Boat Buyers Showing New Wave of Interest
Boat makers and sellers are pinning their fortunes this year on the lure of radical new hull designs and super-fast engines, which many will show off at the 41st annual Southern California Boat Show opening today in downtown Los Angeles.
The once-sinking industry has been buoyed in recent years on the rising tide of the economic recovery and the repeal of a punishing luxury tax. Last year alone, 60,000 boats were sold in California, a 42% increase from 1991 when sales were devastated by the new, 10% luxury tax, since repealed.
Today, manufacturers are investing in new designs and systems to attract an increasingly sophisticated buyer.
“All of these builders have invested in totally new hulls and decks,” said Spike Harvey, executive director of the Southern California Marine Assn. “It’s very expensive to build a set of molds, so if they’re going to invest $150,000, the money must be coming from somewhere.” The pickup in sales is welcome news. The 1990 tax, which was levied on boats and airplanes with price tags of more than $100,000, had a long-term negative effect on sales. Even though many boats were priced under $100,000, the public thought otherwise.
“There was so much publicity on [the tax] that everyone thought it affected every boat,” said Irwin L. Jacobs, chairman of Minneapolis-based Genmar Inc. and the one-time corporate raider. “No matter what you told them, they didn’t believe you. I think it tipped our industry upside down, badly.”
Once the tax was repealed in 1993--and the economy stabilized--manufacturers found themselves facing newer, savvier consumers. Family boats account for 85% of sales these days, and buyers know exactly what they want.
“Customers take more time,” said Kip Ashton of Ultimate Custom Boats, a manufacturer in Anaheim. “I might cultivate a customer up to a year or two--and they’re very savvy about what they’re buying.”
With the popularity of ski and power boats, more manufacturers are working to fill niche markets the larger manufacturers can’t efficiently supply.
“We are a niche market, into larger, quality, high-performance boats,” said Jim Foley, manager of Eliminator Boats, a Mira Loma-based manufacturer. “Since there are so many boats at the lakes, the waters are a lot rougher, and our customers need larger boats.”
The industry is looking forward, cautiously, to clear sailing as the boat show, which runs Saturday through Feb. 9 at the Los Angeles Convention Center, gets underway.
“We thought 10 years ago that we’d be working a four-day workweek,” said Harvey. “Now we’re just trying to sell the sizzle, to maintain our share of the recreational market.”
