Marine Market Insights: Boat Shows, Outboards & the Inventory Race

• Lenny Sims, VP Business Development/Strategy – Specialty Vehicles for J.D. Power and the MRAA Discuss Insights on the 2023 Q1 Marine Market

By Drew Mick, MRAA Data Specialist

Headshot image of MRAA Data Specialist Drew Mick in a collared blue shirt at Top Golf
Drew Mick

Mick: Last time we spoke, you emphasized how 2022 was showing signs of “a return to the norm.” With what we are seeing in Q1 2023, in your opinion, is that trend continuing?

Sims: I think it’s continuing. One of the things we saw when we talked last time was what I called a “return to the seasonality of things” on the marketplace. This had not taken place in 2019, 2020 or 2021 for the most part. It had that continuous climb. It was affected by seasonality through the rest of 2022, and we’re seeing that seasonality kind of return.

This means the values are doing a slight flattening or climbing due to the spring and the selling season. This is also inclusive of the boat shows. The evaluations are down not as much as some folks would expect, but they also must look back at 2021 and somewhat 2022, that the inflation dollar is also somewhat holding values. All that said, there’s this mixture. It’s all just a big pot of soup that has a lot of influences in it. Some counter act others and some enhance other market moves, but at the end of the day, it is doing trend lines like pre-COVID-19 conditions.

Throughout Q1, MRAA had a theory that the higher trend we were seeing in certain items had to do with a better than anticipated boat show season. Is there anything in your market insights report that lends credence to our theory? Does it go against our theory?

If there’s anything to read here about the boat show season, it is the seasonality. To dissect it a little further, in previous years a harsh winter has generated a huge attendance at boat shows. That was simply nothing more than people wanting to get out of the house because they had that cabin fever so to speak. They’re thinking “Hey you know what, it’s above 25 degrees this weekend and there’s a boat show going on in town. Let go!” and that correlated to increased attendance. Then the next tier down, there are the people saying, “Compared to last year, we had a lot more leads this year.” Show was up for them. That’s good. You’re gathering consumer information, and you can continue marketing to those people and reach out.

However, at the end of the day, for us it is: how many more sales did you have because of the boat show? You could have less attendance at a boat show, but it is more serious buyers. You sell more boats. When I went to the Houston boat show this year, I put myself in the consumer role there. My perspective, being what it is, is I know there are a lot more boats in inventory. I know the dealers are going to be a lot more susceptible to realistic pricing and doing a little more work to sell that.

I am explaining that because I know a lot of this year attendees (consumers) who went in the last two years, and they couldn’t afford the numbers that were being asked. There was an inventory shortage at the time. I think this year, a lot of folks went with a very positive attitude because the assumption was, after driving by a lot of these lots, they see a lot of boats available than there were a year ago. I think that led to a lot of excitement about going to the show this year to see if pricing had changed any. Availability seems to be more prominent than previously. Whether that occurred and is reflected in the sales, is another thing.

The 2024 model year begins around June. When will we see that reflected in these reports? What do you anticipate happening with that, especially in the “Top researched by year” section?

In the market insights report, the top researched model years by category, you’ll see that the percentage of research by year climb up to about 2021, slightly declined in 2022, and then drops off in 2023. When we say researched, it is researched collectively a few groups: by consumers that come to research used boats on our site, by dealers who are looking up trade-ins, by lenders who are looking at the value to come up with an actual cash value and provide a loan to a dealer, and it is also showing usage and research of traffic by insurance companies. There are other smaller segments, but those are the key ones. What we end up with in our report is a representation of essentially the peak age of used boats being researched is 3 years.

The 2021 boats are the most researched boats for a few reasons. First, if someone bought a 2021 boat new, they aren’t thinking of trading it in for the first year or two. When it gets to be 3 years old, some people are tired of it and want a different one. So that particular peak from two years ago is not unusual at all.

To answer your question about the 2024 models, let’s look at 2023. Why is the 2023 year so low? It’s so low because lenders don’t need to use our products for values. For brand new boats they use relationships directly with the dealers they have consumer financing relationships with. Dealers are not looking at 2023 year boats because they have the invoice and the build sheet directly from the manufacturer. Used 2023 values just became available March 1, and that is how it is every year for the new model year. So for 2024, March is when we see those used 2024 models show up here. Before that point, they don’t need us for that.

While nothing seems to be performing as well as 2022, outboard boats are a general stand out (average retails value by category, traffic and views). Is there anything to that other than it just being the popular type?

When you look at outboard motors in the “Views in 2023” section, 44 percent of it is outboard motors. Almost half of the marketplace. Outboards are an interesting category. Will these numbers change a lot because we pull some things out of that category? Possibly, but I would not say a lot. Pontoons, for instance, can be outboards, but we have them as their own category. The outboard category is speed boats of various types, but a huge part of outboards is bass boats. Bass boats is an interesting market. People who are bass fishers, they don’t ebb and flow. They fish and that is year-round. That is what drives and holds up the values of that category. They are solid as a rock and do not fluctuate a whole lot.

Is there anything else in this report, like what’s on the horizon, that you want to highlight?

For my team and me, it is still wait and see. Some of the things that we anticipated are happening. There are other things we anticipate coming that we are watching out for. I hesitate to state that only because it is an opinion or a little less than a projection. It has a lot to do with the inventory levels. Dealers are full of product, and it can be a dangerous position for them. It’s like a game of musical chairs. They don’t want to get stuck when the music stops and not have a seat.

The issues that they are going to have to be concerned about will possibly come from a decision they have already made. It comes from how many 2024 models they took on. Some were conservative with what they took on, some aren’t in a position and the manufacturers give them their allotment of what they are taking. Some have leftovers. It’s a race now. If you’re a dealer and your shipment of 2024 models is coming in July 1, you basically have the time until then to get rid of as much of it as possible. It’s floorspace that may already be taken with 2023 or other models. So dependent on how much discounting goes on, and how much pressure dealers feel to start jettisoning some of their older inventory, that’s going to drive the values down. In some cases, when you drive the 2023 models values down, and the 2024 models come in with this elevated MSRP, consumers might say, “I will just buy the 2023 then, with the way the price has been cut down. Why get the 2024? I’ll take a 2023.”

That’s where they must start balancing things. They can start squishing their retail numbers on the new models if they’re not careful. That’s a discussion I have with dealers that I know. Some don’t want to hear it; others say it makes sense and they have to be careful.

Cover of J.D. Power Q1 2023 Marine Market Insights showing blue and green bar graph


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