May 4, 2009 – Data offers insight into used market

By Jeff Hemmel
Contributing writer
Numbers can say a lot about the PWC market. Based on new and used vehicle sales volume from registration data compiled by InfoLink, it’s obvious that, while recent economic woes have certainly taken their toll, the total PWC market has proved relatively stable during the past decade.
More than 200,000 units a year have been sold on a yearly basis. Used vehicles, however, have grown into a substantial piece of the pie.
Ten years ago, used and new sales were almost equal, with new vehicles holding the slight advantage. That situation flip-flopped rather dramatically in 1999, and in the following years used volume peaked at more than 150,000 units a year, before settling into a more stable pattern of 125,000-plus units in recent years. New sales, meanwhile, peaked in 1996 with around 200,000 units moved. Today, it’s closer to the 75,000 mark.
Overall PWC in use, however, has stayed consistent. In 1999, there were 1.2 million craft in use; in 2007, there were 1.23 million. In fact,
1.2 million has been the average for nearly a decade. One obvious conclusion from the data is that a strong base of PWC users remain committed to the sport. Another, however, is that the used models from the sport’s boom years are getting rather long in the tooth. Manufacturers see this as a trend that will benefit new sales.
“Products in the used market are continuing to get older, with the average age now around
10 years old,” said Yamaha Marketing Communications Manager Andrew Cullen. “Total used sales have been steadily declining as these products age. With the industry remaining stable in total volume, this points to growing consumer demand in new products.”
The appeal of a new vehicle is obvious. A used model, however, has its own advantages — namely price. By that measure, used vehicles open up the sport to a far greater audience that might otherwise be excluded by today’s often daunting price tags.
“You can capture the people who can’t afford a new craft,” said Scott Webster, inventory manager at California’s Bert’s Mega Mall. “Sometimes if it’s cheap enough, they can write a check or put it on their credit card.”
Webster estimates 50 percent of new sales come with a trade. In a good year, the store will move several hundred of those used craft. “Obviously we bring them in as cheap as we can,” he said. “They don’t always come in as cheap as you’d like them, but as long as you can mark them up 20 percent or so, you’ll do okay. A lot of times we make more than that.”
Webster suggests carefully checking out any trade-in to make sure you’re not just buying someone else’s problem. Undesirable models are wholesaled or advertised as fixer-uppers. The dealership also keeps its focus on models no less than 5 years old.
Other shops, like Austin’s Unlimited Powersports in Austin, Texas, have found success specializing in used craft. Owner Lee Bryant is a wholesaler for many boat dealerships that don’t normally take in PWC. “If you can get it for the right price, get a good detail shop to go over it. It’s definitely cost-effective,” said Bryant.
He’s a big believer in aftermarket engine firm Short Block Technologies (SBT). “The biggest things I’ve done is embraced SBT,” said Bryant. “I can’t compete with the warranty they give out. If I get something in, I put in an SBT motor and sell the personal watercraft by telling the customer it has a better warranty now than when it was brand new.”
That’s obviously music to SBT’s ears, but also a reality. “Some dealers can’t be competitive by offering an all-OE lineup, when they’re trying to attract a market that’s not just warranty, that’s not just a 2-3-year-old ski,” said SBT President Cj Lammers. “With our quality and reputation, we offer the chance for them to get into the used market as well, and still make a reasonable living. And give the customer a competitive price.”
Recently, Sea-Doo began touting the long-term longevity of its craft. “BRP has done a tremendous amount of consumer research and one of the items that was near the top of the chart in regard to what was really important to customers and/or was a big influencer on their purchasing decision was that the watercraft they bought had to be reliable, hassle-free and would last them 10-years plus,” said Sea-Doo’s Tim McKercher.
“What may be interesting is this study was done, and the strategy implemented, before the recession really hit, because the basic need of long-lasting fun was there. But now that the economy is challenging, to say the least, offering consumers more value for their dollar certainly hits the nail on the head in overall strategy.”