter, it s really more like 17- to 20-percent down through May. Conder outlines a bevy of considerations that don t provide a very optimistic outlook going forward. He suggests that the availability (and affordability) of retail credit, poor consumer confidence, uncertain stability in the European market, expiring tax cuts, forthcoming taxes and the Gulf oil spill will all add up to where the best case scenario for the marine industry to return to peak retail demand is now in 2014 or 2015 with around 180, ,000 units. Simply stated, there s no better time than now to ensure that you re keeping an eye on market data that is relevant to your business. Start with this Data Book. And then keep an eye out for a forthcoming e- white paper and more new product launches from Boating Industry to help you manage your business and understand what s going on better than ever before. AT THE HELM MATT GRUHN mgruhn@affinitygroup.com Group Publisher/Editorial Director Matt Gruhn (mgruhn@affinitygroup.com) Editor-in-Chief Liz Walz (lwalz@affinitygroup.com) Managing Editor Jon Mohr (jmohr@affinitygroup.com) Online Editor Mike Davin (mdavin@affinitygroup.com) Art Director Dodi Vessels Production Coordinator Chris Soash Associate Publisher/Director of Sales Amy Collins (acollins@affinitygroup.com) 763/ Advertising Sales Manager Kathy Johnson (kathyjohnson@affinitygroup.com) 480/ Publishing Group Coordinator Lori Hackett Contributors Greg Proteau France & Switzerland Sales Representative Daniel Solnica (dsolnica@club-internet.fr) President/Boating Media Stephen M. Hedlund Sr. V.P./Advertising Steve Schiffman V.P./Boating Media Tammy Galvin V.P./Production Barb Hammer Digital Media Consultant Stacey Marmolejo Production Specialist Cherri Perschmann, Marketing & Communications Manager Jeffrey Larson, Circulation Director Jill Anderson, Consumer Marketing Manager Jack Schabel, Circulation Consultant Rebecca Sterner, Online Managing Editor John Galvin, Digital Media Specialist Heather Smith-Brown Chairman Steve Adams Chief Executive Officer Michael Schneider V.P./Chief Financial Officer Tom Wolfe BOATING INDUSTRY (ISSN# ) is published monthly except for an issue in November by Ehlert Publishing Group, Inc., 6420 Sycamore Lane N., Maple Grove, MN Periodicals postage paid at Maple Grove, MN and additional mailing offices. SUBSCRIPTION INFORMATION: Free to qualified members of the boating industry. Annual subscription rate is $99 per year for U.S., Mexican and Canadian residents and $149 for residents of other international countries. All paid subscription are paid in advance and in U.S. funds only. POSTMASTER: Send address changes to Boating Industry, P.O. Box 5858, Harlan, IA CUSTOMER SERVICE: Visit bincustserv@cdsfulfillment.com, call or write to Boating Industry, P.O. Box 5858, Harlan, IA For information about reprints from Boating Industry, contact Wright's Reprints, 877/ Printed in U.S.A. 4 Boating Industry - MARKET DATA BOOK

24 Excess inventory continues to be a challenge The new boat market remains weak as the industry continues to digest field inventory. By Peter Houseworth, Info-Link In a Boating Industry article this time last year, we looked at the composition of inventory moving through the retail pipeline referred to as Days in Inventory. This analysis has been updated to include data through May The chart to the right shows the trend in new unit sales based on Info-Link s Bellwether Report juxtaposed against the average days in inventory for the same period. Days in Inventory is calculated based on the average number of days between production of the boat and sale to the end consumer. Historically, the normal time in distribution has averaged in the 225-day range. Notwithstanding a few upward blips over the last four years, the chart indicates that the downward cyclical trend in unit sales began in Over the same period, average inventory slowly crept up, indicating that at least initially, the industry worked actively to control field inventory in the face of downward unit sales pressure. However, a further and significant deterioration in unit sales in 2008 appears to have caught the industry by surprise resulting in significantly longer average inventory days, a condition that persists through May Average inventory days peaked at 433 days in October 2009, indicating that, on average, boats retailed were in inventory for 14 months, nearly two times the historical average. With respect to unit volumes, the graph illustrates that the rate of decline began to slow in March We note that it is common to reach the conclusion that this indicates an improvement in conditions. In reality, the new boat market S al e s 40% 30% 20% 10% 0% T -10% re n -20% d -30% -40% -50% NEW POWERBOAT SALES TREND AND INVENTORY DAYS continues to contract, which is still the case today. In order to document truly improving conditions, the bellwether line would have to move above 0 percent on the left-hand axis, indicating that positive unit growth is occurring. Looking behind the numbers, the slowing rate of decline experienced in 2009 likely received an artificial stimulus due to a significant amount of repossessed and distressed inventory moving through the market at significant discounts. Thus far in 2010, inventory days remains elevated (390 days) indicating that the industry is still digesting excess field inventory. From the supply side of the equation, we briefly reviewed the NMMA MSR Report (Manufacturer Shipment Reports cataloging monthly wholesale industry shipments). Based on data from January through April 2010, compared to same period in 2009, wholesale shipments have increased New Powerboat Sales Trend and Inventory Days Rolling 3 month average UNIT SALES Y/Y % Change AVG. DAYS IN INVENTORY Jan-05 Mar-05 May-05 Jul-05 Sep-05 Nov-05 Jan-06 Mar-06 May-06 Jul-06 Sep-06 Nov-06 Jan-07 Mar-07 May-07 Jul-07 Sep-07 Nov-07 Jan-08 Mar-08 May-08 Jul-08 Sep-08 Nov-08 Jan-09 Mar-09 May-09 Jul-09 Sep-09 Nov-09 Jan-10 Mar-10 May by approximately 32 percent. This would indicate an expectation for improved retail conditions for the 2010 selling season. It is possible that 2010 shipments contain a higher level of pre-sold units. However, based on market data through May 2010, the unit sales picture, as well as the continued elevation of the age of units sold, appears to be in conflict with the production increase. Time will tell, as we are just beginning to enter the peak selling season, and we will be watching these metrics closely to determine whether that is the case. Based on data through the end of May 2010, conditions in the new boat market are still weak, older field inventory continues to be an issue and the supply of new units into the distribution pipeline has been increased. With the economic scenario in the US characterized as fragile at best, discipline with respect to field inventory will be critical in order to avoid swamping the boat. I n v e n t o r y D ay s 6 Boating Industry - MARKET DATA BOOK

25 Home price recovery bodes well for boating By John L. Hughes, Marine Metrix HOME PRICES ANNUAL RATE OF CHANGE The home price bubble and the following bust were the catalysts that drove a series of events bringing the world economy to near collapse. The good news is that while home prices are a long way from their 2007 peak, they have turned around and are growing nationally on an annualized basis. As you would expect, boat market volume has followed home price trends. It makes sense; prospective boat owners are far more likely to make a large discretionary purchase like a boat if they are feeling good about a strong equity position in their home. For most folks, their home is their biggest asset. The link between home prices and new boat sales has been amazingly consistent. This article will examine that connection; forecast how it is likely to affect the boat market in the near term; and point to cities that are leading and lagging in terms of home price trends. The Case-Shiller Index The Case-Shiller Home Price Index (from Standard & Poors) is the most widely tracked indicator of home price trends. It measures changes in sale prices of existing homes. The S&P website reports home price trends for 20 major US cities as well as two consolidated trends for 10 and 20 cities. The easiest way to understand the history of the home price bubble and bust is to track the trend of annual rate of change in value. That is shown in the graphic at the top of this page. The chart clearly shows the excesses of the home price bubble with seven cities hitting peak annual growth rates of over 25 percent. Las Vegas and Phoenix topped all, each with a peak annual growth in the 50- percent range. The corrective downturn began in January By January 2007, the two multi-city composite indices crossed from home price appreciation 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0% -50.0% Above, home prices for 20 major American cities and as two consolidated trends for 10 and 20 cities based on Case-Shiller Home Price Index data thru March Right, home prices and boat sales. into decline. Market forces began to take action to scrub off the inflated valuations of the bubble. It s interesting to note that it took two years for the multi-city composite rates of home price decline to go from 0 percent to a maximum rate of decline of almost 20 percent. In contrast, the recovery that started in January 2008 only took a year to get back to annualized home price growth. The likely cause: Home buyers were tough to find during the downslide in home values, while buyer activity picked up as price trends started to improve. Buyer inaction results in a slowly shifting market. An increased volume of bargain hunting buyers moves the market much more quickly. The other force on the home market has been government incentives to home buyers that just ended in April. Home market price data lags by two months. The most recent Case-Shiller data as this article is being written is through the end of March. It is likely that the current 2 per- 1/1/04 4/1/04 7/1/04 10/1/04 1/1/05 4/1/05 7/1/05 10/1/05 1/1/06 4/1/06 7/1/06 10/1/06 1/1/07 4/1/07 7/1/07 10/1/07 1/1/08 4/1/08 7/1/08 10/1/08 1/1/09 4/1/09 7/1/09 10/1/09 1/1/10 AZ-Phoenix CA-Los Angeles CA-San Diego CA-San Francisco CO-Denver DC-Washington FL-Miami FL-Tampa GA-Atlanta IL-Chicago MA-Boston MI-Detroit MN-Minneapolis NC-Charlotte NV-Las Vegas NY-New York OH-Cleveland OR-Portland TX-Dallas WA-Seattle Composite-10 Composite-20 BOAT MARKET HOME PRICE CORRELATION Home Prices Annual Rate of Change Based on Case- Shiller Home Price Index - Data Thru March 2010 AZ-Phoenix CA-Los Angeles CA-San Diego CA-San Francisco CO-Denver DC-Washington FL-Miami FL-Tampa GA-Atlanta IL-Chicago MA-Boston MI-Detroit MN-Minneapolis NC-Charlotte NV-Las Vegas NY-New York OH-Cleveland OR-Portland TX-Dallas WA-Seattle Composite-10 Composite-20 8 Boating Industry - MARKET DATA BOOK