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Brunswick selling SeaRay

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Interesting read. What strikes me is that the number their units sold has gone from 28000 in 1986 down to only 2500 in 2016. A very significant drop, going from a giant in the industry to just another boat maker. Makes me wonder if their Bayliner brand will be next.

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In 2016, fewer than 2,500 Sea Rays were sold in the U.S., according to a reliable industry source. During a conference call after the announcement yesterday, a Brunswick spokesperson said that projected 2017 Sea Ray sales are $380,000 and that volume in terms of units was flat. Further, it was said that Sea Ray had been operating at a loss.

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27 minutes ago, RoyR said:

In 2016, fewer than 2,500 Sea Rays were sold in the U.S., according to a reliable industry source. During a conference call after the announcement yesterday, a Brunswick spokesperson said that projected 2017 Sea Ray sales are $380,000 and that volume in terms of units was flat. Further, it was said that Sea Ray had been operating at a loss.

That doesn't add up.  I re read that statement several times in the article.  If sales are that bad then what is there to sell?

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Maybe $380,000 was really supposed to be $380 Million?  If so, that's an average sell price of $152,000.  Reasonable.  But if true, that's not a bad business is it?

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10 minutes ago, TexasPilot71 said:

Maybe $380,000 was really supposed to be $380 Million?  If so, that's an average sell price of $152,000.  Reasonable.  But if true, that's not a bad business is it?

It is actually about $351MM according to D&B financial report.   It would be interesting to see the portfolio of sales. That is an average of $125k per boat.  But I am guessing, if our marina that sells Sea Ray is an indicator, that the smaller cheaper boats sell more.  They have had a 400 Sundancer on the floor for over two seasons.  The SPXs and SLXs seem to move more.  Those start at $50k and SLXs can go up to close to $200k for larger well optioned.  In Brunswicks last annual report, they seem to indicate that Sea Ray was one of their core brands.  :huh:

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2 minutes ago, Roady68 said:

It is actually about $351MM according to D&B financial report.   It would be interesting to see the portfolio of sales. That is an average of $125k per boat.  But I am guessing, if our marina that sells Sea Ray is an indicator, that the smaller cheaper boats sell more.  They have had a 400 Sundancer on the floor for over two seasons.  The SPXs and SLXs seem to move more.  Those start at $50k and SLXs can go up to close to $200k for larger well optioned.  In Brunswicks last annual report, they seem to indicate that Sea Ray was one of their core brands.  :huh:

Probably doesn't take many 50 footers to bring that average up, though.  Good sleuthing! 

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18 minutes ago, TexasPilot71 said:

Probably doesn't take many 50 footers to bring that average up, though.  Good sleuthing! 

I agree.  I really like the 350 Coupe, so I am always looking for them to see what the pricing is.  My guess is they made about 30 of them in 2017.  And probably didn't sell too many.  I think I may have seen one or two sold on Marine Max. Not a good indicator of the whole product line, but only barometer I can find.  So figure a handful of $400k boats, with a lot of $40k to $80k boats on the other end.  The 30' and 40' SLXs are pricey too, I did see one new one in the water at our marina, so probably a handful of those too.  Only one equation and too many unknowns to calculate.  As an engineer and new business development person, I would live to see break downs of fixed and variable costs, product slate, balance sheet, etc.  I should give the annual report for Marine Products (Chaparral and Robalo parent) to see if they break down the production.  I haven't read the third quarter earnings report yet on them either.

If the boat shows are any indicators though, I would think the market is really hot on pontoon boats.  About 40% of floor space was dedicated to those at the last boat show I was at.  Another third on wake/ski boats.  I think cruisers could be counted on one hand.  Maybe two hands.  Fishing boats had the rest.  Sea Ray's offering the SLX with the drop down side panel is attempting to capture pontoon boat use and still provide water sports activities.  They are newer though, so market may not have caught up to see those offerings. And the Sundancer 320 is like a deck boat I guess, I may not be up on terminology.  Basically a large bow rider with a functional head, galley and berths below.  And comes with outboards.  Chaparral's product seem a bit dated compared to that.  though that may not be a bad thing if the concept doesn't catch on.

I am not sure what the advantage of the outboards are though.  Yes, easy to winterize, but some of these outboards are pretty large and heavy.  So not practical to just put it the back of the truck and store in the garage.  And you still have the on board water systems to deal with.   Could be just a perception that customers will have that they are less maintenance. Should keep marinas in business still.  Provided new boats sell.

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With this, Chaparral was in front of the  curve. The way they stopped making larger boats a few years back. Then went big time into smaller boats, OB's, wakeboards and jets.

 

 

.

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It's pretty simple, they keep building bigger and more expensive boats that no one can afford.

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21 minutes ago, drewm3i said:

It's pretty simple, they keep building bigger and more expensive boats that no one can afford.

Nah...there's always money out there.  I have a half Billion dollars worth of jets here and they are always looking to upgrade!  :)

 

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30 minutes ago, drewm3i said:

It's pretty simple, they keep building bigger and more expensive boats that no one can afford.

Agreed and I have said it for years.  price of boats is through the roof, although there is always money, the amount of money in different hands doesn't change which means the demand for boats keeps going down.  The people willing to spend 60-100k on boats just aren't out there.  Cars and trucks are next IMO.

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But having money and being willing to spend it is an entirely different story. The cost of new boats is why we bought used. 

Yes the new stuff is great but when a decent used boat can be had for a fraction of the cost it becomes a no-brainer

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15 minutes ago, Auggie said:

But having money and being willing to spend it is an entirely different story. The cost of new boats is why we bought used. 

Yes the new stuff is great but when a decent used boat can be had for a fraction of the cost it becomes a no-brainer

reality is assuming its in good shape and of an equal model and type a 15k boat is doing the same thing as a 60k boat it just is, boats aren't like cars.  Not going through the used vs new debate.  The market is what it is , and its because people don't want to spend the money on new.

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33 minutes ago, soldier4402 said:

reality is assuming its in good shape and of an equal model and type a 15k boat is doing the same thing as a 60k boat it just is, boats aren't like cars.  Not going through the used vs new debate.  The market is what it is , and its because people don't want to spend the money on new.

Especially when you consider for a lot of people boating is a few months of the year opportunity. Unless you live on an island a boat is not a necessity as an automobile would be. It`s just hard for the majority of Americans to justify spending 100K on a boat.

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How much would it cost to replace a 2002 186 SSI  with a 5.0L V 8 220 hp & every option it had with a trailer. Delivered on May 10, 2002.

What is the current cost to replace one ?    I never buy used. But for my 2nd 2002 Chaparral 186 SSI with the same V 8 engine. I did.  Have no idea what would /could be a replacement & or at what cost.

Curious   :)

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3 minutes ago, cyclops2 said:

How much would it cost to replace a 2002 186 SSI  with a 5.0L V 8 220 hp & every option it had with a trailer. Delivered on May 10, 2002.

What is the current cost to replace one ?    I never buy used. But for my 2nd 2002 Chaparral 186 SSI with the same V 8 engine. I did.  Have no idea what would /could be a replacement & or at what cost.

Curious   :)

Was thinking the same thing so I looked.....30k deer minimum to replace my fully functional 1992 1900 SLC.   I paid 1/10 of that for it 5 years ago from a family member.

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I looked at the 191 with a 150 hp OB & most options.  My with no real stern platform is a effective equal in length & width . Weight wise. 300# difference. All the different canvasses of a 2002 are not available. Seating layouts are miles apart. No side saddle seats on the 2002.  8 + 200 pound seniors sit extremely well in the all front facing bench & bolsters. 72 " seniors sit with feet stretched out in bow seats with backs against front of padded walk thru wall.

Daughter & son in law like bow seats or stretching out on full width rear bench seat or full width padded engine cover hatch

2019  191 FOB cost is about $ 36,000  for the 150 hp.............. $ 23,000 for the 2002  220 hp V 8 delivered. 

My 186 SSI s  are like a great mistress. 

 

 

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I read a few months ago that 'very high end' and 'very low end' new boats were selling well, with middle market boat sales not good in the US market. This trend was putting big pressure on the used boat market with significant depreciation lowering prices significantly across the board - the 50% depreciation number mentioned earler in this thread is very real after just a few years and goes to 75% quickly. The good news is there are some great deals nationwide on very nice used boats.

The bad news is that MANY boats sold at the boat show are sold with 15-20 year financing terms and no money down! So a $100k boat purchased 3 years ago now carries a balance still of $95k with payments monthly of of $965! And the boat is resell-able today for $50k-$70k. Ouch. And this will only get worse by year 5 of ownership.

 

I was talking with the editor of Yachting magazine. He was saying the marine industry thinks they are going to have a problem going forward with customers. The millennial generation wants to experience everything but not own anything. They are wondering how to cater to that mentality.

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8 minutes ago, Phillbo said:

I read a few months ago that 'very high end' and 'very low end' new boats were selling well, with middle market boat sales not good in the US market. This trend was putting big pressure on the used boat market with significant depreciation lowering prices significantly across the board - the 50% depreciation number mentioned earler in this thread is very real after just a few years and goes to 75% quickly. The good news is there are some great deals nationwide on very nice used boats.

The bad news is that MANY boats sold at the boat show are sold with 15-20 year financing terms and no money down! So a $100k boat purchased 3 years ago now carries a balance still of $95k with payments monthly of of $965! And the boat is resell-able today for $50k-$70k. Ouch. And this will only get worse by year 5 of ownership.

 

I was talking with the editor of Yachting magazine. He was saying the marine industry thinks they are going to have a problem going forward with customers. The millennial generation wants to experience everything but not own anything. They are wondering how to cater to that mentality.

Another reminder why i buy used and definately don't finance toys.

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11 hours ago, Phillbo said:

I read a few months ago that 'very high end' and 'very low end' new boats were selling well, with middle market boat sales not good in the US market. This trend was putting big pressure on the used boat market with significant depreciation lowering prices significantly across the board - the 50% depreciation number mentioned earler in this thread is very real after just a few years and goes to 75% quickly. The good news is there are some great deals nationwide on very nice used boats.

The bad news is that MANY boats sold at the boat show are sold with 15-20 year financing terms and no money down! So a $100k boat purchased 3 years ago now carries a balance still of $95k with payments monthly of of $965! And the boat is resell-able today for $50k-$70k. Ouch. And this will only get worse by year 5 of ownership.

 

I was talking with the editor of Yachting magazine. He was saying the marine industry thinks they are going to have a problem going forward with customers. The millennial generation wants to experience everything but not own anything. They are wondering how to cater to that mentality.

When we were looking for our boat I surveyed dozens of sites including boat trader, iboats, yacht world, ebay, craigslist, etc.  I collected asking prices for every 28' to 31' Signature I could find that was model year 1990 and newer.  I plotted the curve to get an idea of range of prices.  It helped me determine if an asking price on a boat I was interested was a good price or not.  I did a curve fit for a 3th order polynomial (exponential and power didn't handle the steep depreciation on newer boats).  It looks like boats loose about 15% in the first year, and another 15% or so in the second.  By year 5, you are at 50%.  The knee of the curve is around 10 years.  From that point on, the value drops much slower, leveling out about 10% at year 20.  I did a similar search for Sea Rays and found about the same.  There is a decent amount of scatter (probably due to options and condition).  There is also a fewer points in for 2008 to 2010 model year boats (recession most likely).  And there are some steps in the data most likely due to model year changes.  But overall a pretty good estimate.  Cars have a more linear depreciation in the early years.  So its harder to upside down on the loan.  The amortization of a boat loan probably shows the value of the boat exceeding loan balance around year 17.  So a 20 year loan isn't necessarily a risk for lender.  The issue is the steep depreciation in years 1 through 5 that are where you will be way upside down on a loan.  But if income is steady and payment easy to make AND interest rates are low, borrowing money may not be the worse thing.  

Millennials are not at a point in their careers where they can afford a toy like a new boat.  And probably don't have credit history or income to get low rates if they wanted to borrow.  I have seen a stronger marketing campaign locally for boat rentals and boat clubs.    Maybe boat makers need to look into partnering or supporting boat clubs?  Don't know.

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13 hours ago, Phillbo said:



The bad news is that MANY boats sold at the boat show are sold with 15-20 year financing terms and no money down! So a $100k boat purchased 3 years ago now carries a balance still of $95k with payments monthly of of $965! And the boat is resell-able today for $50k-$70k. Ouch. And this will only get worse by year 5 of ownership.

 

 

Sad part is those 15 year loans on 100k also carry 50k of interest if not more, people don't think about that. Sad part is a lot of people doing this and shouldn't some even on here.  Its already happening but I think the market will correct to 30-40k boats and boats for the 1% type with the middle boats being carried by only a few manufactures.

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14 minutes ago, Phillbo said:

A boat is a toy and should never be financed. 

wouldn't go that far.  But I wouldn't be doing it for 15-20 year terms

 

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2 hours ago, Phillbo said:

A boat is a toy and should never be financed. 

Looks like you are on the way to retire comfortably if not early and comfortably ... I like your thinking.

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