Will Regional Builders Like Sunsation Fill the Production Gap?

[Matt Trulio]

Food for thought (or least a healthy argument), http://features.boats.com/boat-cont...-and-checkmate-fill-the-high-performance-gap/.

I know (OK, I've been told) that Fountain is gradually resuming production and that Donzi is building boats to order, but in the interim, I see the regional guys as playing a bigger role in the production-boat market (even though companies like Sunsation don't build "production" boats). The market is such that they could handle the volume—at least until things pick up.

 

[DollaBill]

I'm a bit confused. If there is no demand than where does a "production" mfg fit in and why is one needed?

I have another question. How many Fountain dealers are left?

 

[Matt Trulio]

Hey Bill,

There's "demand," but it's way down from where it once was. I tried to make that point in the article, as it's one of the reasons regional boat builders can probably fill it.

On the Fountain dealer question: No idea.

 

[JupiterSunsation]

Sunsation builds a great produict and has the best customer service in the industry (as in call the factory at 6 am and you can talk directly to Wayne or Joe.....Joe gives his personal cell# to anyone who needs to call him even on weekends!). They sell boats through a dealer network but are extremely hands on. I would suspect their success in slow times is a direct result of customer service, years of great customer service. Call the factory and ask about a 20 year old boat (have the hull #) and Joe will pull the file and tell you how that boat left the factory and the ownership chain if he has it.

They are introducing a 26 and a 36 this year to supplement their 28, 32 and 43 so they are expanding the line up. So new models will fill a void left by Donzi, Fountain and/or Baja for sure since they had models in that range as well.

Nortech/Outerlimits are also changing their line ups to include new models of different sizes and layouts (CC's). This outward expansion of lines will allow all builders to attract new clients and retain old ones for sure.

 

[.38Special]

Matt,

Good topic. I have two thoughts about the current boat market. Yes, I do think builders like Sunsation, Active Thunder, etc... can keep up with the current demand for new boats. However, doesn't it seem that this low supply of new boats will keep prices even higher than we have seen in the past, thus deterring customers from building a new boat? Second, I believe down the road this lack of production that we have seen for two or so years is going to greatly impact the used boat market. The supply of used boats five years from now is going to be quite a bit lower than we are used to. Which will help to keep the value of used boats up, kind of like what we've recently seen with used cars. But with the used values high, people might just spend the extra to build a new one. Just my .02

 

[JupiterSunsation]

On a different point......Sunsation has a pretty good record of moving clients up through several Sunsations. Many of their F4 owners have owned smaller Sunsations in the past. Some of the other boat builders don't have smaller models to move up from. You can take a guy out of a 25 or 28 then into a 32 but it is hard to take a guy off the dock into a 38/39 400K first boat......not saying it can't happen but it certainly won't be the norm in these "slower" times.

 

[DollaBill]

Hey Bill,

There's "demand," but it's way down from where it once was. I tried to make that point in the article, as it's one of the reasons regional boat builders can probably fill it.

On the Fountain dealer question: No idea.

Oh, I know. I saw it coming in '07. I can't believe I didnt short Brunswick. I'd be laying on a beach in Costa Rica. I saw my finance business drop by 50% in one month (august of 07).

Wait, so you're saying that the regional dealers will fill the "regional" demand? Interesting. I guess with the mfg's going factory direct that makes sense. I still can't believe the whole thing. It was impossible to even imagine the current state of the business only a few years ago.

 

[J.T.]

Maaaybe.

I doubt we'll ever see the high perf. boat
market ever get back to the kind of volume
the production builders were accustomed to.

Those production builders that survive may just turn
into "regional" builders also.

 

[DollaBill]

At BEST, we'll see 20% of the business we saw in 06. Maybe 30-40 in the "other" segments"

 

[Matt Trulio]

Oh, I know. I saw it coming in '07. I can't believe I didnt short Brunswick. I'd be laying on a beach in Costa Rica. I saw my finance business drop by 50% in one month (august of 07).

Wait, so you're saying that the regional dealers will fill the "regional" demand? Interesting. I guess with the mfg's going factory direct that makes sense. I still can't believe the whole thing. It was impossible to even imagine the current state of the business only a few years ago.

I know what you mean, Bill. The turn of events, though many of us saw it coming, remains stunning.

My hypothesis that even though former production builders will likely go factory direct and "build to order," regional builders will play a big role in filling the demand for entry-level performance boats, period. At one time, production builders filled that demand. But for the immediate future, those companies are just starting to produce again.

That's not to say that Sunsation or Active Thunder are "production builders"—far from it. But for sure, their pricing is more aggressive than that of the major production builders such as Cigarette and Outerlimits. As such, the products they build will have a greater appeal to entry-level buyers.

I submit that's why Sunsation is keeping down the price on its new 36.

 

[Offshore Ginger]

On a different point......Sunsation has a pretty good record of moving clients up through several Sunsations. Many of their F4 owners have owned smaller Sunsations in the past. Some of the other boat builders don't have smaller models to move up from. You can take a guy out of a 25 or 28 then into a 32 but it is hard to take a guy off the dock into a 38/39 400K first boat......not saying it can't happen but it certainly won't be the norm in these "slower" times.

The bottom line is if an owner of a smaller boat ( Sunsation ) cannot move is current model to move up, everything will sit idle and with that in mind as far as customer service goes , considering (sunsation) is a production boat they should offer everything and anytrhing to please there old and future clients .

 

[JupiterSunsation]

The bottom line is if an owner of a smaller boat ( Sunsation ) cannot move is current model to move up, everything will sit idle and with that in mind as far as customer service goes , considering (sunsation) is a production boat they should offer everything and anytrhing to please there old and future clients .

Not sure I agree.....Customer service should be EXCELLENT from anyone that takes your money for performance boats whether it is a 500K V or cat. You can't treat people like you are doing them a favor by cashing their check which is the attitude some of the industry titans have taken in the busy, profitable years.

The other thing about Sunsation is that the owners of older smaller boats usually have no loans on the boats and can afford to be a two boat owner or better yet sell it to someone else in the area trying to get on the water with a lower budget. When you have a title you can make a lot more decisions than when you have a payment book...... Until the F4 in 2007, they never produced a boat that had an MSRP over 250K!

Sunsation has been building boats in Michigan since 1982 and have several older boats out there that have changed hands between friends or other people in the region (Great Lakes).

 

[DollaBill]

I know what you mean, Bill. The turn of events, though many of us saw it coming, remains stunning.

My hypothesis that even though former production builders will likely go factory direct and "build to order," regional builders will play a big role in filling the demand for entry-level performance boats, period. At one time, production builders filled that demand. But for the immediate future, those companies are just starting to produce again.

That's not to say that Sunsation or Active Thunder are "production builders"—far from it. But for sure, their pricing is more aggressive than that of the major production builders such as Cigarette and Outerlimits. As such, the products they build will have a greater appeal to entry-level buyers.

I submit that's why Sunsation is keeping down the price on its new 36.

I think it's a great strategy. Obviously it means continued sales, but equally as important, it means MUCH stronger margins. Take out the dealer and you add an avg of 5-15% DIRECTLY to the bottom line. Then there is the finance juice then there is the ULTRA profitable trade profit if they decide to get into that. No question a properly run sales dept of a mfg can do very well.

 

[Offshore Ginger]

Not sure I agree.....Customer service should be EXCELLENT from anyone that takes your money for performance boats whether it is a 500K V or cat. You can't treat people like you are doing them a favor by cashing their check which is the attitude some of the industry titans have taken in the busy, profitable years.

The other thing about Sunsation is that the owners of older smaller boats usually have no loans on the boats and can afford to be a two boat owner or better yet sell it to someone else in the area trying to get on the water with a lower budget. When you have a title you can make a lot more decisions than when you have a payment book...... Until the F4 in 2007, they never produced a boat that had an MSRP over 250K!

Sunsation has been building boats in Michigan since 1982 and have several older boats out there that have changed hands between friends or other people in the region (Great Lakes).

Sorry guy what is there not to agree on as far as customer service goes considering i once worked at Skater in the past for over 12 years and have seen there ( skater) customer service excel over 100 % as far as a total re fit , from all structural repair , custom fabracation , paint & motor work ext ext .

 

[JupiterSunsation]

Sorry guy what is there not to agree on as far as customer service goes considering i once worked at Skater in the past for over 12 years and have seen there ( skater) customer service excel over 100 % as far as a total re fit , from all structural repair , custom fabracation , paint & motor work ext ext .

A. Your response borders on "Ebonics"
B. Your response may be a bit biased being an ex-employee. After all if you asked the rudest postal worker if they are providing excellent customer service they would respond "absolutely!"
C. Spend big money and any builder would provide excellent service. My point with Sunsation is they will treat you like you are buying a 500K boat even if you are calling them on a 15 year old 25 footer.
D. Skater builds an excellent product in its price bracket. This thread has nothing to do with Skater's product line or price bracket. It is asking if "regional builders" are going to take up the slack for the missing, larger volume production manufacturers?"

 

[Matt Trulio]

When I wrote, "major production builders such as Cigarette and Outerlimits" I meant major "custom builders." Nobody called me out on my mistake, so I think you guys knew what I meant and are just smarter than I am.

I have not owned a Sunsation, but I have yet to hear anyone say anything different than what Jupiter says about the company's customer service.