Q&A: GE Capital’s Bruce Van Wagoner on today’s marine industry, Part II
As part of a recurring series where Boating Industry interviews industry leaders, we recently sat down with Bruce Van Wagoner, president of the marine group at GE Capital Commercial Distribution Finance. The following is part two of our interview with Van Wagoner. Part I of the Q&A is available here.
Do you think the pontoon, aluminum and ski segments that were successful in 2012 have potential to grow more going forward?
When you look at the demographics with those segments, there is room for more growth as more people come into the industry. To new customers, these segments are very appealing.
With pontoon boats, manufacturers are spending a lot to create an appealing market – a lot more research and development is going into pontoons. Therefore, it has brought the market to another stage. At the dealer shows I have been to, I saw a lot of pontoons that are well positioned, and customers are taking a lot of time to look at those new products.
Speaking of boat shows, how has the start of the boat show season been?
Talking to our reps across the country, there are ups and downs. But overall, there is a lot of good investment in boat shows, meaning they are getting customers out and gaining visibility in the marketplace. Those I have talked to have been relatively pleased with what has happened so far.
Of those dealers that have successfully kept inventory turns up, what characteristics are you seeing that have helped them do so?
Of the dealers who are turning their inventory a minimum of two times, they are really healthy and keeping a nice bottom line. But if those turns become too high it is likely they are missing some sales. The real critical factor — and one thing that we have to work a little harder at — is getting a better understanding of what that ideal turn number is.
Frankly, it has to do with the manufacturer’s ability to fill orders on a timely basis. Some of the best practices for that are when the dealer and manufacturer align on stocking and product availability, as well as their willingness to move product from dealer to dealer for urgent sales when they can't get the product right away.
What is the status of the pre-owned boat market?
It is hard for dealers to get their hands on good, pre-owned product. Dealers are trying options like going to auction and going back to consumers who were previous buyers.
But thinking about the reduction in the amount of new boats being built over the last five years, there is a natural reduction in the number of new units that are eventually available as pre-owned. That is a good thing for new boat sales, but it does make it a little more challenging to get their hands on a good pre-owned boats.
Like with its recent contribution to Grow Boating’s Five Star Dealer Certification Program, why has GE Capital invested in such industry-wide initiatives?
Quite a number of years ago when they did the original Grow Boating meetings, which were facilitated with a little help from GE Capital, they were attended by the leadership of most of the key manufacturers, dealers and industry suppliers. The group came to the conclusion that the most critical factor of growing boating was to improve the consumer’s perception of the experience. A lot of people came in and went out of boating because they had a bad experience.
It came to down to how do we improve the way service was getting taken care of, the sales process, product performance, as well as the promotion of the industry. Part of that was with Five Star Dealer Certification.
There has been a lot of investment by GE Capital through white papers, through Boating Industry magazine, the Top 100 Dealers program and events that we sponsor, such as the upcoming Miami Boat Show event that we do. Also, with the 20 groups around the industry, a lot of best practices are being shared.
The industry has come a long way on building on the successes seen by some dealers and not repeating those mistakes made by others in the past. Frankly, we invest because profitable dealers are healthy dealers and those dealers are better GE Capital customers.