Boat sales expected to hit highest level in 5 years

Published online: Feb 20, 2012 News Steve Adams The Patriot Ledger
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This year's exhibit space is 40 percent larger than last year's, and the turnout from dealers and manufacturers is the strongest since 2008, said Joe O'Neal, the show's manager.

Entry-level models, such as pocket cruiser sailboats and mini-trailers, are considered two of the strongest categories, O'Neal said. So are pontoon boats, which are primarily designed for freshwater use.

"In general, almost everybody is seeing an uptick," O'Neal said.

Dealers are displaying 750 vessels from 150 manufacturers, with power boats accounting for about 80 percent of the inventory.

Area boat dealers say they expect a rebound in sales in 2012, part of a gradual recovery that picked up speed last year.

Sales rose 23 percent in 2011 from 2010 at Russo Marine in Medford, CEO Larry Russo said, with most of the growth coming from sales of boats 35 feet and up. Business accelerated in the last three months with nine new boat sales, triple the amount of activity the previous year.

"Those buyers are high-end, high-net-worth individuals and they're not dependent on conventional financing," Russo said. "They've been sitting on the sidelines during the downturn and they can afford their luxuries."

Russo has 52 boats from five manufacturers on display, after obtaining rights to sell Bayliner boats last year when dealers in central Massachusetts and Rhode Island went out of business.

In 2008 and 2009, many dealers survived on used-boat sales, which accounted for up to two-thirds of sales, Russo said, and many repossessed boats flooded the marketplace.

"Those have flushed themselves through the system and we're seeing the migration back to new-boat sales," Russo said, estimating new boats now account for 55 percent of business.

Boat dealers also are seeing more business in so-called re-powering jobs - installing new engines whose energy efficiency is up to 50 percent greater than older models. 3A Marine in Hingham has done more than a dozen installations since the start of the year. A 150-horsepower engine costs about $14,000 to install.

"It's a big part of revitalizing the older boats and bringing them up to the current emission standards," said Jack White, sales manager at 3A Marine Service in Hingham. "They're also a lot quieter."

3A Marine has seen an increase in fishing and pleasure boats this year as well.

"Even though everybody has been negatively affected with the economy, I think a lot of people have just decided we're going to live and continue on with their recreation," White said.

Boat sales plummeted 55 percent between 2006 and 2010, according to the Chicago-based National Marine Manufacturers Association. During the same period, used-boat sales declined 7 percent.

The industry's fortunes are closely tied to consumer confidence, which has been improving nationwide and locally.

"When they're feeling good about their job today, they're more likely to make an investment," said Thom Dammrich, president of the manufacturers association.

The group predicts nationwide 2012 sales of new boats and engines at $7.5 billion, up 6 percent from 2011.

Financing options have improved for consumers, said Tom Smith, president of Sterling Associates, a Northbridge financial services company. More local credit unions are offering boat loans, prompting national lenders to lower their rates to compete, Smith said. Average interest rates are just under 5 percent.

"The consumer is in a lot better shape," Smith said. "He has more choices. There are more lenders that have come into the market."

Steve Adams may be reached at sadams@ledger.com.

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