Dealer Outlook

Trade Only Dealer Outlook Blog

Deficit mentality is holding our customers back!

Boat sales appear to have gotten a boost from the winter boat shows. Good news, for sure. But, you gotta be in a coma not see why our unit sales still arenít even close to what they should be.†Is it no customers? No, theyíre out there. Lack of credit? Only in some cases. Consumers hunkered down? Yes, in part. Political insanity? Bingo!

One word really says it all — ďdeficits!Ē† The exploding deficit is scaring the hell out of all of us. Letís face it: the federal deficit is already so enormous we have trouble comprehending it. Weíre lucky we can still get anyone to finance it. But, what may be most chilling to us is the lack of concern being shown by the administration and Congress. And when weíre scared about the future, weíll hold off purchases of durable hard goods . . . we donít buy boats when weíre not happy and confident.

We all do budgets in our business and/or personal life. We easily recognize when income isnít covering expenses. We can also see when weíre falling into debt we canít support. So, these days, as we watch our lawmakers in Washington, is it any wonder we canít see how our government is going to pay for our exploding deficits — except by increasing taxes. We arenít sure how much of a tax increase would even be needed but our gut says itís inevitable!†

Top that off with the ongoing push for still more massive bills in Congress from health care to cap†and trade to the plans for more stimulus spending. But as consumers, we like certainties. Weíre uncomfortable when things arenít and it makes us hold off on major expenditures.

If all that isnít enough, how about the unprecedented political rhetoric flying through the air? It appears the green house gases causing global warming are coming from Washington! Like, a senator is called merciless for demanding to know how to pay for an unemployment bill. The President vilifies the nationís bankers. Cabinet members spew the party-line on Sunday talk shows. TV pundits cry socialism. One political party just says ďno.Ē Another says we should urge Congress to pass a bill the majority of Americanís reject and, then, count on a promise lawmakers will correct it after its law. Oh, sure, checkís in the mail! Not surprising, then, against all this background people don’t feel it’s a great time to buy our boats.

I admit Iím not writing this because I have come up with any great solutions Ė wish I did. Guess Iím just finally fed up with all the political drama that never seems to lead to any real solutions. I do feel better venting, though, and if you want to vent here, feel free. Or, if you have any solutions, chime in.

In the meanwhile, letís go back to work and keep fighting our way forward.?
?

Comments

13 comments on “Deficit mentality is holding our customers back!

  1. Komrade Karl

    Some may say you are not listening like Pres. B. Obama….
    I bet you get a post about getting back to boating issues and away from this Political stuff..
    Study Argentina over the last 100 years….It will look very familiar but won’t make you any more comfortable…

    On a boating subject I have heard of a few dealers who have sold the 2010 units they bought last fall but are not replacing them now for fear that when they arrive in mid to late April they will only have 2-3 months to sell them before the 2011’s arrive at competitors dealerships

  2. Noel Osborne

    Norm

    In my opinion you are right on with your assessment. The people who could afford our boats and bought them in the past are scared to death that they may not be able to survive the inevitable tax load that is coming down the road. Many are going to wait until the November elections before electing to add any new debt. I am sure that lending institutions are also very uncomfortable in this free-spending atmosphere. They must be very concerned about our administrations obvious attempt to discredit them in avery way possible in the eyes of consumers. It may be a long time before the banks step up to the plate and start lending again. Marine dealers must continue to plan for a rocky road in the future.

  3. Obrien

    Maybe it is about time to get rid of the “we’s” and “they’s”. Why not get rid of any party designation, and call everyone an independent, free to vote based no the facts, and not beholding to any senior party official. Get rid of the right side of the aisle and the left side of the aisle. Those who arrive in the chamber first, get to sit up front. Those who don’t, sit in the back. Members should not be obligated to vote a certain way because their party leaders demand it. Is it any wonder that we are having our elected officials on both sides of the aisle resigning or retiring because they are fed up with the inability to get anything done? What is the approval rating of the Congress and the Senate? Last I saw it was in single digits.

  4. Red Baron

    Norm, you should send this to every Member of Congress and the White House. Issue #1 is deficits. Issue #2 is jobs. I am not sure health care is even in the top 10 any more.

  5. JOHN ENNIS

    How about the 8 million unemployed..(not countining those who have given up looking for work.}.and the millions more fearful of being unemployed…Do you think they are interested in spending what little money or credit they have on a boat? Cry about the whores in Washington all you want but until the job situation improves boat sales will continue to suck

  6. David Black 111

    norman hit the nail right on the head! Customers that can afford to buy new boats are worried just how much money the government will steal from their bank accounts. They are waiting for the government to stop intruding into the personal lives and bank accounts of all americans. Everytime hot air comes out of washington customers put their purchases and even service on hold! The lenders and customers are coming back slowly but everytime the government has out of control spending customers shy away from the purchase of non essential items like boats. The government spending is hurting our recovery because consumers, dealers and manufacturers are “putting off” expansion becasue their may be a large tax burden placed on their work!

  7. Bob Maxwell

    As a business consultant for the manufacturing industry including Hydracraft Inc. in San Pedro, CA., (see http://www.hydracraft.com) I find that consumers want more value for their hard earned dollars. Value is price, delivery, service, quality-product satisfaction and future value (re-sale).

    Yes, they are concerned about the deficit as you mentioned BUT most American consumers aren’t that savvy when it comes to our Countries economics and they can’t wrap their minds around “trillions” of dollars.

    What needs to change, from what I see in this and other industries such as the automotive industry, is the way USA manufacturer’s “do” business. From the way boats are built, to the inventory on hand, and the complete supply chain / distribution methodology.

    Hydracraft Inc.’s technology with their module designs allows the manufacturer or dealer /distributor the flexibility to customize the size of their boat by simply adding or removing the module panels.
    A dial on the console enables the owner to select a Deep-V hull, a semi-V hull, a flat-bottom hull, or a catamaran multi-hull.

    The transformation takes place within one minute and can be accomplished right on the water. The owner is thus provided with the specific, optimal hull for all boating activities and for the varying weather and surface conditions encountered on a single excursion.

    From my research into the boat manufacturing process, there is not ONE current boat builder, that has the Patented technology that Hydracraft Inc. has to offer.

    What’s holding Hydracraft Inc. back from building their final prototype to bring it to market is investment dollars. This has been a 20+ year long project with Worldwide Patents now in place.

    Hydracraft Inc. only needs $100,000 to finalize the final prototype BUT because of the financial environment of the industry and Country they are struggling to find the money.

    That my friends, is what the slow down in the economy is really effecting….a much needed change in US Boat Manufacturing.

    This is where the soft economy is hurting progress.

    Thank you for the opportunity to share my thoughts.
    Best regards,
    Bob Maxwell
    President / CEO
    Remarketing Financial Inc.
    Orange, CA
    949-228-1998

  8. Michael Bryant

    I believe many of the previous comments have valid points. As a lender, I am afraid I still here all to many times “are lenders really lending”? Lets face it banks have spent very little advertising dollars promoting the fact they are eager to lend money to consumers. Aside from from real estate money brokers, there is a void in this area. There is nothing coming from any of the major banks in the way of confidence to support the notion that they will support consumer purchases , especially a boat. Despite the fact there are those lenders still supporting marine lending are loaning money,but the word is not getting out there. I feel that if there was a more concerted effort to raise the awareness before during and after trade shows, that effort would produce more sales. I know this sounds self serving but i have making boat loans for over thirty years and my experience tells me this is what needs to happen. The rest of the financial mess will work itself out eventually. A President can help speed up a recovery or delay one but he can not stop the process.

  9. AnonymousBob

    I second Obrien’s message. The idiots in DC are not at all interested in us as constituents, much less as members of the boating industry. They are only concerned about making the lobbyists happy so they can buy the next election. The Supreme Court made that even easier with their recent corporate election buying decision and further minimized citizen’s voices.

    I have to agree with the intent of Norm’s message: people are tired of the happenings in DC and the illusion that the crazies are running the asylum. There is no direction coming from either side of the aisle, only finger pointing and name calling. Americans are tired of watching a bunch of out-of-touch-with-reality people in DC trying to outdo one another with the next round of Gotcha! politics. It’s disgusting, it’s sad, and it’s the reason America is still in a recession.

    Until the job picture stabilizes and people begin to feel secure in their situations, that is when the marine industry may see some sort of light flickering in the distance. We also need to figure out how to get prices in line with reality. I’ve been in the industry for some time and I am still in sticker shock at some of the package prices I see at the shows.

    Oh, and to Bob Maxwell: nice plug for your business! (please add LOTS of sarcasm)

  10. Bob Maxwell

    AnonymousBob,
    “Oh, and to Bob Maxwell: nice plug for your business! (please add LOTS of sarcasm)”

    Thank you for adding me to your blog response.

    I actually thought I was responding to the first part of Norm’s Blog:
    “Boat sales appear to have gotten a boost from the winter boat shows. Good news, for sure. But, you gotta be in a coma not see why our unit sales still arenít even close to what they should be. Is it no customers? No, theyíre out there. Lack of credit? Only in some cases. Consumers hunkered down? Yes, in part. Political insanity? Bingo!”

    And in the last paragraph Norm wrote:

    “I admit Iím not writing this because I have come up with any great solutions Ė wish I did.”

    You see Anonymous Bob, I believe in trying to help find solutions to manufacturing and industry problems, not blame the politicians or our Government in general. That my friend is way to easy.

    My understanding of the way I read Norm’s blog was, the industry sales are down and it’s the “political insanity” that is the cause. He says,” Is it no customers? No, theyíre out there. Lack of credit? Only in some cases. Consumers hunkered down? Yes, in part. Political insanity? Bingo!”

    I was reading an interesting article the other day titled “The Dealership of TOMORROW ” and here is what two Chairman of the Boards said, like Dusty McCoy, chairman and CEO, Brunswick Corp. talking about inventory turns and the cost of floor planning to dealers or Irwin Jacobs, Chairman, Genmar Holdings LLC says “I have a theory and a belief and a strong commitment that there has to be a fundamental model change in the industry.” These are two, high level Executives saying “Change” is what’s needed… unless of course, AnonymousBob, they are just trying to “plug their businesses.”

    I personally want Government out of my business and out of my personal life as much as possible. I have yet, in 54+ years found almost anything the Government gets involved with is tainted with greed and filling the pockets for lobbyist and Politicians. Have you ever wondered why a person (s) with a net worth of $200+ MILLION DOLLARS would want to be a State Senator? It’s certainly not for the monthly paycheck!

    I would rather use my time and the time for my clients in a productive, “what can WE do to make our industry and our Company more profitable,” environment.

    That is the way we are going to re-build manufacturing in America which will add new jobs.

    It easy to hide behind “Anonymous” names, I believe in telling people who I am. It easy to bash Politicians and Gov’t…. It’s extremely hard to change an industry, just ask the Auto Manufacturers.

    I believe in sharing ideas and technology to re-build America in a positive manor, not taking cheap shots at those who try to make a difference. If I have a client, in a certain Industry, that has cutting edge ideas and technology, I will SHOUT THEIR NAMES TO THE HEAVENS.

    If you feel, AnonymousBob, that I am “plugging” my clients, you are right. Hydracraft Inc.’s technology will help to change the boating industry if given the chance. I hope you will contact me AnonymousBob and help us make a positive change for this great boating industry. You state you have been in the industry for several years and you believe the industry has to “figure out” how to get prices in line with reality.. I believe we have the answer to your question so give me a call.

    Best regards to all.

  11. Chris Marely

    Government? The same argument was made against politicians and taxes when Athens built the Parthenon. The world survived and so did greek boating. People aren’t spending because thier savings and investments are down. They don’t know if the economy will recover in 2010, 2012 or 2014. The know the parable of the Ant and the Grasshopper and apply it to thier large ticket purchases.

  12. steve s

    Maxwell, we’re all in business. That’s why it’s called “Dealer Outlook.” Not really a forum for plugging our companies??

  13. Captain Andrew

    I think the American consumer can no longer afford luxury items. That is why boat sales are not occurring. I have said it before I will say it again. There is a new economy out there and it has A LOT less disposable income in it. This is the new reality.

Leave a Reply

Your email address will not be published. Required fields are marked *

Comments are moderated and generally will be posted if they are on-topic and not abusive. For more information, please see our Comments Policy.