Big Industry Update: Lawsuit Filed! $100 Million in Inventory Default? What are Ripple Effects?
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- čas přidán 14. 04. 2024
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It wasn’t that long ago when $60,000 would get you a really nice boat.. now they’re like $190,000 and it’s absurd.
its amazing how expensive boats have become. Like college tuition. The prices have surpassed inflation. Seems like Execs are getting super rich. Bass boats have also gone up substationally in the last 10-20 years.
My friend just bought a leftover 2022 from Paradise Marine in SC that just went out of business. He went to the Atlanta Boat Show and said nothing there that would cause him to sell his 2013 Manitou and spend an extra $40K. He said this deal was worth it. I saw the boat yesterday. It's a really nice Manitou Oasis 25 RF SHP with a 250 all for $63K (included trailer).
No surprise hearing about boat dealerships in trouble. Inflation has eaten up all discretionary spending. Dealerships around here are starting to feel the pressure as their inventory builds to all time highs along with spending record amounts of money on floor plans due to the interest rates. With last month's (March 2024) economic data, it will be doubtful the feds will be able to reduce rates this year and some are predicting a rate increase. The feds know it would be economic suicide to reduce rates when inflation is increasing again. I will bet this is just the start of difficult economic times for the recreational boating industry. The RV industry is reporting more shipments than last year but sales are 30% lower from the year before which means dealers are overstocked. RV dealers still have some 2022's, a lot of 2023 and 2024 models left and 2025's are due out soon. Since it takes longer to manufacture a boat when compared to an RV, it takes longer for the boating market to feel the negative impact. Same thing happened in the 2008 Great Financial Crises. The same thing happened from 1974 to 1981 which was the last time we went through an inflationary crisis and put many boat MFG and dealers out of business. Remember Thompson, Cruisers Inc, Uniflight, Carver, Reinell, Bryant, Glaspar to name a few.
Capitalism,
Well, guess they should have saved some of that ridiculous ADM money they were racking up just a short while ago?
I would like to know how many boats were bought with the trillions of $$$$ of ppp money....I know of several people that did.
@@bmwlane8834 it was easy. They send you a 150k check to your business that you don't need... so you go buy a boat. That's how.
@@denialphasebitcoin5639 True free market capitalism doesn’t include central banks causing currency devaluation.
I used to be a RV and marine dealer parts manager, so I was always very in tune with what was going on in the industry and being on the parts and service side. You know we deal with the people after the sale for years and years and I think the biggest problem facing both industries right now is quality of product, vs the price they’re charging for them with dealers, wanting more and more markup and more and more margin. Also doing less work to used units to make them better for sale combined with rapid inflation. It just makes for a cocktail of poor quality products and customers that expect better for what they’re having to pay.
Not surprising @ all. Worked for a very high end skiff company that Malibu bought & watched them destroy the reputation for a quality product within a 2 yr period. The boat company never had an issue of selling quality boats, but then they bought it & the only thing they cared about was quantity not quality.
Thanks for insight
Buy, buy, buy!!!!! This is a great opportunity to negotiate lower prices. I just negotiated a $550,000 reduction on a brand new boat in assembly, as the position holder could not afford to take delivery!!!! Fantastic. You could buy, hold and resell in a year and make $$$$ at this rate.
It’s just the boat industry repeating history
Purchased a 2024 Tahoe pontoon from Tommy’s FL and left my previous boat with them on consignment. Found out on 6/25 that they had filled bankruptcy and were no longer handling consignments as of May 20th but yet Tommy’s failed to advise me of same. The only reason I found out was when I contacted them to send the new boat and trailer registration. If I had not contacted them, I would still be in the dark. Hope to retrieve the boat within a few days without issue from their lender.
Wow glad you got the boat back
I work for Yamaha Jet Boat in Vonore, TN. I believe this company is headed in the same direction perhaps in a different way. Local Mastercraft and Sea Ray have either cut employees and or hours per week. Malibu boats is in our local residential area. They have cut this weeks production. Yamaha has too many boats in hold (on hand) we will be off an extra week during the scheduled inventory July shutdown. Some rumors say we will be off at least a month.
The dealer is under no obligation to take the inventory and associated floor-plan debt. Sounds like they gambled on factory incentives and now they are blaming the OEM for their own greed. Probably in default and the attorneys are trolling to rope in the OEM.
I know years before Covid Malibu tried getting a dealer in the fall to take left over last year inventory. They refused and as a result Malibu pulled their franchise to sell. Though I’m the industry this is not an uncommon practice if it’s cars, boats, or appliances.
Tommy agreed to take the inventory. If it was attached to money or not they still did it. To me the bigger reason for their fall was the buying of so many dealers. The debt they took on to purchase those dealers is the main cause. The market was strong and the cash was easy so they overpaid for different dealers. Market slows margins are smaller and they cannot keep up with the debt payments. It’s not uncommon issue when you expand as fast as they did. Bottom line it was bad business.
I think its worth noting the root cause of this issue isn't due to the waning demand but the ridiculous price increase for new boats within the past few years. Many more boats would be sold if people could actually afford them in the first place. I payed 105k for new 2019 22lsv. A 2024 22lsv similarly equipped is now 180k plus. This is also compounded with rates going from 5 percent in 2020 to now 8+
Inflation, added technology (necessary or unnecessary) have certainly pushed prices up over the past 5 years
I never look much at the Malibu's, but I have paid close attention to Axis over the years (budget brand owned by malibu.) The axis boats have a lot of frivolous features added after 2020. I saw an A225 for 140k at the boat show. Unbelievable. I would rather have the option to buy the old 2020 version for 100k which is still a big mark up from inflation. They used to be about 80k back then.
Who buys a unnecessary depreciating asset on credit?
@@Xalta_Sailorevery single boat buyer
I don't think this is like car manufacturers, seems like the dealers could have gotten greedy. There was a lot of money printed and a lot of irrational spending. I find it hard to believe the dealer had a gun to his head to take on all the inventory.
I think we all deserve a free Malibu.
This happens in every industry, when sales are down the salesman push harder. Sales are to go up each year, END OF STORY according to upper management.
Great video. Keep up the great work you are doing for the community. Here is my two cents, I don't see the use market crashing as fast. With the high(understatement) inflation on new boats. The used market can hold REAL prices for a while.
Thanks Charlie! Have a great summer on the water!
That's because new boats are just starting to drop prices. Once new boat pricing starts needing to liquidate... used will crater too.
Used has already cratered. That's why I finally bought. You can talk people down 25% from their original asking they were firm on a month ago.
Sellers are getting depserate... the bleed has been bleeding and will continue.
Sucks for everyone who has a loan from the last 3 years.
Trillions of PPP money that most companies didn't need and many people bought new boats, rv, and airplanes real estate....I know some. Most of that money is spent now.
Exactly
My buddies dad got 600k. He had about 25 employees. Didn’t need a penny if it his company did fine during covid.
We bought our Cobalt at the perfect time; right before the pandemic. Our same boat has doubled in price to $320k in four years. No thanks. I love our boat do not get me wrong. Cobalt makes an amazing boat. However, $320k is absurd. That is Malibu’s doing. For those that do not know Malibu owned Cobalt as of 2017.
Malibu has cut corners, raising prices and decreasing quality. A lot of 2022 and 2023 models still floating because they pumped out so many. They care too much about their stock/shareholders and have failed to adjust to the market accordingly
my local boat dealer /shop power suports in seffne Florida is close I think people can't buy shit anymore that's by design
Never heard of Tommy or Malibu boats. Where are they made?
They are US based in Tennessee
Tommy’s has ~15 locations expanded over pat 5 years or so
We produce 34 boats a day i just don't see who's buying all these boats. We make more than Malibu in Loudon, Mastercraft, Sea Ray in Vonore.
I drove by your facitiliy the other week and that's what I was thinking... there are hundreds of boats wrapped and just sitting right now in the yard.
The overpriced glut consequences are coming home to roost now.
I don't wish anything ill on anyone loosing their jobs but the US market really needs to see some pain involving price pressure pushing boat/automobile/home prices down 20%.
If you seeing a large increase of automobile dealerships going under, some boat dealerships are not going to be far behind going under as well.
For most where I live, I don't see most people lining up to buy +$70k priced wakeboard and pontoon boats. That's generally the corporate higher ups that are well off who affords them.
They aren't exactly a large percentage of the population, so go figure on what that means.
Pretty much all wakeboard boats now start at about 110k. Heyday is the only brand offering something in the mid 70's.