Leif Ottosson: Navico’s president and CEO

Leif Ottosson started with the Navico about 18 months ago, taking over from previous CEO, Jens-Thomas Pietralla. Before joining the marine electronics giant, Ottosson had a background in manufacturing and the IT industry. He was also involved with a private equity company and ran his own business for a number of years. “I owned my own business for 15 years and sold it about three or four years ago, and I still wanted to do something. I was doing some of consulting work until Navico asked me to come onboard and take on this role,” he told Marine Business.

Ottosson describes the challenges and significant changes within Navico during the past 18 months as the company’s organisational structure has evolved.

“For Navico, launching at least three key companies has been a major challenge. We went from 10 different technical platforms into basically one. We had five supply chain organisations, which we merged into one, we had six service organisations around the globe that needed to be merged into one, that could could handle all the brands, as one,” said Ottosson.

According to Ottosson it’s been a major challenge merging companies between New Zealand and Australia, Europe and North America. “My skill has come down to the organisation of that and making sure it can work. I’m not a specialist in the marine industry, although I’m learning a lot about it. But the challenge for Navico was not around the products or the knowledge we had in the marine industry, we had people in the company who had been working in this their whole lives – I brought something different,” he said.

Ottosson agrees the industry has been experiencing some real challenges over the past few years. “It was a major shock to the system that basically halved the industry, it halved the turnover,” he said. “So of course that had a lot of implications for some of the players and some of the players in marine electronics have been really exposed during this time. We’ve seen a lot of retrenchment, and making sure the industry as a whole is surviving, but I think coming out of this, it has been a healthy adjustment that needed to be done and I believe we will see some good things coming out of it.”

Navico reports the Australian market, during the world’s economic problems, performed exceptionally well and was probably the only place on the globe that experienced growth when other markets declined. “We were helped with the launch of the HDS, which today, I believe, is the most commonly used MFD in the world. The market here was very buoyant – you talk to anyone down here and you see that. We thought it was great year and this year has kept on getting better. We’ve also seen strong growth in the US, while Europe is lagging a little bit. We had growth in Europe but not the same type of growth as America and Australia.

The company has been gaining market share over the past 18 months on the back of its strong product launches, including HDS, Broadband Radar, and StructureScan. “If you look at what we’ve been doing over the past 18 months it has been a series of strong product launches and new technologies. We came with a our Broadband Radar technology and our StructureScan and now we are offering more features, with product integration of Sonic Hub, which we’ve done together with Fusion. It’s great, two companies from New Zealand and we’re taking the distribution worldwide with the Fusion technology and digital switching,” he said.

Navico’s hypothesis coming into 2010 was the industry had seen the worst of its economic problems. Ottosson expected the industry would have a flat year in 2010 with little change in consumer demand or increase in overall demand. “However, although that was our plan going into the year, what we have seen is a tremendous year so far. I’m not sure if that’s the industry in general? We are 30 per cent over last year. I don’t see that as a huge increase in consumer demand, but our customers are feeling a little more relaxed and bringing in more inventory,” he said.

“We as a manufacturer are benefiting from filling the channel and getting more products on the shelves. I think the confidence has come back and customers are saying that they can take on a little more risk, even though though the end consumer hasn’t been dramatically changing. We are seeing a increased demand in replacement parts. I don’t believe that boatbuilders are seeing a huge increase, but we are seeing more and more in the replacement business. People are saying: “I won’t buy another boat, but I will get new electronics on the boat” and we are benefiting from that.

Navico has seen an increase in larger screen, 8-inch and 10-inch, Lowrance and Simrad models. Customers, more than ever before, are accepting the new technologies such as Structure Scan and much of this technology is suited to the larger screens.

“I think people are getting much more used to electronics overall, we’re seeing that trend. People have already owned electronics and they understand electronics. It’s like everything else, they want a bigger TV, a new car, etc. Same with electronics, they see that they can do more and understand what they can use this technology for. And the industry getting getting more and more technology,” said Ottosson.

He also said the overall price picture is the same as the consumer electronics industry with more and more functionality for the same level of price.

Where is the future heading for marine elctroncics? Ottosson was tight lipped on exact product launches, but was enthusiastic in describing what lay ahead with product integration.  

“You will be able to run more and more foam your Multi Functional Display (MFD). We’re also looking at more external sources, for example, you could get the weather directly ... which means that you can integrate more and more information into the unit. It becomes more and more like PC – you’re connected to everything. The trend is definitely towards larger screens, and let’s be frank about it, the people who can afford it are older and probably need a bigger screen,” he said.

Navico promises the release of some pretty innovative technology in marine electronics over coming years. “We’ve only just scratched the surface with new technology and broadband technology, we’ve seen many possibilities on how we can extend that even further. That will be an exciting journey over the next three years. For us as a company we are now consolidating around these three brands and we think we have the perfect positioning around these three brands. Each one of the three key brands is complete ... what we are using in one brand can be used across the other brands. For example the Structure Scan, we are now using that in Simrad as well. We are crossing over and making sure we are changing the perception of these brands. Over the next 24 months we will probably launch more product than we have ever launched before.”