Genmar/Ranger Bankrupt?

[Captmikestarrett]

So the parent company filed CH 11 and the factory yanked all the boats on consignment from the dealers.

But reps from Ranger say it will not close it's doors.

Anybody effected by this news..

Capt Mike

[flfireman]

Guessing with the economy in the dumper, big dollar bass boats are not a necessary item right now.

[nofearengineer]

I also wonder how Phoenix is going to do, having just jumped in. Really bad time for a big luxury item business startup.

[jasonfish320]

This doesn't surprise me, it's been coming down the pipe for a few years now. I would estimate that the spiral started with the influx in gas prices.(and ethanol certainly hasn't helped) Tournament numbers have dropped substantially in the past 3 years. One of the largest that I participate in is one that contributes half the entry fee to the special olympics. However, it also draws huge sponsors who make up the difference and the cash winnings are usually very large. The first year I started fishing this tournament you would get nearly 100 boats...the last two years have struggled to get 40! Nobody is interested in buying new boats. And I don't blame them, look at the used market right now. There are some great deals out there.

[keysd13]

I've been looking at boats for a few months now and it is funny that dealers are unwilling to drop the prices. For example I looked at an 07 procraft that has been on the lot for well over two years and the dealer was still unwilling to neg. on the price. Hopefully these companies will figure out that people are unwilling to pay 30k+for a decent boat and motor combo. 50k for a ranger.

[Captmikestarrett]

Originally Posted by keysd13

I've been looking at boats for a few months now and it is funny that dealers are unwilling to drop the prices. For example I looked at an 07 procraft that has been on the lot for well over two years and the dealer was still unwilling to neg. on the price. Hopefully these companies will figure out that people are unwilling to pay 30k+for a decent boat and motor combo. 50k for a ranger.

Well the way it works for dealers can be two ways.

1. They can pay points on inventory each quarter. Thus the real price of the boat goes up each quarter.
2. Pay for the boat outright and never lower the price so profit is achieved.

This the way America works.. spend your credit into prosperity..

Capt Mike

[Abbeysdad]

Originally Posted by keysd13

I've been looking at boats for a few months now and it is funny that dealers are unwilling to drop the prices. For example I looked at an 07 procraft that has been on the lot for well over two years and the dealer was still unwilling to neg. on the price. Hopefully these companies will figure out that people are unwilling to pay 30k+for a decent boat and motor combo. 50k for a ranger.

I think it's gonna depend on his profit margin. I think that unless he needs the space, that boat might better just set there, than to sell it for a loss. Yes the economy tanked, but if you were him, you likely wouldn't give it away so long as there was hope that the economy and customers would rebound.
(just trying to examine the other perspective).

I think it's gonna be tough for Bass Boat manufacturers for some time - they are highly specialized and highly priced and there are lots of [other] boats you can comfortably fish from that are much easier on the pocket book. Don't get me wrong...bass boats are nice, but the casual week-end fisherman doesn't want/need a high end boat to get out on the water a couple of times a month... (and for much of the north, it's only 3-4 months a year!)

[nofearengineer]

Don't miss a salient point:

Car dealers, boat dealers, etc...they are all subject to the cost of money. A dealer isn't like the stubborn fool who lets that beautiful antique car crumble into rust in the back yard before he'll let it go for 75% of what he thinks it's worth (I see this every day...everybody loses in this deal).

A dealer/mfr team will sell it below cost if they have to, because the cost of not having that money in pocket is 8% a year, or whatever the current interest rates are. Companies with large capital investments have entire departments set up to calculate the current cost of money. It is factored into every single thing they do.

What a boat/car sitting unsold on the lot for 3 years should tell you:

It was so overpriced to begin with, it can incur several years of shelf time and still be profitable. They'd rather it didn't, but they overcharged enough on the ones that sold quickly that it's just a numbers game.

Remember, this pastime is a leisure activity...manufacturers know that too, and charge out the wazzoo for just about everything we buy. I'd LOVE to know the profit margin on bassboats during boom times. It's gotta be huge.

[Abbeysdad]

Originally Posted by nofearengineer

Don't miss a salient point:

Car dealers, boat dealers, etc...they are all subject to the cost of money. A dealer isn't like the stubborn fool who lets that beautiful antique car crumble into rust in the back yard before he'll let it go for 75% of what he thinks it's worth (I see this every day...everybody loses in this deal).

A dealer/mfr team will sell it below cost if they have to, because the cost of not having that money in pocket is 8% a year, or whatever the current interest rates are. Companies with large capital investments have entire departments set up to calculate the current cost of money. It is factored into every single thing they do.

I guess I was thinking of the small town boat dealer who I've heard say "I'll let it rot in the yard before I sell it at a loss. I'm not in business to lose money". Besides, I'll wait - it'll sell".

[nofearengineer]

Originally Posted by Abbeysdad

I guess I was thinking of the small town boat dealer who I've heard say "I'll let it rot in the yard before I sell it at a loss. I'm not in business to lose money". Besides, I'll wait - it'll sell".

That guy is kidding himself. It isn't even about what he paid for it. It's about what the boat is worth. If he paid too much for it to begin with, that's when he lost money on it, not when he sells it for what it's worth.

[Abbeysdad]

A keen eye on value, a low overhead, a modest profit margin resulting in a value selling price yields success while selling at or below cost can only yield failure.

[keysd13]

+1 nofear. Perhaps when it sits till 2010 I will get it for the price I want.

[nofearengineer]

Abbey...companies sell items below cost all the time, because of that very overhead (there are limits to how low you can keep it)...and by not producing and selling the item, they lose even more than by selling it at a loss. Holding inventories costs big bucks. Anyway, I know there are those who hold on to stuff like it's personal...I'm not arguing that.

[Abbeysdad]

Holding inventories costs big bucks

Bean counters especially wanna tack warehouse costs on to inventory, but lets put this in perspective. The only storage cost of a boat in the dealers yard is the canvas to keep it covered (eventually absorbed by the purchaser). So what is the real cost of storing it vs. selling at a loss just to move it quicker.

I guess eventually that 'new' 2007 boat (I'm assuming it was never used) has to be sold at a reduced cost or else everybody buying a 'new' boat is gonna want a 2010 instead. I mean, who buys a three year old boat unless it's a few thousand dollars less than a new one.
The real debate has to be about price if it was used. Lets say it's 1-2 years old and used, but in great shape and was traded in. New it was $30k. What is the fair market value. $25k....$20k ? Lets say $20k on the trade-in and the dealer now wants $22k. Keys comes in and says "I'll give you $15k". Dealer says "sorry, no".
Who's right?
Of course I'm just picking numbers out of the sky. Clearly if this was a new boat that has sat there for two years, on the surface, the price wasn't reduced properly when the next model year came out and it may never be sold. Then again, dealers need a 'showroom' to sell boats and I thought they were on consignment and/or on factory buy back contracts.
....
(But since I'm not a boat dealer, I'm just babbling on here, so I'll stop now )