Genmar making tin boats again

[Black_Bay]

Maybe Irwin realizes that he doesn't have a price point fishing boat in any of his lines and knows he needs one in this market. He should have kept Lowe or Crestliner.

[marine_man]

It will certainly be intresting to see how this plays out. I don't think he'll go overseas, they don't have any overseas builders so far, and it seems odd that he'd start now, but who can tell.

I think a lot of it is that the profit margins have gotten a bit out of control, hence the high price on the current major aluminum boats. I know raw materials costs have increased, but so have petroleum based products and the % increase you see on aluminum boats does not match the % increase in glass boats. I think the aluminum manufacturers wanted to see what people would pay for their brand of boat, and for the most part have been able to get it so far.

marine_man

[Perry]

I'm not sure overseas production would be viable. Many foriegn car manufactures have plants in the US. Yes, there are many cars that are shipped from overseas, but those are mostly from manufactures that sell a majority of their production outside of the US. Their US sales volume would not justify the investment in US based plant. Not sure what the Chinese market is for aluminum boats???? While shipping costs are one consideration, if I remember correctly one of the big factors in foriegn auto manufactures opening US plants was to help reduce volatility from fluctations in currency exchange rates. The Japenesse made their biggest inroads in the US market when the Yen was very weak...it allowed them to sell their cars (priced in stronger US$) for less in the US market. Along with that, I'm pretty sure Irwin knows his buyer and would not risk alienating his buyer with a foriegn built boat...and really, if it were economical to build boats overseas and sell them in the US market it would all ready be happening.

If anyone knows and understands the costs to building an aluminum boat comparable to Lund, it would be Irwin and his team of financial analysts that probably were involved with Lund. He is correct in saying that it will bring down prices in the aluminum boat market. Let's just hope they are commited to making a first class product. It will be interesting to see how it plays out.

With the variety of glass boats they sell, Genmar's current dealer network is much broader geographically. Genmar should be able to leverage that to sell to a larger audience...you do not see too many Lunds outside of the midwest....no dealer support. With an increase distribution area, should be able to sell a higher volume and help with pushing costs down....It will be interesting to watch. Based on the geography of the high end aluminum boat market, I'd be willing to bet the plant will be north of the Mason-Dixon line....but probably not too far north of that....And I wonder if they will be able to lure away a few Lund engineers???

[JohnMickish]

I believe if it is built north of the line the labor cost will be to much. Then again, that might all change depending on who the target market is. If it's an upscale boat targeted at midwestern walleye fisherpeople then the savings on transportation could be huge, but if it's going to be a large market (ie tracker) boat, then building it in Alabama makes more sense.

In my remarks about being forign built, I was thinking if an upstart company could partner up with company like Kia or Hyundi (both Korean and both HUGE manufacturing companies) the possibility to build a Pro-V quality boat for less could be there, and from a buisiness point of view that would give the other company a better foothold in the USA.

But on the other hand, there are so many empty manufacuting plants around the USA that it could be built anywhere, and with the economy we have now there are lots of people willing to work for less.

[AngelicFatum]

Did anybody consider that maybe some of the difference in price would be made up by not having to spend all that sponsor/advertising money?

[JohnMickish]

Did anybody consider that maybe some of the difference in price would be made up by not having to spend all that sponsor/advertising money?

Good point, but how are people going to hear of you if you don't advertise? For what it's worth, Lund has pulled out of most (if not all) sponsor positions.

[bassNspear]

Did anybody consider that maybe some of the difference in price would be made up by not having to spend all that sponsor/advertising money?

thats all in there budjets, you are paying for parts, and labor.

[marine_man]

thats all in there budjets, you are paying for parts, and labor.

And advertising. Sooner or later you are paying for advertising, even if it's rolled up in their margins.

marine_man