International Boat Industry - June-July 2018

Markets & Regions

OVERVIEW | US

http://www.ibi-plus.com International Boat Industry | JUNE–JULY 2018 23

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However, the US remains a net exporter of smaller

boats, particularly outboards and sterndrives.

Ironically, news of the booming international trade

in boats comes at a time of increased uncertainty for

exporters and importers alike. Protectionist tariffs

on aluminium and steel proposed by the Trump

administration threaten to significantly increase

production costs for American boatbuilders, and

drive up retail prices.

“While the dollar has weakened a bit and that

has helped exports, we’re still below the level

where we should be,” says NMMA president Thom

Dammrich. “Compounding that, right now there’s

obviously a lot of uncertainty in the market around

tariffs and retaliatory tariffs. It’s very confusing for

people because there’s section 232 tariffs, there are

aluminium sheet anti-dumping tariffs, there are

section 301 tariffs in China, and there are threats of

retaliatory tariffs from Europe, China and Canada.

We have another potential 60% anti-dumping duty

on aluminium sheet, and then we’ve got 25% tariffs

on products coming out of China that are used by the

boating industry.

“These tariffs have the potential to be extremely

disruptive to users of aluminium and steel, and

there are hundreds of thousands of jobs in different

industries that will be affected. All of that has the

potential to put immense upward pressure on the

prices of US-built boats.”

RENEGOTIATING NAFTA

Complicating trade matters further, ongoing efforts

to renegotiate the North American Free Trade

Agreement (NAFTA) between the US, Canada and

Mexico have cast even further uncertainty on the US

boat industry.

The impacts of a renegotiated NAFTA are even

harder to anticipate than tariff implications, given

the extremely tight integration between the US and

Canadian economies. Many US boatbuilders have

supply chains and distribution channels that span all

three countries, meaning boat parts and accessories

can cross borders multiple times before a boat is

ultimately sold at retail.

With Mexico facing a presidential election on July 1

and looming mid-term elections in the US, pressure to

conclude a deal by late spring had been mounting. But

by the time IBI went to press, lingering sticking points

suggest further rounds of negotiations will be required

to conclude a lasting deal.

PWCS PROVING STRONG GATEWAY TO BOATING

PERSONAL WATERCRAFT CONTINUE to mark significant

year-over-year sales growth and attract an unusually high

number of first-time buyers, providing legitimacy to the long-

held suggestion PWCs represents a strong gateway to boating.

Representing nearly 24% of the overall US boating market,

according to data from Statistical Surveys Inc, the 63,314

personal watercrat sold in 2017 represent a 5.09% gain over

the 60,247 PWCs sold in the US during 2016. This marks the

category’s sixth consecutive season of year-over-year growth.

While that figure includes a wide range of units from

entry-level to high-end, manufacturers note that a substantial

number of units are being purchased by first-time buyers.

“I certainly do believe that personal watercrat are the best

gateway to boating,” says Yamaha’s general manager of sales

and marketing, Bryan Seti. “They oten provide a consumer’s

first experience with being on the water, whether they’re new

to boating or part of a young family. Our first-time buyer rate is

over 50%.”

“Personal watercrat provide a simple and afordable way to

get out on the water,” agrees BRP’s Tim McKercher. “PWCs will

continue to be arguably the best gateway into boating because

of their afordability, ease of operation, low cost of ownership,

and an incredible experience per dollar spent.”

Dave Oventhal, Kawasaki’s senior manager of corporate

research and product management, cautions that price

perceptions can be critical with many first-time buyers. “My

discussions with dealers notes that units around $10,000 are

still the best sellers,” he says. “That said, the low-priced entry

models are excellent for growing the segment and bringing in

new riders.”

What all manufacturers agree on is that economic

stability marked by low interest rates, low unemployment

and low inflation provide many first-time purchasers with the

confidence needed to make that initial purchase.

TThe Kawasaki

Jet Ski SX-R retails at

around US$10,000