Manufacturers Find That Slower Is Better When It Comes to Marketing : BOATS : Tide Shifts From Racing Machines to Family Trade
Dale Clarke’s future is riding on a little sport boat that zips along at 50 miles an hour--tops. For Clarke, that’s low-gear. A one-time motorboat racer, Clarke owns Lavey Craft, a Southern California company whose high-powered racing boats once tore up lakes the way bulldozers rip the earth.
Lavey no longer makes those speed machines--monsters that ride like Sherman tanks and roar like an army of lawn mowers. Clarke switched gears three years ago. “We’re trying to be a family boat company,” he now says.
The phrase is echoed by other small California motorboat builders, many of whom have specialized for years in building racing boats. Now workmen who used to produce just a few custom racing boats each year are turning out dozens of smaller, slower and less-expensive sport runabouts.
In doing so, these small companies hope to capture a share of the highly competitive family market that is dominated by such giants as Bayliner Marine, Sea Ray and Murray-Chris Craft, all based outside of California.
Olga E. Badillo, editor of respected Boating Industry magazine, published in New York, maintains that “there is room for both.” The smaller companies will flourish, she said, if “they stick to their niche--generally those customers who pay extra for extra styling or performance.”
It’s not clear how many companies build racing boats because most firms are small and privately owned and operate out of cramped warehouses and sometimes even family garages. There are about two dozen well-known race boat manufacturers located primarily in Southern California which industry sources say comprise the backbone of the industry.
The small California boat companies are changing course at an ideal time. The motorboat market--which includes fishing boats, ski boats, runabouts, cruisers and racing boats--has recovered from a severe recessionary slump and is now quite healthy. Boating industry executives say that today’s buyers are looking for boats with style and zip--precisely what the California race boat companies claim to offer.
Lavey Craft, and other similar boat companies, would like to avoid the fate of California’s sailboat industry, which has all but disappeared due to increased costs and a dramatic drop in sales.
The powerboat makers have good reason to broaden their appeal. Speeds of more than 35 miles an hour are outlawed on most large California lakes and the same restrictions exist in many other states. A number of major insurance companies will not insure boats that travel faster than 45 m.p.h. because “the potential for accidents is much greater,” said a spokesman for Cigna, one of the world’s largest marine insurers.
Although there are no figures available indicating the size of the race boat market, it is, by all accounts, extremely small. And, for a variety of reasons, independent boat dealers do not sell race boats.
Liability Problems
Garden Grove motorboat dealer Ken Kuklish said he cannot sell enough race boats to justify the floor space in his showroom. Additionally, the boats can create “great liability problems” for dealers if they break down, Kuklish said.
California’s race boat companies are hardly a major economic force--they produce only a few thousand boats each year--but their influence on the industry is vast. The small, family-owned boat shops located in the state are regarded as “the leaders in exotic styling--miles ahead of anybody else,” champion motorboat racer Bob Nordskog said.
Nordskog and others attribute this leadership to California’s legendary free-and-easy life style. Race boats offer “freedom and adventure,” said Larry Smith, a boat designer for Sarasota, Fla.-based Wellcraft Marine. “They are very California-type boats.”
Ron Spindler, owner of Schiada Boats, a Gardena builder of race boats, recited the elements of the legend: “fast money, fast cars, fast boats.” Indeed, the industry’s devil-may-care image is, to no small degree, enhanced by the boat company owners’ fuel-injected personal style--a number of them race airplanes, boats, cars and motorcycles. The business “tends to attract people who are a little eccentric,” said a salesman for one of the leading race boat makers.
The family boats of the type now being offered by Lavey and others--though fancy by the standards of the motorboat industry--do not quite live up to the legend. Ice chests and tasteful cushioned seats have replaced horsepower and chrome.
Stylish Dinosaurs
Lavey’s Clarke says this evolution sadly reminds him of the stylish dinosaurs of the automobile industry--the Stutz Bearcats, the Duesenbergs. “I think that’s the way cars are supposed to be. But look--we’re all stuck with Fords and Chevys.”
Nordskog acknowledged, however, that California’s race boat makers “have got to widen their markets” to include family boaters. “That’s their salvation. The smart ones are doing it. The others won’t survive,” said Nordskog, who also publishes the respected Powerboat magazine in Van Nuys.
Take Sanger Boat. Until the late 1970s, it turned out just a few dozen chrome-plated drag boats each year. The thundering 200-m.p.h. bullets earned the Fresno company many awards and recognition as one of the world’s leading manufacturers of race boats. But what Sanger did not make much of was money.
In 1979, owner Jack Davidson--a maverick who once tried to buy a competitor’s company after losing a race--yanked Sanger from the racing circuit and retreated to the drafting table. What emerged was a line of sport runabouts, notable for their subdued colors and 45 m.p.h. top speeds.
“Jack decided to stop playing and make some money,” Ronald Oliver, the company’s sales manager, said in a recent interview. Now, 95% of the 200 boats that Sanger makes each year are designed for pleasure, not racing. The company returned to racing last year but general manager Fred Eadie insists, “This is a family boat company.”
Demographic Shift
A demographic shift now appears to favor companies that make sport runabouts. Boat company executives say the post-World War II baby boomers, now in their mid-30s and married with young children, want family boats that are neatly styled and quick.
As a result, the race boat companies have replaced macho designs and high-performance engines with tasteful, padded seats, mellow paint jobs and somewhat less power--targeting “someone who wants to go fast and doesn’t want his wife to know it,” said Jeff Scher, general manager for Schiada Boats.
This trend hasn’t escaped the notice of the traditional family boat companies. Bayliner of Seattle, Sea Ray of Nashville, Tenn., and Murray-Chris Craft of Bradenton, Fla., have each introduced sport runabouts.
The new boats are an effort to win over “the up-and-coming yuppie crowd that’s looking for excitement,” said Gary McCloud, a marketing executive for Sea Ray. George E. Sullivan, marketing vice president for Bayliner, expects the market for sport runabouts to grow as water skiing continues to gain in popularity.
As a result, family boat makers are producing faster boats and race boat companies are producing slower boats. However, Bayliner said its no-frills, 14-foot sport runabout is not in direct competition with the more stylish boats produced by California’s race boat companies. “It’s not the same market,” Sullivan said.
More vulnerable to the big companies’ competition are the small California boat builders--such as Galaxie--that cater strictly to the family market. Most family boat companies are located in the East.
Remodeled Boat Line
Galaxie, a Westminster boat company, recently remodeled its boat line, expanded production to 600 boats yearly and spent $100,000 to establishing three dealerships to compete with such giants as Bayliner. “The competition is getting tougher,” said Bill Bonnaurd, marketing director for privately owned Galaxie. “We decided we had to mount a professional counterattack.”
Heightening the competition even further for the California manufacturers, large regional boat makers in other parts of the country are looking West. Cigarette, a Miami company that has its roots in ocean racing, plans to expand its 16-dealer chain to California next year.
For now, most race boat companies view the marketing efforts by the boating giants as helpful for the industry in general. The race boat featured on the popular television series “Miami Vice” has “popularized high-performance boating,” Scher of Schiada Boats said, and Wellcraft, the builder of the craft, is promoting a version of it as a family sport runabout.
The growing popularity of sport runabouts buoys the hopes of the motorboat industry, whose fortunes seem to rise and fall with economic tides.
Domestic motorboat makers limped through the recession of the late 1970s and early 1980s, as sky-high interest rates and high gasoline prices kept many buyers out of the market. Many small companies that made motorboats closed their doors and the industry’s giants were also badly hurt.
Bayliner Marine watched its production slip by more than half to 4,000 boats in 1981 from 8,500 in 1978. By 1982, motorboat sales had plummeted nearly 30%. “The market collapsed,” said Jack Turner, publisher of Soundings magazine, published in Essex, Conn.
Decline in Manufacturers
Makers of race boats--the gas guzzlers of boating--were especially hurt by high fuel prices. In California--”the heart and soul” of race boating, according to Powerboat magazine editor Mark Spencer--the number of manufacturers has declined by 80% over the last eight to 10 years.
A welcome upswing in the economy arrived in 1983, saving what remained of the California motorboat industry. Lower interest rates and stable gasoline prices fueled two years of explosive sales growth, as thousands of buyers who had postponed boat purchases stormed the market. Nationwide, the number of motorboats sold leaped 21% in 1983 and again in 1984. There are no separate figures available for California.
The buying frenzy now appears to be over. Last year, powerboat sales nationwide dipped slightly to 436,700 from 440,280 in 1984. The “stupendous gains couldn’t last,” Badillo of Boating Industry magazine said. She expects “good but not spectacular” growth in 1986.
And, as far as many race boat makers are concerned, good is good enough. Consider Lavey Craft, which is on the verge of its first profitable year since 1978. Founded in Alex Lavey’s garage in Pico Rivera in the early 1950s, the company at first painstakingly produced no more than a few dozen custom race boats a year. In 1974, its so-called muscle machines swept the American Power Boat Assn.’s runabout competition.
When Clarke, a computer equipment salesman, acquired the company four years later, it had, he recalls, “no dealers, no product, no market.” The nationwide recession and gasoline crunch discouraged new boat buyers and forced dozens of small powerboat companies out of business. Clarke, who expected the small company to squeak through the lean years on Lavey’s reputation, was “shocked to discover the company was unknown outside Los Angeles County.”
‘Unbelieveably Competitive’
He recalls that he thought life would be a whirl of “water ski trips, boat tests, women and cocktails” but instead found the business to be “unbelievably competitive” and quickly learned to swim in red ink. As a result, he decided that racing was out, families were in.
And now he expects the company to make money for the first time this year, led by its 14-foot, under-$10,000 sport runabout that, he says, he can “turn out like popcorn.”
Like Sanger, Lavey Craft has crept back into racing, this time with a new racing craft “that satisfies my ego,” Clarke said. But make no mistake, he insisted, “We will become known as a family boat company.”
