Boat makers need to rethink boat making
AMSTERDAM _ At the annual Marine Equipment Trade Show here recently _ the world’s largest B2B event for yacht makers and their suppliers _ a wake-up call went out: Boat makers must bring prices down. They should take a cue from car makers who add new features and refinements all the time yet hold retail prices down while protecting operating margins.
“As an industry, we’re beginning to price ourselves out of business,” said Dustan E. McCoy, CEO of Brunswick Corporation of the United States, maker of leisure motor boats _ from runabouts to cruisers _ and marine engines. Based at Lake Forest, Illinois, Brunswick Corp. recently surveyed 50,000 boating consumers in the United States, Canada, Europe and Brazil.
McCoy said his company discovered that consumers get that boat makers present boating as an attractive lifestyle. “What they’re having trouble with, however, is balancing the benefits of boating with the costs of boating,” he added. “The cost of new boats is rising dramatically faster than the rate of inflation.”
McCoy said “as an industry, we’re beginning to price ourselves out of business. It’s difficult for a lot of people to wrap their heads around that because we’ve all become very good at adding features and letting the costs fall where they may. But we now need to become better at engineering boats so they provide better value.” He urged a rethink “how boats are produced, and adopt the just-in-time supply chain model that has helped automakers significantly reduce costs.”
He said the days “of building product then waiting for a sale to come along are over. Suppliers need to be as quick and flexible as suppliers in the automotive industry are.”