Business Case For Retrofit of Sea Ray Yachts

ttmott

PhD in OCD
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TECHNICAL Contributor
Apr 3, 2012
8,022
Space Coast Florida
Boat Info
2006 52 Sedan Bridge
Engines
Cummins QSM11
In the SR yachts ranging between 2000 and 2008 and between 40 and 65 feet there seems to possibly be a market / desire to host a complete retrofit of these hulls including new engines and drives, electronics, cabinetry and systems. With the price point of new boats feasibility is promising. There is a high desirability for the hull designs in these year and size ranges. So, in my case for example (2006 52DB) a complete retrofit could be accomplished in the range of $400K which puts the boat in the $1.2M market with all of the burdens. Comparable new boats of this size and style are now in the range of $1.9M to $2.3M. Issues would obviously be in financing and insurance for potential owners so a way to modify (maybe) the HIN to indicate a new boat would need to happen.

Thoughts?
Tom
 
you lost me at modifying a hin.....and id think long and hard about putting that kind of dough into a 52db.....viking or similar would make more sense
 
I'm a little confused as well. It would appear that you are implying that a restored boat upgraded with modern systems would be competitive in the new boat market. I believe that most buyers expect a boat to be properly maintained and upgraded as required. Even if you stripped the boat down to its hull and rebuilt it completely....it still is an old hull and the HIN wouldn't change (I'm pretty sure that DOT and the Coast Guard would nix that idea).

I have seen complete rebuilds done on Vikings and more recently with Bertrams but it usually is the owner footing the bill. I would speculate that a market for what some would call "Factory Restored" would be a very small niche.....but it is an interesting idea.
 
I'm not sure if this is done elsewhere in the country but in FL, cars that get refurbished, receive a a rebuilt title from the DMV. It has a different color than a standard title, which denotes that it was at one point totaled, and then rebuilt. Maybe you could do something like that to show it was refurbished.

There is no quality guarantee with a rebuilt title vehicle, it's totally buyer beware, so you'd have to come up with a way to assure quality to the new buyer.

There's a guy here that does this with smaller boats in the 30 foot range. Almost like flipping a house. He tried to do it with a 80's Sundancer but wanted the buyer to sign a contract guaranteeing the sale once completed. His post was on Craigslist a long time, I'm not sure he ever got anyone.
 
I would think for minions, like myself, trying to secure a $1.2M loan for a 19 year old boat that appraises at 400k might be tricky, versus getting the loan for the same amount on a 2019 model with a better interest rate to boot.
 
What makes those years and those hulls so appealing?

It strikes me that they're not old enough to have the vintage styling appeal of something like a Chris-Craft Commander yet are recent enough to suffer in comparison to contemporary boats offering either newer materials or designs.
 
Why is this sounding familiar? Did Sea Ray investigate interest in this a while back? I definitely remember something like this. Maybe it was just a certified used program and not a retrofit.
 
What makes those years and those hulls so appealing?

It strikes me that they're not old enough to have the vintage styling appeal of something like a Chris-Craft Commander yet are recent enough to suffer in comparison to contemporary boats offering either newer materials or designs.
I think we would find these years have the most appealing lines; now that's subjective but probably generically true. From a hull perspective these hulls perform on par with the latest hulls sans step configurations. The prop pockets and increased beam make these hulls very desirable. In these years SR moved away from cored construction below the water line which makes the assemblies good candidates for a marketable retrofit. The down side is the cost of new boats and the demise of SR's yacht manufacturing will pull good retrofit candidates from the market.
We have a plant and workforce that will soon become available (in part or whole) which brings economic benefits to the concept and community.
 
Why is this sounding familiar? Did Sea Ray investigate interest in this a while back? I definitely remember something like this. Maybe it was just a certified used program and not a retrofit.

Yes.......your memory is correct. It was in 2008-2009 when the industry was in the dumper and nobody was buying new boats. In fact, CSR was used as a sounding board to help formulate the plan that was then submitted to mgt. The goal at that time was to take in customer owned boats, and refurbish interiors, correct any mechanical problems, and repair any gelcoat issues or paint faded colored gelcoat, soda blast the bottom and repaint it. There was some interest, however transportation back to the factory and the return to the customer added significantly to the cost and Brunswick legal department didn't want to accept the liability for a customers boats in transit and at the factory. The plan was dropped after one presentation to mgt, who happened to be Rob Parmentier at the time.
 
Yes.......your memory is correct. It was in 2008-2009 when the industry was in the dumper and nobody was buying new boats. In fact, CSR was used as a sounding board to help formulate the plan that was then submitted to mgt. The goal at that time was to take in customer owned boats, and refurbish interiors, correct any mechanical problems, and repair any gelcoat issues or paint faded colored gelcoat, soda blast the bottom and repaint it. There was some interest, however transportation back to the factory and the return to the customer added significantly to the cost and Brunswick legal department didn't want to accept the liability for a customers boats in transit and at the factory. The plan was dropped after one presentation to mgt, who happened to be Rob Parmentier at the time.

It makes you wonder if they could have made a "mobile" refurbishment facility that could be taken to regional locations to cut the costs and risks associated with boat transport. Rent empty warehouse space or even erect a large tent as a temporary workshop. Of course you'd still have to house, feed, etc, the workers, so maybe it wouldn't save any money, but it seems like an interesting business concept.
 
I saw a post awhile back on YachtWotld, someone took a 2003 Carver and completely refurbished it. asking price was 279k for a 40’ sedan bridge type boat that appeared brand new. Looked great and the price was right, finally sold, but it was removed from YachtWorld, and then added back at 299k, appears to have sold a few weeks later. New engines, new paint job, new interior, new canvas, new electronics, new vinyl, new appliances, no way they spent less than 250k, I think they had so much invested and it did not pan out the way they wanted, so sold instead. Definitely was not meant to be refurbished and sold, not sure of the original intent. I know it was on YW for at least 6 months at that price.
 
I saw a post awhile back on YachtWotld, someone took a 2003 Carver and completely refurbished it. asking price was 279k for a 40’ sedan bridge type boat that appeared brand new. Looked great and the price was right, finally sold, but it was removed from YachtWorld, and then added back at 299k, appears to have sold a few weeks later. New engines, new paint job, new interior, new canvas, new electronics, new vinyl, new appliances, no way they spent less than 250k, I think they had so much invested and it did not pan out the way they wanted, so sold instead. Definitely was not meant to be refurbished and sold, not sure of the original intent. I know it was on YW for at least 6 months at that price.

$250k seems like it would buy you a lot of refurb services. 60% spent on labor is 1000 man-hours of labor @ $150/hr. It leaves you $100,000 for materials.

A 40 ft. sedan bridge in like-new condition for $300,000 seems a bargain, especially after reading the Boating magazine review of the 40 Fly which comes in around $900,000.
 
$250k seems like it would buy you a lot of refurb services. 60% spent on labor is 1000 man-hours of labor @ $150/hr. It leaves you $100,000 for materials.

A 40 ft. sedan bridge in like-new condition for $300,000 seems a bargain, especially after reading the Boating magazine review of the 40 Fly which comes in around $900,000.

Had I not already purchased a boat, AND could get that one for 250, AND I could afford the slip/maintenance/etc, I would have tried to convince the wife to get that boat. Of course, none of those statements are true, so back to my 320 (which I love, so there is that!)
 
I don't think the HIN really moves the needle for alot of people, so let's put that to the side for the moment. I think for some buyers the idea of getting factory retrofit of engines, systems, and electronics would be really attractive, especially since these can see disproportionate wear and aging in some geographies, compared to the hull, furnishings, and fixtures. Especially if Sea Ray offered these in a modular manner (engines but not electronics, for example) and if they did them through the factory rather than, or in addition to dealers, and if they offered a strong factory warranty, this might be an attractive path for some people.

Early in our search for our current boat I was looking at 37's with the 7.4 Mercs. That generation engine had some well-documented water ingestion issues with certain years and models. I spent some time with Mercruiser on the phone exploring their factory retrofit options for replacing engines. I didn't end up going that direction, but had I found a good value on a boat with older engines, and could get current model Mercruiser factory retrofit, that might be pretty attractive.
 
The baseline for this would be specifically V-Drive and Straight-Drive boats updated with the latest in gears and engines (diesel only).
New generators, electrical, bonding, bronze, etc.
In other words a new boat with full warrantee.
Essentially we start with a solid stripped hull and go from there.
 
I fear all roads end up in the same place. '

If Sea Ray decided to sell "Upgrade/Refit packages" for propulsion and interiors the first question is "Who is handling the install?". It isn't going to be Sea Ray which means some sort of Certification program.

I'm sure MarineMax would jump at the opportunity to talk to an owner about a Sea Ray Upgrade/Refit package and then promptly talk them out of it and into buying another boat.

You have to consider how to economically motivate the sales/service channels and educate boat owners for them to have a viable refit business.

I could see Brunswick offering more defined propulsion packages which they do through Mercruiser dealers. But they will have business issues offering transmissions and diesels for boats they no longer make. They would have to get that sorted out and worse...... the liability that goes along with it.
 
I fear all roads end up in the same place. '

If Sea Ray decided to sell "Upgrade/Refit packages" for propulsion and interiors the first question is "Who is handling the install?". It isn't going to be Sea Ray which means some sort of Certification program.

I'm sure MarineMax would jump at the opportunity to talk to an owner about a Sea Ray Upgrade/Refit package and then promptly talk them out of it and into buying another boat.

You have to consider how to economically motivate the sales/service channels and educate boat owners for them to have a viable refit business.

I could see Brunswick offering more defined propulsion packages which they do through Mercruiser dealers. But they will have business issues offering transmissions and diesels for boats they no longer make. They would have to get that sorted out and worse...... the liability that goes along with it.
I don't think we are talking about Brunswick or MarineMax being involved. Doesn't fit their business plan.
 
I don't think we are talking about Brunswick or MarineMax being involved. Doesn't fit their business plan.
Just my two cents... The cost of the business overhead, labor, materials, would be very high. Just the costs with facility rental, utilities, taxes, would be cost prohibitive. You would have to refurbish a lot of boats to make the cost nut.... But.... It would be fun...
 
A complete factory refit might be more involved and labor intensive than building a new boat once you start doing all the mechanical, electrical, electronics, fresh water system, waste system, interior surfaces, flooring, cockpit, canvas, fiberglass repair, bottom stripping, etc..
Lamborghini offers this service for their cars that are older than either 10 or 15 years old. I think the drawback is that it cost as much or more for them to do it as a new Lamborghini would cost. The difference is that in some cases a factory restored vintage Lamborghini is worth more than a new one.
 
A complete factory refit might be more involved and labor intensive than building a new boat once you start doing all the mechanical, electrical, electronics, fresh water system, waste system, interior surfaces, flooring, cockpit, canvas, fiberglass repair, bottom stripping, etc..

Why not an ala carte menu where you can pick what you want?

I think in a lot of cases people will be happy with one or more aspects of their boat, but be interested in refitting some other element. Interior/cockpit cosmetics fine, but want new propulsion, engine controls and navigation electronics. Or the other way around, totally happy with propulsion but sick of an interior that looks like a 1980s porn set.

I would expect most work to come down to a "partial refit" and potentially more economically viable if you had a refit company that was geared up for this kind of work, some halfway point between "boat repair" and "boat factory".
 

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