Boating industry hoping recent sales increases a sign of a rebound

After years of steadily declining sales for new boats, Minnesota's boating industry is hoping a slowly improving economy will help sales rebound this year.

Sales of new boats, outboard engines, trailers and accessories have fallen for at least five consecutive years in Minnesota. Last year's Minnesota sales of about $300 million were about 45 percent less than they were in 2005. That drop is in line with the national sales decline over that period.

But some Minnesota dealers and manufactures say business seems to be turning around this year.

"This year has been incredible," said Matt Ness, general manager of the Crystal Pierz Marine store in Shakopee. "As of the end of last month, we were almost exactly double the sales of the year before. So, it's a nice change."

Ness said the used boat market has been pretty strong, but said he was budgeted to be up about 40 percent on new boat sales. He said his biggest challenge now is getting them in stock.

"They can't seem to make them fast enough for us. So, that helps our used business," he said.

So far, Ness said he's been mostly selling fishing boats. New 17- or 18-foot fishing boats with outboard motors are going for about $17,000 to $20,000. But as the weather warms, he expects ski and pontoon boats sales are going to pick up.

"It seems like the people who have money are feeling more secure again," he said. "People are either coming in with cash or the people who are financing are in better credit positions. The last few years that has been a challenge."

Some dealers say things started improving last year, after a string of bad boating seasons.

Denise Halberg Tetrault, sales manager at Halberg Marine in Wyoming, said they will end up better than last year.

"And we were very pleased with last year," Halberg Tetrault said.

Halberg Tetrault said pontoons and runabouts have been selling well, and aluminum fishing boat sales have picked up in the last few weeks. But she said competition is intense among boating retailers, keeping prices and profit margins down.

"You're not allowed to make very much money," she said. "That's why 30 percent of the dealers are gone, because the margins weren't there to have them be profitable."

But she said dealers that remain are seeing customers more ready to spend.

Mike Menne, director of marketing at Premier Marine in Wyoming, would agree. He said sales of his firm's luxury pontoon boats are up 30 to 50 percent. "A lot of our boats have been selling for between the $50,000 and $70,000 mark this year," Menne said. "It's been very refreshing and it's nice to see."

Meene said his company recently sold a 310 square-foot pontoon that retailed for $155,000. He expects Premier will sell about 2,000 upscale pontoons this year.

SIGNS OF IMPROVEMENT

The National Marine Manufacturers Association says there were signs this past winter that the boating business was on the rise.

At boat shows around the country, the association saw increased attendance at 70 percent of its exhibitions, an indicator that buyers were returning. And boat show exhibitors reported improved sales and more attendees looking to make a purchase.

"All the indicators are that the industry is starting to come back," said David Dickerson, the marine association's director of state government affairs. "We are seeing better sales [and] seeing stabilization among those businesses that manufacture and sell boats."

Last year, Minnesota boat registrations increased about a quarter of a percent to about 814,000 from 2009. That count includes new and used boats and everything from jet skis to yachts.

Kim Elverum of the state's Department of Natural Resources said the state's boating industry seems to be on the mend.

"It's going to depend on the climate as far the economy goes, whether this year will be different than the year before," Elverum said.

The biggest increase in Minnesota boat registrations last year was for low-cost watercraft for the fitness minded, such as kayaks. Registrations for them jumped 13 percent to about 45,000.

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