Boat industry needs to ‘rethink how boats are made’ says McCoy in METS keynote
Brunswick Corporation CEO Dusty McCoy identified four areas in which the boating industry must improve during his keynote presentation to kick off the 26th Marine Equipment Trade Show (METS), held this week in Amsterdam. Above all else, he said, it must hold the line on retail pricing.
“We surveyed 50,000 boating consumers – current boaters, former boaters and future boaters – in the United States, Canada, Europe and Brazil. And we learned a striking fact. It is not important for us to sell boating as an attractive lifestyle. People get that. They know that boating is fun, and they know that boating is a pastime that brings families together. What they’re having trouble with, however, is balancing the benefits of boating with the costs of boating,” said McCoy. “If we look at real market pricing, the cost of new boats is rising dramatically faster than the rate of inflation.”
The answer, he said, is for the entire industry to rethink how boats and their various components are made, pointing to the auto industry as an example. New cars include numerous features and refinements not found on older vehicles, McCoy noted, while manufacturers have managed to hold retail price levels at a more consistent level while protecting operating margins. “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.”
McCoy said, the boat industry needs to rethink how boats are produced, and adopt the just-in-time supply chain model that has helped automakers significantly reduce costs. He identified supplier flexibility and speed as a key requirement for this to take place, along with ensuring all partners within a given supply chain have sufficient operational capacity. “Nobody wants to carry inventory today – dealers don’t want to have money tied up in it, nor do distributors, manufacturers or anyone else in the supply chain. But we all need inventory, and we all need to be able to supply it faster than ever. 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.”