Brunswick selling off Sea Ray brand

IDK, I think it's a good day for SR. Now have a little certainty. They dominate the market they are sticking with. Sux for the 825 jobs, but let's see how it plays out. May be a chance that some rich guy might come in and take that plant off their hands and builds yachts. It's a weird world out there. While my marina is still half empty, others nearby are full, and there are hardly any used boats to be found.
 
Labor, its not like the Euro boats are 3rd world countries. Like all skilled laborers they get paid and I am sure have unions and benefits. ...Sorry for the rant all, just really unhappy with this news.

Right! I don't have sales numbers to back up my opinion, but I have noticed that SeaRay has given-up on competing against French boats!
 
IDK, I think it's a good day for SR. Now have a little certainty.

Feels different to me. My Cruisers and Carver buddies are already making remarks about it. 825 jobs... more and more ugly, cheap imports at the dock, each representing a mountain of cash leaving the country...
 
IDK, I think it's a good day for SR. Now have a little certainty. They dominate the market they are sticking with. Sux for the 825 jobs, but let's see how it plays out. May be a chance that some rich guy might come in and take that plant off their hands and builds yachts. It's a weird world out there. While my marina is still half empty, others nearby are full, and there are hardly any used boats to be found.

thank you....I thought I was the only one feeling like this as well and started to feel guilty....I always hate to see job loses.....but on the positive side we will still have the excellent customer service at Sea Ray for all the boats they have made and will make and we will still have availability of parts for the boats they continue to support....

I see it as good news and bad news....

cliff
 
Don't know the specifics, but guessing the margins on 40 plus foot boats can't support the fixed cost plus the necessary investments. How many 40 plus foot boats do they sell now-a-days?

Also guessing the market is unwilling to pay more for a Sea Ray than say a Prestige or Galeon. Market views the extra quality/finishes aren't worth the extra $$

Maybe Sea Ray is like what Apple was before the iPod. Superior product, but the market just isn't there
 
Don't know the specifics, but guessing the margins on 40 plus foot boats can't support the fixed cost plus the necessary investments. How many 40 plus foot boats do they sell now-a-days?

Also guessing the market is unwilling to pay more for a Sea Ray than say a Prestige or Galeon. Market views the extra quality/finishes aren't worth the extra $$

Maybe Sea Ray is like what Apple was before the iPod. Superior product, but the market just isn't there
I think this is part of it. Sea Ray is a top quality brand. But it is still closer to Ford/Chevy/Chrysler/Honda/Toyota than say Lincoln, Caddy, Acura, Lexus, etc. I was at the Chrysler Jeep deal the other day and they had the Jeep SRT in the show room. Certainly, a nice truck. I liked it a lot. But I would never spend $80,000 on a "Jeep." :)
 
Who sells Sea Rays:

"MarineMax is the largest retailer of Sea Ray boats in the world, historically representing over 50% of Sea Ray’s world-wide sales. The Sea Ray brand accounted for approximately 23% of MarineMax’s fiscal 2017 revenue. Sea Ray’s sport yacht and yacht division represented less than 10% of MarineMax’s rolling 12-month revenue in the period ending March 31, 2018."

So why is MarineMax doing great?

"Over the years, we have diversified our product offerings by adding complementary products and manufacturers, such that the sales of Sea Ray sport yachts and yachts as a percentage of our business declined to less than 10% on a rolling 12-month basis through March 2018. Brands such as Azimut, Galeon, Aquila and Ocean Alexander, have all been growing well and taking market share."

Brunswick management, in my opinion, failed. You cannot allow a company that you do not control/own to be responsible for more than 50% of your Sales revenue. It is only a matter of time before they sign deals with other suppliers and "upgrade" your customers to other Brands. Sea Ray had no chance at the luxury market when the salesman at MarineMax are getting Azimut commissions.

Brunswick management, has surrendered to MarineMax. Sea Ray must stay in the lane MarineMax dictates making boats between 24' and 40'. That gives MarineMax the ability to sell other brands above 40'. That is a major win for the other brands and MarineMax.

I would fire Sea Ray's entire top management team and build a much stronger direct channel to their current and prospective customers.
 
Who sells Sea Rays:

"MarineMax is the largest retailer of Sea Ray boats in the world, historically representing over 50% of Sea Ray’s world-wide sales. The Sea Ray brand accounted for approximately 23% of MarineMax’s fiscal 2017 revenue. Sea Ray’s sport yacht and yacht division represented less than 10% of MarineMax’s rolling 12-month revenue in the period ending March 31, 2018."

So why is MarineMax doing great?

"Over the years, we have diversified our product offerings by adding complementary products and manufacturers, such that the sales of Sea Ray sport yachts and yachts as a percentage of our business declined to less than 10% on a rolling 12-month basis through March 2018. Brands such as Azimut, Galeon, Aquila and Ocean Alexander, have all been growing well and taking market share."

Brunswick management, in my opinion, failed. You cannot allow a company that you do not control/own to be responsible for more than 50% of your Sales revenue. It is only a matter of time before they sign deals with other suppliers and "upgrade" your customers to other Brands. Sea Ray had no chance at the luxury market when the salesman at MarineMax are getting Azimut commissions.

Brunswick management, has surrendered to MarineMax. Sea Ray must stay in the lane MarineMax dictates making boats between 24' and 40'. That gives MarineMax the ability to sell other brands above 40'. That is a major win for the other brands and MarineMax.

I would fire Sea Ray's entire top management team and build a much stronger direct channel to their current and prospective customers.

Bingo!! you cant have 1 large customer that sells other competing Brands. and they are pushing the Galeon!! I agree its all management....what type of business plan is that? Pull the brand from MM and partner with smaller privately owned retailers that give a $hit about product. you fix service and sales at the same time. Tiara and Cruisers are doing it!!
 
What are everyone's thoughts on what this news does to the value of used Sea Rays, especially the models that are similar to the models that are now targeted for extinction?

If we have to pick an alternate brand, Aquila also offers a few nice models to consider after you win the lottery.
 
Brunswick management, has surrendered to MarineMax. Sea Ray must stay in the lane MarineMax dictates making boats between 24' and 40'. That gives MarineMax the ability to sell other brands above 40'. That is a major win for the other brands and MarineMax.

I would fire Sea Ray's entire top management team and build a much stronger direct channel to their current and prospective customers.

It's much more than that, though, it's their own slavish devotion to other Brunswick divisions like Mercury Marine. After the hull, the most expensive component in the boat is the engine. Sea Ray can't really innovate on power plants when they have to use Mercury power, and why should Mercury innovate *cough*raw water pumps*cough* when they have captured brands like Sea Ray?

This kind of insiderism sounds like a good idea to Brunswick execs -- get 'em coming *and* going -- but really it's as toxic to a business as Planned Economies are to economics. Sea Ray *can't* cut costs by forcing competition among power vendors or even innovate designs much because they're stuck with Mercury power, and Mercury keeps slapping their parts on GM short blocks because Sea Ray can't choose anyone else.

Yamaha sells a ton of jet boats these days -- when I got my SX-190 in 2013, we were the only one in the marina. Now there are 5 and I see them constantly and the owners all say they love the low maintenance compared to I/O. No way you'll see a jet drive on a Sea Ray because the only vendor with a proven design at realistic prices is Yamaha. (Yes, there is Hamilton, but now you're at Hinckley prices).
 
GM bailed on Pontiac. Sounds like they are eyeing Buick. Ford is bailing on their Sedans and going to build only trucks and mustangs. If Lincoln doesn't turn a profit I look for it to go. Chrysler, well..Fiat..nuff said. Blame it on management if you will it doesn't change anything. Capitalism is not fair but Ill bet dollars to dimes that in ten years we can look back at this and say good things happened. Business does not change until the pain/fear is great enough. Now I just need to figure out what I'm going to buy the Admiral and stay within budget..
 
A few things I've taken from all this...
1) Big boats aren't selling ("the market for Sport Yachts has materially weakened vs our expectations")
2) Don't make as much profit off big boats as we do little boats. ("lower return on invested capital versus other opportunities within the marine portfolio")
3) Soon the, you know what, will hit the fan..("more cyclical segment of the boat industry")
4) The biggest retail seller of SR's (Marine Max) has branched out into selling other yachts instead of just SR/Meridian.
5) Mercury Marine! We don't provide marine propulsion to big boats, but we do to smaller ones. ("our Marine position is a Unique Advantage. Each engine sold establishishes a 20 year P&A annuity")
My feeling is number 5 alone is the main reason. Smaller boats with outboard power is the growing market. Like it or not.
Mercury is the leader in that area and Brunswick owns Mercury.
 
I’m quick to jump on the Merc-bashing bandwagon, but remember: this moves SeaRay CLOSER to that alliance/dependency, not further from it. The boats they will no longer build were powered by Cummins, Cat, MAN...
 
A few things I've taken from all this...
5) Mercury Marine! We don't provide marine propulsion to big boats, but we do to smaller ones. ("our Marine position is a Unique Advantage. Each engine sold establishishes a 20 year P&A annuity")
My feeling is number 5 alone is the main reason. Smaller boats with outboard power is the growing market. Like it or not.
Mercury is the leader in that area and Brunswick owns Mercury.

I'm sure Cummins/Zeus was a money losing proposition for everyone. I never see that combo on other pod drive boats, it's almost always Volvo IPS, and even Power & Motoryacht is willing to say they are much more maintenance than V-drive or straight shafts.

And it looks like Brunswick thinks that locking in customers this way is somehow still competitive. That's a shame.
 
I’m quick to jump on the Merc-bashing bandwagon, but remember: this moves SeaRay CLOSER to that alliance/dependency, not further from it. The boats they will no longer build were powered by Cummins, Cat, MAN...

I'm sure that relationship looks like it makes sense to Brunswick management even if it doesn't make sense from a competitive/innovation perspective. All Brunswick sees is a captive market, and I'd wager Mercury has a lot of influence over this -- use your stern drive brands to subsidize our outboard R&D and we call sell new outboard designs and be price competitive with Yamaha.

And it may have been a driving factor in Sea Ray pursuing larger designs where they could easily escape Mercury propulsion requirements because Mercury didn't have an engine.
 
My buddy has a 44 Coupe Tiara and the quality is excellent, all around. It runs well and is efficient.

Quality has always been the hallmark of Tiara. Most Tiara owners owned multiple Sea Rays before buying a Tiara. The switch is eye opening for most, and they mostly stay with the brand or move up to semi custom builders from Tiara. Our smaller Tiara is about 5,000 pounds heavier than the 37 foot SR it replaced. It has better fuel economy, has more comfortable seats and a queen sized bed, and goes through Lake Michigan's chop without pounding. It was built by a small, family owned company who's owners go boating with their customers and listen to their likes and dislikes. Customer feedback is reflected in future designs. This is a formula that produces outstanding boats, but also low manufacturing volumes of boats that are a bit pricey. Still, SR seems to shadow price Tiaras for a given size. Worth a look for folks that buy new SRs.
 
I’m quick to jump on the Merc-bashing bandwagon, but remember: this moves SeaRay CLOSER to that alliance/dependency, not further from it. The boats they will no longer build were powered by Cummins, Cat, MAN...
For the record, when I said "smaller boats with outboard power was the growing market, like it or not" I was referring to smaller boats with outboard power in general. Not necessarily the Mercury brand which I happen to have and enjoy. But I agree, it certainly creates an alliance and dependency on the brand.
 
Quality has always been the hallmark of Tiara. Most Tiara owners owned multiple Sea Rays before buying a Tiara. The switch is eye opening for most, and they mostly stay with the brand or move up to semi custom builders from Tiara. Our smaller Tiara is about 5,000 pounds heavier than the 37 foot SR it replaced. It has better fuel economy, has more comfortable seats and a queen sized bed, and goes through Lake Michigan's chop without pounding. It was built by a small, family owned company who's owners go boating with their customers and listen to their likes and dislikes. Customer feedback is reflected in future designs. This is a formula that produces outstanding boats, but also low manufacturing volumes of boats that are a bit pricey. Still, SR seems to shadow price Tiaras for a given size. Worth a look for folks that buy new SRs.
Tiaras are high quality, no doubt about that. Maybe some displaced SR yacht designers can help Tiara fix the overall blah looks of their boats?
 
Tiaras are high quality, no doubt about that. Maybe some displaced SR yacht designers can help Tiara fix the overall blah looks of their boats?
Tiara buyers are fine with the way the boats look, and the company sells every boat they build so they are not exactly looking to be baled out.
 
At first blush at least, it seems if Searay are to produce only outboard powered boats going forward, they would seem to escape the EU tariff on exported boats to the EU.

Outboard Boats
The one bright spot in all of this tariff gloom, as we read the EU tariffs published below, seems to be that outboard-powered boats are exempt from the EU’s 25% tariff. Shipping costs overseas, however, have always inflected these boats with an export “tariff” all its own, because the cost of shipping is a relatively high percent of the boat’s overall price.
 

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