Berowra Waters Wholesale hosts Bayliner president Jeff Behan

What are your observations on the US industry in 2011?
In the last half of 2010 we probably did see it bottom out in retail. At Bayliner in particular we had a good first part of this year and in the United States most of the recent boat Shows results were significantly ahead of where they were last year. We do believe we're outperforming the industry a litle bit, but when we look at it overall, so far this year it's a little bit up on last year. We're confident that the United States has bottomed out and is heading up, although certainly we're not seeing huge signs of recovery where there's heaps of demand, just a very steady increases.
 
Has the overall economy strengthened or has the marine industry just adapted to the smaller market?
It's a combination of things. I think one, the general economy has strengthened a little bit and people are more comfortable with the economic situation. And then the industry itself is healthier and dealers are now out there being more aggressive with advertising, trying to capture new business, so there's a different level of energy within the dealer network and when you couple that with the economic and consumer situation I think that you will see an increase in sales.

What about the Australian market?
I think the market in Australia is a bit ahead of most of the markets around the world and the United states. I think the Australian economy is outperforming most in the world and as a result consumers are generally feeling better of their situation than perhaps some of the Europeans or US consumers. I think that's translated into better results here and what we're seeing, again, is a better improvement than last year, but its still hasn't taken off in leaps and bounds.
 
What are the stronger boat segments in the US in 2011?
Since about two years ago when the big decline occurred we have seen brands like Bayliner doing relatively better because we were always a better value equation in terms of what you get for your money compared to our competitors. That has benefited us. It's so much sized based as much as it segment based in terms of which part of our markets are recovering better.
There  are some bigger boat segments that doing just fine and smaller boats segments that are doing fine. What's improved overall as been our aluminium markets. Crestliner is one of them and that has outperformed most of the industry in the united states. Then the pontoon, which isn't very prevalent down here has also outperformed the market in the states. Those two segements have probably done better than anything else, but it's not so much sized based as it is segment based.
One of the reasons the pontoon boats are doing well and why we're doing well is that consumers are looking for more versatility. In the past they may have bought a boat with a single purpose whether its  strictly a bass fishing boat or strickly water skiing. Now consumers want to one day go fishing and the next day take the family out and the pontoons do that and a lot of our boats do.
 
What is Bayliner doing in the States to protect authorised dealers in Australia from the threat of grey imports?
We're concerned about it as well. One of the things we've been very concious about is establishing high a quality dealer network across the globe and Australia is included. We want to be as sure as we can be that the people who are carrying our brands officially in the territories that they have assigned to them that their investment is protected. To do that we have to make sure that there are not violations of shipping and territory agreements. What we've done over the past year here is  be able to identify when a new boat has been shipped to different territory outside the bounds of our dealer agreements and we will take action against those offending dealers to protect the investment that the other dealers have here and elsewhere.
When we do find and can demonstrate for a fact that this sort of activity has gone on we will take action. I think what we've seen over the past four months that new boat shipping out of the United States has slowed down versus where it was a year ago. I think used boats are still coming in and that's something we have no impact on, but I believe that will also slow down also as used boat inventories become depleted in the United States. Our dealers in the US do not have a lot of used boats any more.
I think that'll slow things down here as well.
 
What effect will the drying up of used boat inventory have?
We're hopeful that this will trigger new boat sales to bounce back faster. One of the reasons used boat sales were doing well for a while was that strictly a price issue. So consumers that did want a boat, but were affected by what happened economically, in the past may have chosen a new boat, but now feel they can only afford a used boat because it carries a different price point. We think that's a major reason that used boats out performed new boats over the past two or three years. But that supply of product has really dried up so I think we'll see a more normalised relationship between new and used sales and as result we think new boat sales will rebound a little over the next few years.