The Tide’s a-Turnin’!
The South African boating industry has been stuck in a fair sized rut for a while but is there light at the end of the very long and dark tunnel? With the United States usually being the forerunner and marker of what the future holds for South Africa and the rest of the world, signs are looking positive. Leisure Boating magazine investigates.
It seems as though the tide is turning for the US boat market – and traditionally, our local industry follows the trend. But, what does 2013 hold? To find out, we have to look at what’s happening to the industry overseas and chat to a few South Africans ‘in the know’ for their predictions for the year ahead. The Miami Boat Show, held in February every year, is one of the biggest and most attended boating events in the world. In addition to the huge variety of jaw-dropping boats on display, the show catalogue provided some informative indicators of positive growth in the industry. It reported that there was an incredible 10% increase in new powerboat sales during 2012 – which is the first sign of healthy growth since the recession – but also that it’s mostly small, versatile boats that are leading the recovery.
The National Marine Manufacturers’ Association (NMMA) reported that early projections indicate additional growth of as much as 5-10% for the boating industry in 2013. This year’s growth is, however, dependent on several factors such as continued improvement in economic conditions that impact recreational boating, including consumer confidence and the housing market, as well as sustained increases in consumer participation in outdoor recreation. “Improving economic conditions and what seems to be a resurgence in Americans’ love for the outdoors, helped to fuel the steady growth in new power boat sales in 2012,” says Thom Dammrich, president of NMMA.
Builders of small, versatile craft are the standard bearers What appears to be a new trend around the world, and certainly a deciding factor in the turning of the tide for the boating industry is the building of smaller, innovative and versatile craft. These smaller craft, ranging from 15-26 foot, appeal to a large consumer group because of their versatility and reasonable price.
Craft less than 27 feet including aluminium all-purpose boats, pontoons, fibreglass bowriders, fish and ski boats, and jet boats are what make up 96% of the 12.4 million currently registered boats in the US, according to the NMMA. “One of the most significant trends we’re seeing in boat manufacturing is the versatile boat – one that can pull tubers or wakeboarders, can be used for fishing outings, relaxing with family or entertaining friends,” said Dammrich. “After a decade of decline, Americans are participating in outdoor recreation in growing numbers, and as they look for ways to spend time outdoors, boat manufacturers are taking their cue, producing innovative boats that offer an all-encompassing entry to the boating lifestyle at a variety of price points.” In 2011, boating participation increased 10 percent to 83 million in the US – the largest proportion of adults (34.8%) who went boating since 1997 (35.8%), reports the NMMA.
“One of the most significant trends we’re seeing in boat manufacturing is the versatile boat – one that can pull tubers or wakeboarders, can be used for fishing outings, relaxing with family or entertaining friends,” said Dammrich. “After a decade of decline, Americans are participating in outdoor recreation in growing numbers, and as they look for ways to spend time outdoors, boat manufacturers are taking their cue, producing innovative boats that offer an all-encompassing entry to the boating lifestyle at a variety of price points.” In 2011, boating participation increased 10 percent to 83 million in the US – the largest proportion of adults (34.8%) who went boating since 1997 (35.8%), reports the NMMA. What’s holding SA boating back?
According to the Department of Trade and Industry (the dti) the total South African boatbuilding and support industry employs about 4 500 people and produces goods and services valued at R1.2 billion. The dti believes that, although the South African boating industry is globally competitive, having won numerous international ‘Boat of the Year’ awards, and has major growth potential, significant growth and development constraints exist that require collective action to support the sector in realising this potential. The basic constraints include inadequate investment at firm level in acquiring new technologies and machinery to stay abreast of international innovation trends, as well as the lack of industry specific skills such as technical boatbuilding skills as well as managerial knowledge.
The leisure boat market has been hit hard by the recession– as all sectors producing luxury and lifestyle products were – but the international market is starting to creep forward and the competition is fierce. Therefore, the constraints mentioned needs to be dealt with as swiftly and smoothly as possible. Focus needs to shift to what the market demands and can afford – smaller, more versatile craft. Consumers are just starting to regain confidence and boat builders need to pounce on the opportunity to continue the successful global trend. There are positive signs that the industry is certainly better off than it was two years ago, and if we use the United States as a precursor of what’s in store for SA, things are looking up!
SA dealers and other influential players voice their opinions Jeremy Barnes (left) of Honda Marine Somerset West spoke to Leisure Boating and had the following to say about South African boating and his dealership in particular: “The 2012/2013 boating season has been the best in the last three years in a number of areas, our workshop turn-out is up 58% YTD for the period under review and interestingly there is a clear trend developing, boat owners are spending more money on their boats than they have at any time over the past three years.
“This increased spend is a result of customising their boats with purchases such as wake board towers, Bimini covers, and new, state-of-the-art electronic devices, such as GPS/ Sonar systems as well as audio equipment such as iPod docking stations. The most encouraging aspect of this trend is that people are USING their boats,” Barnes says. Don Jarrett of Austral Marine shares his opinion with us: “I don’t think any of us can afford to carry on like we have been forced to – it is about getting the major players, and organizations, to create a more positive perception of the best SA built boats and dealers. “The design and development of multi-purpose boats is something that is catching on and we intend to expand our range in this regard.
“SA boat owners have always been inclined to over-power their boats – this is an educational programme that sales people need to address – the initial outlay and normal running expenses that can be saved in this manner alone are some of the things that could make boating more affordable to more people. Why waste money unnecessarily – you certainly do not need the size and power that have become a general perception in order to have fun – in fact, the smaller boats are sometimes more fun.” Andre van Helsdingen of Twin Boats and Trailers says they’ve sold fewer boats in 2012 than in past years but that their total turnover was the best they’ve had in a long time. “It was thus one of our best years in turnover but worst in volume. Our sales in 2011 and 2012 mostly came from used boats with modern engines and looks,” he says. “Boats between 22 and 24 feet did fairly well. The cost of larger boats as well as the bigger engine it requires, deters buyers.” “In my honest opinion, 2013 might still be a little tough for the SA boating industry. But, as always, Twin Boats and Trailers will work around it to make it a great year, because when times are tough, new innovations and better deals will inevitably come to the surface!”
Rob Clarke, of DOCKPRO South Africa had this to say: “At DOCKPRO, we have experienced a significant increase in queries converting to actual sales over the last six months. As has happened in the US, South Africans are again prepared to buy ‘nice to have’ items, which augurs well for the boating market in South Africa in 2013 and thereafter. However, for boating products to be successful in the future, they have to continually adapt to changes in the market. Consumers worldwide are trending towards multi function, eco friendly products and South Africa is no exception. We believe that DOCKPRO’s modular docking systems and Jetslides are just what the modern consumer demands – versatile, convenient, durable, NO maintenance and environmentally friendly – perfect for storing the latest ‘versatile’ boat!”
Greg Bennett of Yamaha Marine believes that, “We [the SA Boating Industry] usually lag a season or so behind what happens in the US so it is possible that we will see a small improvement in sales next summer (from September onwards) – provided our local economy doesn’t have another crisis setback.
“The Yamaha-owned factories in the US – the G3 Suncatcher aluminium pontoon boats and Jon boats have reported increased sales, indicating the consumer’s desire to have a comfortable platform that can fulfil the typical calm water recreational user’s need of both waterskiing and cruising. “We anticipate a similar demand here as the public discovers the versatility of these and deck boats. “But the real growth will probably come from midrange, affordable family runabouts. The huge demand for used boats at reasonable prices obviously tells us that we still have a considerable number of families who want to be on the water but can’t justify the high cost of our new products. “How we meet this challenge this coming year will determine the growth in our industry,” Greg says. Boating World’s Derrick Levy says: “In 2009 – 2011 we have found that the market had gone much quieter and dropped about 30% due to the bank’s hesitation to finance anything. “We however found that in 2011 the market had picked up slightly and we sold some new Riviera and Fairline boats over 40 foot and a number of Airberths and brokerage boats.
“In 2012 this trend seemed to continue upwards with new boat sales and brokerage sales as well as Airberth sales. 2013 looks to be a good year and we feel the market confidence has definitely picked up.” We also spoke to Vanessa Davidson, CEO of MIASA (the Marine Industry Association of South Africa). “As you correctly point out, the green shoots in the American market are often precursors to growth in the South African market. The NMMA has successfully run a Discover Boating campaign in the US which encourages new entrants into recreational boating, and MIASA will be initiating a similar drive called “Grow Boating” this year. “Encouraging consumers to choose boating over other recreational lifestyle choices is key and encouraging those who have not traditionally been involved in boating, both at sea and on our inland waters, is vital to growing the industry. MIASA will also be launching the “Builders Plate” for trailerable craft in the next few months, which we anticipate will build consumer confidence when buying a boat, give buyers peace of mind that their boat has been built to specification, and ensure that reputable boat builders grow their market share.
“We are currently working with the dti to develop three new programmes for the Industrial Policy Action Plan for 2013/14 which is where we work closely with government to address the bottlenecks and challenges for the industry, such as the new technologies and skills development issues you [Leisure Boating magazine] raise. Engagement with provincial and national government entities is critical to the growth of our sector.”