Has Sea Ray gone stupid ???

Discussion in 'General Discussion' started by Summer Fun II, Mar 6, 2015.

  1. fwebster

    fwebster Well-Known Member TECHNICAL Contributor PLATINUM Sponsor

    Oct 6, 2006
    Middle Tennessee ; Panama City Beach, FL
    1996 450DA
    3116 Caterpillars
    I've been fortunate enough to go thru a couple of Sea Ray factories more than once. I am from a volume manufacturing industry so I noticed the parallels to the industry I spent years working in. One reason Sea Ray prices seem high is strictly volume related. A typical larger Sundancer will have between 30 and 50 individual fiberglass molds for hull, deck, hatches, hardtop, dash, underside of dash, head module, etc., etc. The mold cost is in the millions $ for larger boats; some less for smaller boats. The molds are fiberglass and can be used only a finite number of times before they must be replaced. The cost of the mold is amortized over the anticipated volume of boats that will be produced using that mold. Production volumes in 2005 may have been 55 boats a week; today it is more like 6 per week. If a mold set costs $1.0 mil and lasts lasts 3 years before it is retired due to model changes, and if the factory works 48 weeks a year, then the amortized cost per boat in 2005 would have been $125; on today's volume, the cost/boat would be $1150. Just on the basis of volume and not considering the higher cost of mold perparation in 2015 vs 2005, each new boat carrries 10X higher mold cost than the boats did when everyone was buying them.

    One could make the argument that we, the buying public, is the reason boats costs are so high, but I seriously doubt that the higher cost of new boats ends up in increased margin for Sea Ray.
  2. Woody

    Woody Well-Known Member PLATINUM Sponsor

    Nov 20, 2007
    N. Wisconsin/Lk Superior
    2005 420DA
    Cummins 6CTA8.3
    As long as one truly knows what they can afford then buy what you want to buy. One tip, and this happened to me. I didn't know that I was going to get into boating like I did, didn't really think about it and wouldn't have guessed anyway. If there's a chance you'll get in the 'move up rut' your wallet will be much better off buying used on the journey to the 'last' boat.
  3. OK, the $53K sticker shock is over. :smt001

    I guess I'm just a cheap baztard,
  4. Do Over

    Do Over Member

    Aug 9, 2014
    Lake of the Ozarks
    2002 340DA
    8.1 Horizons

    Exactly......I've been boating going on 2 years now.....I was uneducated and dumb on my first boat ('93 32' Chris Craft...it was cheap and it sank)......current boat is my 340....my point here is I didn't start small and feel I've avoided the footitus ......for awhile anyway. Thanks to this site and the members here I'm a lot smarter and wiser....I've had people tell me "geez...first boat a 30+? that's pretty brave"......my thoughts are start bigger and stay there for awhile.....there are a lot of great opportunities in well cared for used boats.
  5. islandhopper00

    islandhopper00 Active Member

    Jan 4, 2007
    Lake Norman (Denver) NC
    240 Sundancer
    5.0L 260hp, BIII outdrive
    For the folks that are thinking there won't be problems or issues with a new boat, you have a big lesson coming. New boats are full of factory issues that will need to be worked out. Sometimes small, sometimes huge.

    Lets see, the statement made to me was......."these boats are hand made, blah, blah, blah.......... Do your research I say. I bought my boat brand hammer new, NEVER AGAIN.
  6. Mike, I take it, You had alot of problems with yours ?.
  7. tdschafer

    tdschafer Well-Known Member

    Aug 24, 2009
    Long island , NY
    1997 330 sundancer
    twin 454's, Carb, V-Drives
    This is very similar to what happened with the cost of the B2 stealth bomber as I recall. I used to work for a firm that manufactured some parts for the B2 back when it was still top secret. Once it was public record as the Cold War ended it was divulged that the cost per plane was close to 1 billion dollars or something ridiculous like that. The public went crazy as articles were written all over about governments wasteful spending. So as I was sitting with the Northrop- Grumman rep I asked him why the plane was do expensive. His explanation was simply that the contract was originally for a fleet of "X" amount of aircraft (I believe around 300) but when Dick Cheney cut the defense budget so radically under Busch 1, with the collapse of the Soviet Union, the order was cut to 75 aircraft. At this point all of the R& D & manufacturing costs , including the top secret plant they built in California, had to be extrapolated over much fewer units. That is what drove the cost of those planes up! It just sounded similar to what you described with the current Sea Ray situation.

    True. One needs to look no further than what Scott Ferguson has gone through.

    Sent from my iPhone using Tapatalk
  8. SeaRayCorporate

    SeaRayCorporate Member

    Jul 17, 2013
    Knoxville, TN
    2014 350 SLX
    T350 MAG
    We obviously don't care for the title of this thread when what the OP objects to is the price of new boats, but I understand the power of hyperbole.

    For the most part, Sea Ray's current MSRP figures (and especially the actual transaction prices) are highly competitive with similar new boats. In fact, with an added emphasis on "price point" boats since the recession, Sea Ray is actually offering select models with MSRPs below several lesser competitors (Sea Ray's 19SPX -- which was also in the email Wayne referenced to start the thread -- is less than the comparable offerings from Bayliner and Chaparral, much less Cobalt, Regal, Formula, etc). And that includes Sea Ray's 5 year bow to stern warranty and dealer network standing behind the boat, something the other guys can't touch.

    I don't think Sea Ray is uniquely pricing the brand out of the market (see our market share, competitors prices, etc), but rather that current new boat pricing will ensure fewer and fewer people will be able to afford new boats in general. I was at a boat show last night where a new 23' wakeboard boat had an MSRP of $173k(!)

    One key point that may get lost here is the impact of compound interest over long periods of time. If you bought a boat brand new in 2001 and boat prices go up by 5% per year (technology, emissions, labor costs, health care, etc), that exact same boat would be 100% more expensive today. Double the price. For the same boat.
    The effect of compounding interest is more visible in boats than in other areas of our life -- like cars -- in part because boats have much longer average useful life than many of the products we use. You can see from the owner signatures here on CSR that there are A LOT more boats from the 1990s and early 2000s than most comparable car forums, for instance.

    Again, these are macro issues, not unique to Sea Ray. As to Sea Ray's unique outlook I would offer a couple observations: Sea Ray is usually the best-selling brand in every segment where we build boats, and never worse than #3. That's across an amazingly broad portfolio of 19'-65' spanning $30k to $3M. That doesn't happen with "stupid" pricing or portfolio management. Sea Ray competes against niche specialists in every segment who can plan their whole year around picking off a couple of Sea Ray models and trying to outsell them -- competition is fierce. We don't have the luxury of simply jacking up prices without regard for market forces. Second, unlike nearly all other boat manufacturers, Sea Ray's profitability (at least a proxy on it) is a matter of public record. Brunswick reports on profitability by segment on a quarterly basis. You don't have to read deeply to see that Sea Ray is hardly reaping massive profits at the consumers' expense. No one likes to feel taken advantage of for someone else's gain -- at that certainly isn't happening here.

    I wish new boats cost less. The traditional model of just accepting 4-5% price increases every year is killing affordability. On the current trajectory, fewer and fewer people will be able to participate in this pastime we all love. And we're working hard to do something about it. In the mean time, we try to offer convenience (5 year bow to stern warranties on day boats), technology (QuietRide, joystick control) and innovation (Venture, SkyFlow) to help differentiate new boats from older models.

    Thanks for listening.
  9. Big Island Lifer

    Big Island Lifer Active Member

    Feb 1, 2010
    '96 330 Formula SS
    For Sale '85 255 Amberjack
    Single 5.7
    Thanks corporate. It's not everyday you get to hear straight from the horse's mouth on uncomfortable topics like this. It is a matter of the current economic situation. I would love to know if you could share how many boats did Sea Ray sell in 2014 vs say 20 years ago in 1994? Has the volume dropped?
  10. DF470DA

    DF470DA New Member

    Mar 14, 2012
    2012 470DA
    480 HO Cummins
    I also appreciate the SRC response. A forum allows for everyone to express their opinion and it certainly allows for some feather ruffling. With that said, I agree with SRC's comments that they are priced within the ranges of competitors similarly sized boats. Maybe even a little on the lower side than higher. My only real gripe is when SR (and I am sure others, but since I buy SR's I have that as my point of view) takes a model, re-stickers that model to appear to be bigger and then raises the price not 3-5% but 20+%. My case in point is my 2012 470DA, which in 2009 was originally called the 43DA. The base price was somewhere south of 800k, and then the same exact boat (and it is exact) in 2012 with a new 47 foot moniker, based out at well into the 900k's, that just doesn't seem right. The 470 is really a 43 foot boat with a big platform. I have a good number of buddies, with 420DA's/44DA's and older 450/460's and all of them are noticeable larger that my supposed to be 47 foot boat. This is not exclusive to SR I am sure, but one cannot argue that it's not a margin play, the cost to build that boat in 2009 vs. 2012 could not have changed much at all, with that said I love my 43/470 and have spent many hours talking to prospective buyers about the great things it offers. And should luck have it (You know - the Lotto luck lol) I would order a new L650 tomorrow and not even think about it. It's just an opinion on the way companies increase margin and price by rebranding a particular model to appear you're getting more while paying more....
  11. ravill

    ravill New Member

    Sep 26, 2014
    220 Sundeck OB
    200 hp Mercury

    My brand spanking new 2014 had a few issues. Non-working speedo, a bunch of loose screws under the helm, the center door wouldn't stay open, a broken bimini attachment, the drain from around the counsel had no exit and drained right on the electronics, etc.... There were, what seemed, some QC issues that had fallen through the cracks.

    These have been fixed by me as I have no sea ray dealer close to me. And I live in the San Francisco Bay area!

    When I was deep in the console of my boat fixing these things, I noted that my 2014 Sea-Ray is not built like my 2015 Audi S8. The boat is pretty straight forward and makes "sense" to work on. It is quite simple in it's design. And I do appreciate how every nut, bolt and washer is stainless steel. I can see quality hardware through out.

    I bought my 2014 220 Sundeck Outboard, because it had an outboard and the fact that I wouldn't have to buy a new truck to tow it.

    I paid $54 boat bucks out the door. Yes, I thought it was an expensive first boat. But to play in the water the way I wanted to (with an outboard, 'cause I'm going out in salt water! Ha!) I had to buy new.

    The only thing I would do different is buy the 24 footer instead of the 22 footer. My rig tows it wonderfully.


  12. Z-Worthy

    Z-Worthy Member

    Jun 20, 2014
    Sandusky, OH
    1997 400 DA
    300hp CAT 3116s
    I really have no arguments against Sea Ray (or any other boat manufacturer) for how they price their new products. Product pricing reflects so many more things than just the sum of the parts. If you owned a company and produced a product for $100, but the buying public was willing to pay $500 for it, where would you price that product? All boat manufacturers are pricing their products at the point where the product sells.

    Boating is a value proposition. How much do you value "boating?" Personally, we bought a 17yr old boat and we figure over the course of the next 10yrs it will lose $30-$40k in value. It's worth $3k-$4k per year to us to have the boat we chose to buy. Those numbers make sense to me.

    Where I'm astonished is the number of buyers who voluntarily choose to pay the prices for new boats. Lets just say you buy a 47ft boat today, brand new, at something in the vicinity of $1.0M. And in five years you decide to sell that boat. It's probably worth something in the range of $500k-$600k after 5 years. Are there THAT MANY people capable of losing close to half a million dollars in 5 years? Is "boating" worth $100k/yr to that many people? I just can't wrap my head around that.
    Last edited: Mar 7, 2015
  13. SloBurn

    SloBurn Member

    May 30, 2013
    Greenwood Lake, NY
    1994 270 Sundancer. 7.4L Merc. Tow with a 2006 Dodge RAM Hemi
    340 HP Merc 454 c.i.
    Being in the Service Business, I know that "New does not mean good"! My "NEW" Four Winns was full of headaches, and for almost $60K back in 2001, it wasn't cheap, even back then.
    Whereas my "USED" SeaRay has been great! A bargain, even. For $8K just four years ago, and about $1K worth of repairs, it's been well worth it- in comparison to the "NEW" Four Winns.
    I would never buy new again, car or boat. I'd rather deal with some one else's headaches on the cheap, than pay top dollar for "NEW" headaches of my own.
  14. Woody

    Woody Well-Known Member PLATINUM Sponsor

    Nov 20, 2007
    N. Wisconsin/Lk Superior
    2005 420DA
    Cummins 6CTA8.3
    There are folks that would find your willingness to lose 30-40K a bit extravagant.:smt043If some people buy a new 60' SR it's really nothing I'd spend time pondering, I figure they didn't get the $$$ because they're stupid so they must know what they're doing.:huh:
  15. Chris Nowell

    Chris Nowell Active Member

    Nov 28, 2011
    Lake Okanagan, Kelowna B.C.
    '05 622 Hardtop w Alaska Bulkhead, 270 Mercury Marine sport inflatable, pulled by a 6.0L Silverado
    4.3 MPI Merc w Alpha I drive, 5 hp 4 stroke Merc aux.
    Dude, if you can buy a NEW 280 for under 120 then buy it quick, before someone else does. Last year, when we bought our 240, the equivalent "new" boat had just arrived at the dealership. It was a 260DA but because of the moulded swim platform we were told it had roughly the same interior space as ours,,,,,, $160K !!!!! That was in WA state, in US dollars and didn't include tax,,, AND it was a 260 not a 280.
  16. Chris Nowell

    Chris Nowell Active Member

    Nov 28, 2011
    Lake Okanagan, Kelowna B.C.
    '05 622 Hardtop w Alaska Bulkhead, 270 Mercury Marine sport inflatable, pulled by a 6.0L Silverado
    4.3 MPI Merc w Alpha I drive, 5 hp 4 stroke Merc aux.
    I stand corrected. Thanx for the explanation, and keep up the good work.
  17. islandhopper00

    islandhopper00 Active Member

    Jan 4, 2007
    Lake Norman (Denver) NC
    240 Sundancer
    5.0L 260hp, BIII outdrive
    Understatement......and Sea Ray didn't do a damn thing to help me.
  18. islandhopper00

    islandhopper00 Active Member

    Jan 4, 2007
    Lake Norman (Denver) NC
    240 Sundancer
    5.0L 260hp, BIII outdrive
    Sorry, I don't believe a word of this. It all sounds great, but don't believe it. Sea Ray has leftover boats in dealer showrooms around the country right now. Just because x,y,z company is charging x amount of dollars for their better or worse boats, doesn't mean Sea Ray has to follow. Set your own pricing. You can show me the books and I'll not beileve the MSRP pricing on cruisers. Just be honest, you don't care if the people that bought Sea Ray before can now, because your target customer isn't them anymore.
    No worries, I wouldn't buy another new Sea Ray after the way Sea Ray treated me on my new boat. So you haven't lost a customer. I bet you don't know why my boats name is Frayed Knot!
    Last edited: Mar 7, 2015
  19. Well, just pm Jim or Scott and have this thread deleted.

    The last time I looked, I live in the USA and I'm entitled to say my opinion. :smt001

    Or did we lose the right ?. :smt017
    Last edited by a moderator: Mar 7, 2015
  20. fwebster

    fwebster Well-Known Member TECHNICAL Contributor PLATINUM Sponsor

    Oct 6, 2006
    Middle Tennessee ; Panama City Beach, FL
    1996 450DA
    3116 Caterpillars
    Last time I looked, SeaRayCorporate has that same right.

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