Market Trends: Return of the Jet Age
Major boat builders are releasing an array of new jet-powered boats
Sales of jet-powered boats fell steadily throughout the last year, partially due to Bombardier Recreational Products’ [BRP] surprising decision in late 2012 to abandon production of its Sea-Doo jet boats. Almost a year later, this past September, Sea Ray announced it would no longer enter the jet boat market after going so far as showing off prototype models to dealers and consumers. With this recent history, reasonable market observers might think this is the end of the marine industry’s nearly 60-year foray into jet technology. Logical as it may seem, they would be wrong.
Starting this year, a new wave of jet models are coming out from major manufacturers that marks a significant reinvestment into the alternative, high-performance power source that is set to shake up the entire marine industry once again.
Welcome back to the jet age.
Jet-powered boats have been around since the 1950s, but didn’t go mainstream until the big manufacturers jumped in and sales of personal watercraft and jet boats took off in the 1990s. Their allure remains the same as it always has been: thrilling acceleration, a more compact powertrain and the lack of a spinning propeller off the stern.
Yamaha and Sea-Doo were the primary players in the jet boat market until Sea-Doo’s exit in 2012. Even before Sea-Doo left the category ahead of its parent company’s initial public offering last spring, jet-powered boats have comprised a small fraction of the marine market.
Combined with personal watercraft, however, jet propulsion accounts for nearly 45 percent of the American powerboat market. According to data provided by Info-Link, annual jet boat sales have hovered between 3,300 and 4,000 since 2009. Sales declined 15.6 percent over 2012 through June of 2013 with a total of 3,396 units sold.
Even without sales growth, the last 12 months have seen an explosion in interest in the technology from major boat builders including Rec Boat Holdings, Marine Products Corporation and Sea Ray, which ultimately decided against entering the market after much speculation.
Following its departure, BRP agreed to license its jet powertrains to both Rec Boat Holdings and Marine Products Corporation, and it’s possible BRP may sell the technology to even more companies in the future.
However it plays out, the marine industry is set up for an unprecedented introduction of jet-powered boats that will shake up the market and, according to experts, will likely spur innovation to further advance the industry’s latest jet revolution.
Rec Boat Holdings leading the pack
Roch Lambert, group president at Rec Boat Holdings, has had a wild eight months since his company announced that it was entering the jet boat market with the re-launch of the Scarab brand last May.
RBH showed off its products to consumers for the first time at the Ft. Lauderdale International Boat Show in October. Three jet-powered Scarabs, as well as the Glastron GT187 had already begun rolling down the assembly line a few weeks earlier, and the first models were delivered to dealerships shortly thereafter.
Three entirely new Scarab models are all variants of the initial 195: Standard, HO and Impulse. Standard, the base model, will be powered by a 200-horsepower Rotax engine, while the HO and Impulse, the sportiest model, will be powered by 250 hp engines — all licensed from BRP.
The Impulse will include a tower and be dressed in bolder, more energetic color schemes to appeal to a young or young-at-heart demographic with names like Laser Red, Sunburst Orange and Vivid Green. The Standard and HO will both be available in black or blue colorations. Glastron’s GT187 model is a spinoff of an existing runabout design, sporting a redesigned hull to accommodate the jet propulsion system.
Lambert is particularly excited about the styling of the Scarab models. The bright colors and sharp angles take a cue from the company’s recent move toward sportier designs, as evidenced by the latest SS and RS from Four Winns and the Glastron GTS series.
Speaking about the accelerated timeline from announcement to production, he said the company “didn’t have any time for hiccups.” Lambert added that his team has been overwhelmed with the initial success of the project, namely positive reception from consumers and dealers, including MarineMax, the country’s largest dealer group, signing on as a distributor.
“There’s no question that when you have MarineMax on board it sends a huge message of credibility, not only for Scarab, but also for us as a company and management team,” he said.
Personal friends outside of business, MarineMax CEO Bill McGill was immediately interested in RBH’s jet line, and called Lambert back a few minutes after seeing Scarab renderings for the first time to arrange plans to get together to work out a deal.
Lambert suspects Sea Ray’s aborted jet plans likely assisted in encouraging MarineMax to sign on. In total, RBH has approximately 130 dealers confirmed to carry its jet products, with another 20 to 25 in the works, soon bringing its total North American dealer network to at least 150.
“Every single one of them was hand-picked, and we feel that we have probably one of the, if not the strongest, distribution network in the marine industry right now,” he said.
At Marine Products Corporation, Jim Lane and his team are busy deciding the best way to celebrate the company’s 50th anniversary. At the same time, the company has recently completed its distribution model for its upcoming push into the jet boat market.
After electing to offer its jet models to the Chaparral dealer network, Lane said the company was “overwhelmed with the number of positive responses that we got back from our dealers indicating their interest, their wish and their desire to carry the jet boat product line … we got quite a few rounds of applause from our dealers for selecting that course of action.”
Chaparral introduced its first jet boat model in December during its dealer sales training event near the company’s Nashville, Ga., headquarters that attracted more than 150 of the company’s dealers.
“We didn’t pick up any of the designs that BRP had with their product and we started with our own designs and have developed a boat that I think is going to be very well accepted in the marketplace and the reason for that is that boat will carry the Chaparral DNA, it will have the same styling, the same innovations, it’ll be a true bowrider, which is unusual in the jet boat market because many of those products have come from the personal watercraft,” Lane said. “We’ll be introducing a beautiful boat with exceptional styling as we introduce our first model and we’re planning on being in production with that boat by early January.”
The company is anticipating a total of three jet boats, 20-, 22- and 24-foot iterations, all ready for production by April. They will be named Vortex by Chaparral and, like RBH’s models, will be powered by a single and twin jet powertrains licensed from BRP.
“We’re looking at different price points, and I believe as the boat gets larger, twin power will be the choice for most of those customers,” said Lane. “What we’re trying to do is match the power to the boat so the customer has the best possible performance and he is happiest with the product.”
Chaparral expects its jet models to be priced “just as competitively as sterndrive,” and its testing has shown jet fuel economy to be similar to sterndrive in all situations, other than when running at wide-open throttle, where sterndrives carry the advantage.
“We feel like there’s great potential for growth in this market and … our dealers are projecting some very good numbers that they think they can do with the jet boat product,” he said. “I think with Sea Ray being out of the market, it only gives us a greater opportunity to market our product.”
Yamaha’s vision of family fun
With a line of 12 boats ranging from 19 to 24 feet in length, all powered exclusively with jet power, Yamaha is somewhat of an outsider in the North American marine market. After starting in the 1990s building “what were effectively big personal watercraft,” the company shifted its plan in 2000 and decided to focus on what it calls the family-fun segment.
Comprised of three traditional segments — runabouts, towable sport boats and deck boats — Yamaha sees its products like those of other mainstream boat builders. Rather than being defined by powertrain, Yamaha feels that its products instead just happen to be powered by jets — both twin- and single-jet engines.
“We could bring some previously unfound benefits in that market because of our very compact driveline, and so in 2003 we launched the first of what we call a family-fun boat, and they’ve been hugely successful,” said Yamaha WaterCraft Group President Mark Speaks. “We found a way to deliver a better product to that customer in that category and it was pretty successful, and there’s been no reason for us to change our driveline of choice.”
While the jet market has been flat, Yamaha recently completed a $3 million expansion of its jet boat manufacturing facility in Vonore, Tenn. The project included acquiring more land, a new R&D building and a new hull and deck assembly line that increased production capability by 25 percent.
As part of its expansion release last August, Scott Watkins, the company’s product planning manager, said, “Our unique approach to boat building, which includes our boats being Yamaha all the way through — the engine, the manufacturing and the dealer base, has really taken hold with customers and propelled us to the top of every size range we compete in. As a result our jet drive systems have risen to become the standard for performance, reliability and functionality from which all other family recreational boats are now measured.”
Two years ago, the company unleashed another jet investment: the Thrust Directional Enhancer [TDE], which was designed to improve the low-speed maneuverability of its boats — a frequent knock against jet boats.
“It effectively works kind of like a hydraulic steering device, almost like a hydraulic rudder in the water. The water thrust is diverted in a downward direction where it gets more traction, and it has a remarkable impact on the ability to steer a boat at low speed without having to apply more throttle,” Speaks said. “Any jet boat is very maneuverable if you’re willing to apply more throttle, but for a first-time operator we can make the whole experience better, and if we can make it even easier, all they have to do is turn the steering wheel like they do in their automobile.”
Rotax Jet Propulsion
As BRP remains in the market — minus its Sea-Doo jet boat production — the company intends to continue its investment in research and development to keep its Rotax Jet Propulsion system at the forefront of the industry.
“While we cannot comment on specific development projects, we can say that we have an R&D team dedicated to the Rotax Jet Propulsion business and that we intend to maintain our position as the technological leader in the market,” said BRP in a statement to Boating Industry.
The company sees that ongoing investment in innovation as a key selling point that has helped the Quebec-based company quickly attract interest from former competitors in the marine industry.
“The fact that we at BRP have designed the entire Rotax 4-TEC Jet Propulsion system as a system sets it apart from most other offerings,” the company said. “The Rotax 4-TEC engine was designed as a marine engine to work only with jet propulsion. We did not ‘marinize’ a car engine nor did we adapt a jet pump to work with an ‘off-the-shelf’ engine. Our entire system was designed by us to work together in the smallest possible package to maximize the available space in the boat.”
Its setup is currently the only complete line of C.A.R.B. 4-Star-rated jet systems on the market, covering its range of 150-, 200- and 250-hp jet powertrains. Each option is also available with CE certification for international markets, and the company cited the advantages of its closed-loop cooling system that keeps “raw” water from ever being inside the engine, which aids in salt water performance.
The company said its drive-by-white — Intelligent Throttle Control (iTC) — system is a significant asset that enables Cruise, Ski, ECO and Docking modes that make the system easier to use and, in some cases, more fun to drive and ride behind than comparable jet boats.
The appeal of jets
Jet aviation technology was a watershed moment in history, encapsulating the advanced technology, modernity and upward mobility that, for a time, only America could offer.
In the marine world, jets have always promised exciting performance, sharp handling and a more compact drive system that allows better access to the transom, especially important as recent usage surveys show boaters spending more time than ever parked in the water and having fun off the back of their boats.
While RBH has recently focused on making its sterndrive product more youthful, Lambert feels Scarab customers are going to take that mindset even further with its colors and design appealing to an even younger demographic.
“I think Scarab really takes it to another level where it really is not only graphics and color schemes, but the lines of the boats, the layout of the boat,” Lambert said. “It all really targets a group of people that we believe may not have considered a sterndrive boat in the past.”
The company has no plans to tell consumers that one power source is better than another, but will instead focus on the unique benefits that each propulsion system provides. For jets, that means talking about the superior acceleration, lack of a propeller, general maneuverability and the elimination of bow rise at takeoff.
With more flexibility to design a low, uncluttered transom, Scarabs will also appeal to a more active crowd regardless of age.
“You don’t buy a jet boat just to cruise around, you buy the boat to typically be more active with it and, certainly when we designed the stern area, we did that with the active family in mind without a doubt,” Lambert said.
Compared to its own existing customer base, Marine Products Corporation expects its Chaparral jet boats to appeal to enthusiasts with previous experience with jet power, likely through PWC, as well as skew somewhat younger than its other products.
“A lot of people that have used personal watercraft have become accustomed to the jet engine, and as they move into a boat some of them prefer the jet engine, some of them don’t, and I think that by offering a jet-powered product that we’re going to pick up both sides of that market,” said Lane. “Obviously some people that have had a jet move to sterndrive, but I think by having a sterndrive product and having a jet product with both carrying the Chaparral DNA, we’re going to hit both sides of that market and we’re going to be able to give the customer what they want.”
Lane likens the appeal of his coming jet boat roster to that of his company’s successfully H20 entry-level sterndrive lineup, likely attracting customers that are slightly younger. He added that his jet push aligns with the industry’s desire to bring younger people into boating.
“Certainly the goal of the National Marine Manufacturers Association has been to bring more people into boating and I believe that jet boats have brought more people into boating,” he said. “If you look at the numbers, just in 2012, the number of jet boats that were sold it was rather significant and the market share had been increasing to some degree and there was growth in that market.”
Like Chaparral, Yamaha’s research shows many people drawn to jet boats have previously experienced jet-powered watercraft, but Speaks said that has changed somewhat in the last few years.
“We find that our customers frequently have owned sterndrive- or outboard-powered boats in the past and the combination of features and benefits that come with jet drive appeal to them today,” he said.
To Yamaha, it doesn’t matter the number of boats sold that are jet drive. What is critical, Speaks said, is the number of boats sold in its self-defined family-fun grouping, including sterndrives, inboards and outboards.
“The fact that there are new companies getting into the family-fun category with jet drive product will be a good thing in that it helps take jet drive mainstream,” he said.
A new wave
As the first new wave of jet boats begin hitting the market, the impacts of this industry shift remain unclear. RBH has set ambitious sales goals for its jet lineup, with the anticipation that its jet-powered products will become a significant portion of the company’s volume and revenues within five years if not sooner.
“We have pretty aggressive targets [and] there are a lot of elements that will play a role in determining exactly how big that’s going to be,” Lambert said. “We’re ramping up new models just about every two or three months in the next year, so the full impact probably isn’t going to be seen until calendar year 2015. At that point, there’s no question that jet is going to play a very significant role in the overall revenue of our business.”
He added that within 12 months there will be a total of 8 to 10 new jet boats under the Scarab and Glastron brands, with more potentially coming in the future. When asked about the competition and the prospect of other brands jumping in, Lambert said his company is not intimidated by additional jet players, and would have made the investment regardless of Chaparral’s intentions.
So far, RBH is focused on the details of its multiple product launches, rebuilding the Scarab brand and fulfilling production orders that have already far outstripped capacity.
“I’ve launched a lot of products in my career and I don’t think I remember one that has been so unanimous in its reception with everybody that has seen it so far,” Lambert said. “We did not get into this game … because we thought that jet boats were going to boom. We just think that this is an option that we can very well master here and build a good success story out of it for our company. If you ask me today five years from now how big jet boats are going to be … I honestly don’t know. All I know is we’re very convinced that our team is going to make it a success for our company.”
As production is set to begin on Chaparral’s jet boats, Lane was reticent about his company’s sales projections. His team is preparing an aggressive marketing plan for its jet products that will coincide with the company’s 50th anniversary celebration. He is excited to show off the product to the dealers at its south Georgia facility, where they will get the chance to drive the boats as well.
“Dealers are very intuitive, and we’re anxious to see how they approve of what we’ve done,” Lane said. “I think they’re in for a very positive surprise.”
No matter what, 2014 will be a watershed moment for Marine Products Corporation as it unveils additional new models, including a 21-foot H2O and two new Robalos.
“We like to be innovative,” Lane said. “We like to offer products we know our dealers have an interest in where we can generate good market share for them and good market share for us, so our company has developed itself around very robust engineering department, and … we’ve introduced 24 models in the last 6 to 8 years and I think that’s key to any company, because one thing is always true, we know that new sells.”
As more players join its familiar niche, Yamaha remains confident about its 20-year head start in the category, and is looking forward to further competition inevitably driving both technological innovation and consumer interest.
“I’m not arrogant enough to believe that some of these new players won’t bring some new ideas to market that we haven’t thought of in the past, and I think that’s a great thing,” Speaks said. “People love new product, so the fact that Rec Boat Holdings and Chaparral are going to enter the market with some new jet-powered product means that some of the market with brand-new products are likely to gin up some interest among prospective boat buyers and we’re going to benefit from that.”