I have preached this sermon for many years in my columns. I have been pleased to see that several boat builders have announced their intentions to introduce 2011 models this fall instead of during the summer. What triggered me to write about this subject again was an article in one of the trade magazines recent enews where the author stated that, “To be fair, you should know that boat manufacturers started introducing new boats in the middle of summer at the request of the dealers.” Huh? He must have heard this from some boat manufacturers! He sure didn’t hear this from any of the countless dealers I have talked to over the years about summer new model intros. They have opposed it from the git-go.
I have been involved in sales and marketing in the boating industry for over 50 years and during that time have called on and worked with hundreds and hundreds of dealers. For many years in my career, new boat and motor models were introduced at the New York Boat show in January…then years later at the big fall trade show called IMTEC. Why then did summer new model introductions start?
IMTEC was a fantastic show for years. Dealers could come to the show, learn about their boat and engine manufacturers’ new products, attend some dealer meetings before, during or after the show, check out what competitive brands were offering and interface with other dealers. So what happened? In my opinion, some boat builders started having late summer dealer meetings in hopes of getting dealers to order their brands of boats and getting as much of the dealers’ floor plans as possible, ahead of their competitive boat builders. Then, over the next few years, the race began to have dealer meetings ahead of the next guy until some were even held in late June and July.
So for years, there was the issue of a dealer selling a boat at a winter show for spring or early summer delivery and when the customer came in to get the rig, he saw a newer model in the dealer’s showroom. The customer was then unhappy as he realized he had bought what was now a non-current boat.
Which came first…the chicken or the egg??
Builders complained that they had to intro their next year models in the summer because dealers wouldn’t order what had been current models. But dealers have told me they started holding back on ordering boats in the summer because they knew their builders would soon be shipping new models, which would make the current boats in their inventory become non-current.
And there is the question I have asked boat builders, which none have wanted to answer. My question always is, “What would you rather have your dealers doing during the summer selling season…selling your boats or attending a series of boat builder dealer meetings?” The summer dealer meetings and new product introductions have just never made sense to me.
Ed Lofgren, Chairman of the MRAA and owner of 3A Marine Service, Hingham, MA had this to say on the subject. “From this dealer’s perspective, I would like to see a September intro for new product. I guess I was spoiled by the old IMTEC Show, which I have always held as the model. Buying boats and motors in the early fall gave me the ability to sell off the prior year product in the spring and summer and look forward to September/October arrival of the new models. It was kind of a natural order of things. We have an October show in Boston, and introducing new models and fresh stock is the way to go, even in 2010. People then place orders for spring, especially for the larger boats. It would seem to me that a September industry wide model year change would benefit manufacturers, too, by stretching out the build time for boats in particular. Add to those factors that a lot of dealers have a July 31st year-end, and it behooves a dealer to have low inventory at that point for insurance and tax purposes. To make a long story short, this dealer votes for a September intro for our industry.
John Underwood, former owner of Top 100 Lockwood Marine and previous chairman of the MRAA had this to say about summer product intros: “I have personally heard manufacturers extol the virtue of getting to the floorplan money first. Both timing justifications make some sense in imperfect business environments. Hopefully, we are all better educated now. I think dealers will want time to get their inventories much nearer minimums before taking on new product in the near term future – until prosperity dulls good business sense yet again.”
I also asked Phil Keeter, President of the MRAA, what he thought about it. Phil said, “I weigh in on this issue for a Sept introduction and always have–even when I was a dealer. New product introduced in the summer makes a dealer’s current inventory a year old automatically. Inventory has to be discounted to sell—and there goes the dealer’s margins right at the height of the selling season. Doesn’t make sense at all except for the manufacturer—he gets to ship more product. The last three years have seen a buildup of inventory, and manufacturers need to let dealers move that inventory before asking them to take more!!!! Doesn’t take an MBA or a Doctorate to figure that out.”
I think this industry would be well served to go back to the annual trade show (IMTEC) and new product introductions in late September or early October. It worked well before. It can work well again. Then we could bring to an end the rush by some boat builders to hold summer dealer meetings to get their dealers’ floor plans loaded before their competitive builders get to them.