As we approach 2009 I can’t help but wonder what the new year will bring for the Marine industry. I recently read an op-ed piece by Thomas Friedman “Time to Reboot America” and while GM has become the poster child for the bailouts, I know that our industry could face a similar fate. It’s time to consider what we must do in order to reboot and get back on track.
Five things that need to change.
1) Customer Support - Customer Support in our industry is just short of pathetic. The #1 reason people get out of boating is problems with boats. Broken parts, boats that don’t work, things that go wrong and no one to fix these items. Its a problem and one that must be proactively resolved. Its not an accident that there is the saying “the two best days of owning a boat are the day you buy it and the day you sell it” . With the number of boats being built over 50′ each year there is no reason that you couldn’t have your own personal technician to support your needs.
2) Difficult operation – Boats are too difficult to operate, maneuver, maintain, etc. How can my car go 15,000 miles without an oil change, yet the boats engine needs one after 50 hours? There is a computer system for the Navigation, Engines, Generators, Monitoring System, Audio/Visual, Alarms, etc. , and none of these systems intelligently communicate with each other in any meaningful way. Why isn’t there one central Operating System for the entire yacht? One that is smart enough to track the maintenance due, order parts needed for it and have them delivered to the next port of call that you have plotted on your Navigation chart.
3) Crew – (really only applies to boats 60′ and over) The #2 reason people get out of yachting is for lack of good, competent crew. There is a shortage in our industry and as the boats get bigger the demand for crew is greater. The training for getting your license is outdated and its a system that needs to be brought up-to-date with current yachting technology. Where is the Ritz Carlton school for yacht crews? One that teaches service, etiquette, hospitality. Where is the training of maintaining, cleaning, and caring for a boat? There should be a world wide recognized school for this profession. One that has the support of all the manufacturers, even sponsored by the manufacturers.
4) Production Costs – For the most part boats are built the same way today as they were in the 50′s. I realize materials have changed as have techniques, but our industry is still very labor intensive . Where is the automation? Where is the breakthrough in material cost reduction? In 1989, a SeaRay 390 retailed for $149,995. Today that same boat would retail for around $350,000, a 58% increase over 20 years. For comparison the Honda Accord in 1989 had a base price of $11,230 while in today that base price is $20,775. That’s a 46% increase. A gallon of milk in 1989 was $2.34. Today it would cost you $4.28, again 46% increase. The irony , is that while the price of a boat has increased so much the Gross Profit Margins have not. I cant speak for every company however I feel very confident in saying that GPM are the same or in most cases lower today than they were in 1989. We must focus on lowering the cost of producing boats or face the realization that we could soon price a product and industry out of existence.
5) Retail Experience – Buying a product that costs hundreds of thousands to millions of dollars should have a retail experience that is commensurate with that. Today we don’t have that. Why not? Where are the knowledgeable salesmen with state-of-the-art showrooms. Where are the websites that have users feedback from their experiences with the products? Where are the magazine articles with head to head shootouts that put one boat up against another in a test to see which one prevails?
Unless the leaders of our industry collectively work together to resolve these issues then we too will face the fate of the US Auto Industry. The only problem is, I’m certain there will be no bailing out our sinking ship.