By Jeff Hemmel
It comes as no surprise that the 2009 season is one most in the powersports industry would rather forget. The economy’s impact on PWC sales hit hard at the end of 2008, and that depressed outlook continued throughout 2009.
Just how bad was it? The full picture is only now starting to emerge. At this point in the season, manufacturers still play things close to the vest. That leaves us to glean part of the picture from information provided by third-party sources, like Statistical Surveys Inc., which tracks the various powersports markets based on state registration numbers.
As the manufacturers point out, this doesn’t always provide the whole picture. For various reasons, boats may not ever get registered or registrations are delayed. Still, it’s a snapshot, and one that elicited commentary from the players that be.
The Big Picture
The big-picture takeaway is that the industry has continued on the downward path it started last season. Looking at the peak sales season results of October 2008-September 2009 from early reporting states, sales have slipped at least 25 percent year-over-year. Taking into account the impact of the previous season, that puts the industry down substantially from the 88,000 units sold as recently as 2006.
Those early reporting states, including Texas, California and others, represent approximately 64 percent of the U.S. total.
Models that are selling best continue to overwhelmingly be the “introductory” craft. Introductory models dominate the top 10 sellers, with boats like Yamaha’s VX series, Kawasaki’s STX-15F and Sea-Doo’s GTI line all showing favor with consumers. Yamaha has fared especially well in this regard, with five of the top 10. That situation likely played a role in Yamaha closing the gap on Sea-Doo in the race for market leadership.
According to the early Statistical Surveys numbers, Yamaha has gained in percentage, now holding nearly 36 percent of the market in those states (up from the same period last year of 34.2 percent), while Sea-Doo has fallen (currently nearly 40 percent from the previous period’s 42.2 percent). Kawasaki also has showed gains, up nearly a percentage point to 15.3 percent.
“In a challenging market like we experienced in 2009, companies really have two choices: To either take market share from the competition or shrink with the rest of the market,” noted Bryan Seti, national marketing manager for Yamaha’s WaterCraft Group. “We were fortunate to report a 2.8 percent share gain this year, due in part to strong sales of the Yamaha VX Series, which was the No. 1 seller in the industry, and the FX Cruiser SHO, which was the top-selling luxury performance model in 2009.”
“As you can imagine, the situation is difficult, but we planned accordingly,” said Sea-Doo’s Louis Levesque. “The PWC industry is disappointing but we were expecting those kind of results due to the economic condition.
“We were pleased with the sale of our GTX Limited iS and RXT iS. Those models were expensive and had less retail offers, but despite the economic crisis our results were very good. Sea-Doo is the leader in the industry and we are well positioned in the high-end category. We also have strong results in the low end but opportunity exists. We believe that our new iControl technology will put Sea-Doo in a new class of PWC.”
As for Kawasaki, Director of Product Planning Patrick Kelley noted “sales were as expected, considering the poor economic situation. We actually picked up a bit of market share, so overall we’re okay.”
One fact the 2009 sales numbers bring to light is that leftover product is still very much in the pipeline. No less than six of 2009‘s top 10 sellers are from the 2008 model year. Insiders report there was significant inventory at the end of 2008, a situation that lessened early in ’09, but again may be a concern.
Dealers have been forced to adjust. “Due to the challenging economic situation we have been keeping tighter control of our inventory than ever before,” says Dave Bamdas of Riva Motorsports. “In the good times, we relied on strong sales that produced excellent sell-through. Now through reduced ordering and constant monitoring of aging inventory, we have adjusted our inventory levels to align with the decreased sales.
“We have been quick to identify slow-moving stock and take action to move it out before we are burdened by flooring interest. A well-managed inventory is the key to surviving during these tough times.”
Production numbers are expected to be slashed again for 2010 for what is expected to be continuing weak sales.
“We’ve been aggressive, and we will help our dealers in every way we can to sell products,” says Seti. “Last season, this included discounts, financing, extended warranties, unemployment protection and the industry’s only co-op to cash program. We will continue to be a strong partner for our dealers in this business.”
A Look Forward
Both Yamaha and Kawasaki are taking a decidedly conservative approach to 2010, with Kawasaki making little change but colors and graphics, while Yamaha has only mildly tweaked the VX line. Sea-Doo, however, continues to boldly forge ahead with a mix of new product.
“You know BRP, innovation is key and we believe that iControl can put Sea-Doo in a new class of PWC and will also bring new PWC users,” details Levesque. “We are committed to this industry and we will bring new products in the future. This will ensure growth for us and our dealer network.”
Which strategy is best will be revealed a year from now.