THOMAS DAMMRICHPRESIDENT, NMMA
VIRGINIA MARINE TRADE ASSOCIATION
NOVEMBER 10, 2015
2
EVERY SATURDAY & SUNDAY!
3
BEST OF ALL TIMES
STATE OF THE U.S. RECREATIONAL BOATING INDUSTRY
5
WHAT CONCERNS YOU ABOUT OUR INDUSTRY TODAY?
6
BOAT REGISTRATIONS
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140
2000000
4000000
6000000
8000000
10000000
12000000
Source: USCG
7
2014 REGISTRATIONS BY BOAT TYPE(MILLIONS)
Outboard Boats; 7.3
Inboard Boats; 1.2Sterndrive
Boats; 1.4
PWCs; 1.0
Sailboats; 0.3
Other; 0.7
Source: USCG
8Source: USCG
Under 26'95%
26' and larger5%
2014 POWERBOAT REGISTRATIONS BY SIZE
9Source: USCG
40' and larger1%
2014 Powerboat Registrations
1%
10
FISHING LICENSE HOLDERS
‘90‘91‘92‘93‘94‘95‘96‘97‘98‘99‘00‘01‘02‘03‘04‘05‘06‘07‘08‘09‘10‘11‘12‘13‘14‘150
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000 28,463,499.0
Source: U.S. Fish and Wildlife Service
11
FISHING LICENSE SALES
• Fishing is adding and losing participants at a high rate. – Nearly half, 46% do not renew their
licenses regularly– Average angler renews their license 3 out
10 years– 70% of boats used for fishing
12
DAYS OF USE OF BOAT
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
41
32
39
29
34
28 30
26
30 31
Source: Foresight Research
13
<25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+0%
2%
4%
6%
8%
10%
12%
14%
16%
Boat Owner Age Distribution - 1997
Age Range
Per
cen
tag
e o
f A
ll B
uye
rs
AGING DEMOGRAPHICSThe primary factor influencing the future growth of boating is that our most loyal, core market is aging
Average Age 47
Mostly Males
Source: Info-Link
14
AGING DEMOGRAPHICSEvery year the average age of a boat owner has increased by half a year
<25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+0%
2%
4%
6%
8%
10%
12%
14%
16%
Boat Owner Age Distribution - 2013
Age Range
Per
cen
tag
e o
f A
ll B
uye
rs
Average Age 55
Mostly Males
Source: Info-Link
15
AGING DEMOGRAPHICSWe must start to better understand how to motivate younger consumers to buy boats
<25 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75+0%
2%
4%
6%
8%
10%
12%
14%
16%
Boat Owner Age Distribution - 1997 vs 2013
1997 Owners
2013 Owners
2013 Adult Pop
Age Range
Per
cen
tag
e o
f A
ll B
uye
rs
Source: Info-Link
16
THE PROBLEM WITH MILLENIALSRISING STUDENT DEBT
Source: NY Fed Consumer Credit Panel/Equifax
17
BOAT OWNERSHIP IN 2014
82.9%
5.4%
5.3%
3.4% 3.0%
Boat Owners
11.8%5.1%
63.8%
14.5%
4.8%
U.S. Population
African-American Asian Caucasian
Hispanic Other
Source: Foresight Research, U.S. Census Bureau
18
HISPANIC BOAT OWNERSHIP IN 2014
5.30%
94.70%
Boat Owners
Hispanic
Non-Hispanic
14.5%
85.5%
U.S. Population
Source: Foresight Research, U.S. Census Bureau
19
PERCENT OF UNITED STATES POPULATION BY AGE GROUP AND ETHNICITY, 2050
Hobby Center for the Study of Texas at Rice University
20
21
STAGNANT MIDDLE CLASS
Source: EPI
22
GOVERNMENT REGULATIONS GROWING
• Acquatic Invasive Species Regulation Growing• Ethanol—Pressure to Increase % in Gasoline• Access to the Water—National Parks (Biscayne,
Everglades)• Access on the Water—Red Snapper, MSA• EOL Boat Recycling or Dismantling• Tax Reform Threats?• Sport Fish and Boating Trust Fund Funding
23
WHAT’S HAPPENING?
24
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
$27.7
$32.0 $34.2
$30.2
$33.8 $35.6
$37.6 $35.7
$32.3
$29.6 $29.1 $30.5
$32.6 $33.3 $35.4
US
D (
Bill
ion
s)
$36B
U.S. RETAIL SPENDING ON BOATING
Source: NMMA
25
2014 BOATING EXPENDITURESIN BILLIONS OF DOLLARS
New Boat
Sales, $8.4
Pre-owned Boat
Sales, $8.7
New Outboard Engine Sales; $2.5 New Boat Trailer Sales, $0.3
After-market
Ac-ces-sory
Sales; $5.6
Other, $9.8
Source: NMMA
26
BOATING PARTICIPATION
0%
5%
10%
15%
20%
25%
30%
35%
40%
0
10
20
30
40
50
60
70
80
90
10036.5% 35.8%
26.0%
35.7%
Millions of Boaters Participation Rate
Pa
rtic
ipa
tio
n R
ate
*
Mil
lio
ns
of
Bo
ate
rs*
Source: Foresight Research, U.S. Census Bureau*Adults 18 years of age and older
27
• 3 billion boating exposure hours• More than 300 million boating trips in 2012
Source: USCG
BOATING IS PERVASIVE
28Source: NMMA, Foresight Research, U.S. Census Bureau
AN AMERICAN INDUSTRY• 95% of boats sold in the U.S. are built
in the U.S.• 97% of U.S. boat manufacturers and
dealers are small businesses• 72% of boat owners have a less than
$100K HHI
29Source: RMRC
ECONOMIC VALUE OF BOATING
• 34,833 boating industry businesses
• Employing 472,594 people in the U.S. in boating-related manufacturing, services and sales
30
VIRGINIA ECONOMIC VALUE OF BOATING
• Virginia• $2.9 billion total
economic impact
• 15,547 jobs
• 756 businesses
• 237,551 recreational boats registered
31
TRADITIONAL POWERBOAT RETAIL UNIT SALES
1 1 1 1 1 1 1 1 1 1 2 2 2 2 2 2 2 2—
100,000
200,000
300,000
400,000
500,000
600,000
UN
ITS
1980s Recession Asian Financial Crisis
Desert StormIraq War
Great Recession
911
Source: NMMA, SSI
32
2014 UNIT SALES GROWTH SINCE RECESSION
source: SSI
73%68%
46%
38%35%
23% 22%19% 18%
16% 16%11%
0%
33
BOUNCEBACK
Pontoon
Aluminum Outboard 26'+
Aluminum Outboard <26'
Fiberglass Outboard <26'
PWC
Jet Boat
Ski Boat
Fiberglass Outboard 26'+
Sterndrive Cruisers
Bass Boat
Deck Boat
Inboard 26'+
Inboard <26'
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
2014 Retail Unit Sales as Percentage of Pre-recession Unit Sales
source: SSI
34
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD
-2%-4%
-21%
-26%
4%
12%
21%
13%
6% 7%
YO
Y C
ha
ng
e
source: SSI
PONTOON BOAT RETAIL SALES
35
Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15
-13%
-34%
-20% -20%
5%
14%
11%13%
12 Months Ending March
YO
Y C
ha
ng
eSALTWATER FISHING BOAT RETAIL SALES
source: SSI
36
2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD
-8%
-20%
-22%
-4%
3%
11%
5%
7% 7%
YO
Y C
ha
ng
e
source: SSI
OUTBOARD BOAT RETAIL SALES
37
2007 2008 2009 2010 2011 2012 2013 2014 2015YTD
-8%
-26% -27%
-23%
-3%
13%11%
16%
11%
YO
Y C
ha
ng
eSKIBOAT RETAIL SALES
source: SSI
38
STERNDRIVE BOAT RETAIL SALES
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 YTD
-6%
-11%
-36%
-31%-30%
-10%
-2%
-8% -8%-10%
YO
Y C
ha
ng
e
source: SSI
39
GROWTH IN 2015
source: SSI
PW
C
Oth
er
Alu
min
um
Ou
tbo
ard
Oth
er
Fib
erg
lass
Ou
tbo
ard
Po
nto
on
Fib
erg
lass
Ste
rnd
rive
Inb
oa
rd S
ki
Ba
ss Jet
De
ck
Inb
oa
rd C
ruis
er
Ho
use
bo
at
14.8%
5.4%7.2% 8.8%
-7.5%
10.3%
32.9%
25.5%
9.2%
0.2%
-28.6%
9/1
5 Y
TD
YO
Y C
ha
ng
e -
Be
llwe
the
r R
eta
il S
ale
s
High Unit Volume Low Unit Volume
40
Healthy Economy
Job Creation
Consumer Spending
Housing Growth
Consumer ConfidenceWHAT DOES
BOATING NEED TO GROW?
41Source: BEA, Philadelphia Fed
REAL GDP
2012 2013 2014 2015 2016
-2%
-1%
0%
1%
2%
3%
4%
5%
Q3; 1.5%
Pe
rce
nt
Ch
an
ge
fro
m P
rec
ed
ing
Pe
rio
d
Forecasts
42
U.S. Job CreationUnemployment Rate: 5.0%
Source: BLS
43
Jan-13
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan-14
Feb
Mar
Apr
May
Jun
Jul
Aug
Sept
Oct
Nov
Dec
Jan-15
Feb
Mar
Apr
May
Jun
Aug
Sep
Oct
-50
0
50
100
150
200
250
300
350
400
450
Nonfarm Payrolls Manufacturing
(Th
ou
sa
nd
s o
f E
mp
loye
es)
MONTHLY CHANGES IN EMPLOYMENT
Source: BLS
44
Virginia Job CreationUnemployment Rate: 4.3%
Source: BLS
45
REAL DISPOSABLE INCOME
Jan-
14
Feb-1
4
Mar
-14
Apr-1
4
May
-14
Jun-
14
Jul-1
4
Aug-1
4
Sep-1
4
Oct-1
4
Nov-1
4
Dec-1
4
Jan-
15
Feb-1
5
Mar
-15
Apr-1
5
May
-15
Jun-
15
Jul-1
5
Aug-1
5
Sep-1
50.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
3.4%
YO
Y C
ha
ng
e
Source: BEA
46
CONSUMER SPENDING
source: BEA
200
1-Q2
200
2-Q1
200
2-Q4
200
3-Q3
200
4-Q2
200
5-Q1
200
5-Q4
200
6-Q3
200
7-Q2
200
8-Q1
200
8-Q4
200
9-Q3
201
0-Q2
201
1-Q1
201
1-Q4
201
2-Q3
201
3-Q2
201
4-Q1
201
4-Q4
201
5-Q2
-6%
-4%
-2%
0%
2%
4%
6%
8%
An
nu
ali
zed
ra
te
47
U.S. CONSUMER CONFIDENCE V. BOAT SHIPMENTS
-
50,000
100,000
150,000
200,000
250,000
300,000
0
20
40
60
80
100
120
Boat ShipmentsConsumer Confidence
R1
2M
Tra
dit
ion
al P
ow
erb
oa
t W
ho
les
ale
S
hip
me
nts
Co
ns
um
er
Co
nfi
de
nc
e R
12
M A
ve
rag
e
Source: NMMA, The Conference Board
48
U.S. NEW HOME V. BOAT SALES
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
-
50,000
100,000
150,000
200,000
250,000
300,000
350,000
New Homes Traditional Powerboats
Ne
w H
om
e S
ale
s, S
AA
R
R1
2M
Tra
dit
ion
al P
ow
erb
oa
t R
eta
il S
ale
s
Source: SSI, U.S. Census Bureau
49
RV V. BOAT SALES
Source: SSI
1999 Q1
2000 Q1
2001 Q1
2002 Q1
2003 Q1
2004 Q1
2005 Q1
2006 Q1
2007 Q1
2008 Q1
2009 Q1
2010 Q1
2011 Q1
2012 Q1
2013 Q1
2014 Q1
2015 Q1
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Traditional Powerboats RVs
R1
2M
Re
tail
Sa
les
YO
Y C
ha
ng
e
50
LIGHT VEHICLE V. BOAT SALES
Source: Autodata Corp., SSI
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Traditional Powerboats
Light Vehicles
R1
2M
Re
tail
Sa
les
YO
Y C
ha
ng
e
51
MOTORCYCLE V. BOAT SALES
2001 Q4
2002 Q3
2003 Q2
2004 Q1
2004 Q4
2005 Q3
2006 Q2
2007 Q1
2007 Q4
2008 Q3
2009 Q2
2010 Q1
2010 Q4
2011 Q3
2012 Q2
2013 Q1
2013 Q4
2014 Q3
2015 Q2
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
30%
Traditional Powerboats
Motorcycles
R1
2M
Re
tail
Sa
les
YO
Y C
ha
ng
e
Source: MIC, SSI
52
U.S. CITY RETAIL GAS PRICES
Source: EIA
$1.8
$2.0
$2.2
$2.4
$2.6
$2.8
$3.0
$3.2
$3.4
$3.6
$3.8
Nov-15; $2.17
Reg
ula
r, C
on
ven
tio
nal
Gas
– W
eekl
y P
rice
Series Max: July 14, 2008, $4.05
53Source: Info-Link
54
BOAT BUILDING PRODUCTION INDEX
ITR Economic Boat Building Production Forecast
0
40
80
120
160
0
40
80
120
16012MMA
12MMA Forecast
60.01666667
12MMA3MMAQUARTERLY PRODUCTION
(3MMA)
ANNUAL PRO-DUCTION
(12MMA)
OUTLOOK
MANAGEMENT NOTE
53.6
60.0
Annual Boat Building Production will remain relatively flat through
mid-2015. Rise will re-turn and steadily persist through the majority of
2017
Use this period of softer production to develop
and implement methods to streamline production.
Dec-14 Mar-15 Jun-15 Sep-15 Dec-15 Mar-16 Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-1759.2 59.0 58.3 59.2 60.6 61.7 63.2 64.7 65.8 66.4 66.4 67.460.4 60.2 59.5 60.5 61.9 63.0 64.3 66.1 67.2 67.6 67.7 68.761.6 61.3 60.7 61.8 63.1 64.2 65.5 67.4 68.5 68.8 69.0 70.1
Annual Production (12MMA)
Lower Forecast Range
Upper Forecast Range
Source: ITR Economics
55
ECO-SYSTEM OF THE MARINE INDUSTRY
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May 9-11, 2016Renaissance Hotel, Washington DC
nmma.org/abc
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www.BoatingUnited.com
QUESTIONS?