Boating Industry Canada October 2015 - (Page 4)

INSIGHT BY ANDY ADAMS your Industry at the End of 2015 THE SUMMER of 2015 is now officially over. The first day of Fall was September 23 and we can now look back at the last four months or so with clarity. In Ontario, it really was a pretty nice summer weather wise and many other parts of Canada also enjoyed sunny warm days, but it was too warm in some cases. Life is rarely perfect. Although as a final salute, the Fall in Ontario is perfect right now - sunny, 21 celsius and as I look out on the lake...there are no boats on the horizon. I believe this is because too many of us have to work for a living; a cruel situation I know. Some days, perfection eludes us. That reminds me of my investment portfolio performance through 2015...the word cruel that is. Maybe problems in China, or global uncertainty, tanking oil prices or currency woes are behind that sad performance. No matter. It was not the wildly positive investment environment that would have driven big sales increases in the boat business. We like "positive". We are all about good times and good friends. See John Morris' Ad Nauseam column in this issue on page 18. Cheers! Is the glass still half full? So what happened in sales for the boat business? Well, here is some perspective from NMMA Canada. Following weak sales in the first quarter (down 8% YOY), the pace of decline has decreased (down 2.1% YOY in Q2 and down 1.4% YOY for the first 2 months of Q3) While new boat sales in Canada have been trending downward for the past 2 years, the pace of decline seems to be moderating. Data through August indicates sales are down 2.5% in 2015 YTD, suggesting we may be on the road to recovery; however, since GDP has been contracting for the past 2 consecutive quarters, we will need to continue monitoring its impact on boat sales. The strength of the US dollar is impacting sales of US product. Reflecting a shift in new boat designs and consumer preferences though, wholesale shipments of outboard engines in Canada were up 10.9% YOY for the 12 months through August. Corresponding dollars were up 14.3%. Warranty card registrations were up 1.4% (R12M YOY) in August. Ok...not a disaster but not a great year either according to NMMA data. Luckily, we have a good relationship with GE CDF and the latest Canadian sales data appears on page 12 in the GE Spotlight report. The GE data is drawn from slightly different sources and the YOY 2015 volume change data to August was down 6%. On a regional basis, BC was the place to be while Ontario was soft and Quebec was softer. A key measure from GE was "aged inventory over a year old" and at 18% that is at the high end of what their decades of experience say is healthy. We, as an industry, need to balance that off which means selling off non-current inventory as well as being cautious about ordering new inventory. Overall, you could say the business is soft right now and these numbers are across the broad spectrum of the industry. That means there are still winners, but there are probably others who are performing below industry norms. It's a challenging business environment for new product sales, but I want to make a point. New boat sales are important and valuable, but they are not the only source of revenue. Service and accessory sales are also important revenue generators and that is where the industry can keep the game going. I believe this is particularly true because typically, boat owners enjoy up-scale incomes and lifestyles. While the average person may be suffering, (or seeing their investments drop significantly) those whose portfolio attracts better quality investment advice, may be doing quite well. They will still expect to have summer vacations and can probably well afford to maintain their boat (or boats). So, anticipating that the market will continue at this sort of pace, ramp up your efforts to sell service. This is the year to prospect for sales of new tops and canvas, upholstery repairs, engine and drive rebuilds and even winter paint jobs. Among the boating public, I believe the money is still there. It may just be harder to get. Andy Adams - Editor To read the digital version of Boating Industry Canada anytime visit and click on Digital Magazine in the menu bar. 4 Boating Industry Canada OCTOBER 2015

Table of Contents for the Digital Edition of Boating Industry Canada October 2015

Industry News
GE SpotlIght
PRODUCT FOCUS – IBEX SHOW 2015: IBEX 2015 was a treasure trove of new products and Boating Industry Canada brings you the show coverage plus a number of video interviews. – by Andy Adams
Ad Nauseam
IMPACT - MARK BRUCKMANN: A long overdue profile on Bruckmann Yachts, at the heart of Canadian boatbuilding since the dawn of fiberglass. – by Andy Adams
MADE IN CANADA – MARSKEEL: For Mars Metal of Burlington Ontario, it’s what’s on the bottom that counts and their MarsKeel diviosion has established itself as a global leader in lead ballast keels – by Glen Cairns
MADE IN CANADA – VOYAGER: Voyager Self Steering Inc. was founded by Peter Teitz, a Canadian sailor and retired machinist/patternmaker living in Kitchener, Ontario. – by Glen Cairns

Boating Industry Canada October 2015