When I was growing up we had a big box TV in the living room. It was bulky, heavy and the picture wasn’t all that great. There was no need for a remote control (apparently that’s what my parents had me for). Nowadays we have tiny flat screens, video on demand, blueray, TV lifts, surround sound, multiple zones and so much more. Our ever growing demand for these image makers increased the number of manufacturers which resulted in a crowded industry. By choice, or by force, manufacturers have had to adjust- some have gone for bargain pricing, some for premium technology, and others have fallen somewhere in the middle. Those that embraced their course have done very well…then there are those that reject their newfound identity, or worse yet, they haven’t figured it out. These latter ones will not make it.
Does your boat manufacturer have a future?
The auto and marine industries have also suffered from the same evolution issues. Both have seen their fair share of manufactures come and go, rise and fall. This latest economic hiccup has further highlighted the fragile state of these industries as even perennial Giants collapsed or suffered major setbacks. Many of the price conscious builders took the initial hit since their slim margins depend on high volume. On the other end, exotic premium brands have had a tough time justifying their prices. Eventually those that hung in the middle, well they too were hung out to dry. Yes, this wave has washed away many, but not everyone. In fact, those that understood, embraced and excelled at their position have faired just fine.
Ford just posted big gains, Porsche is up 57% YTD and Hyundai continues to beat expectations. Why? Because these builders acknowledged their role long ago and have put all their energy into excelling at it, not climbing out of it. Sure they also had their scares, but all they had to do is adjustments, not identity changes. We can find similarities in the boating world. Builders such as Nordhavn, whose ocean-crossing image is engraved in our heads, are staying ahead of the wake and perhaps gaining speed. Does this make them a good investment? You bet, which only helps to further cement their future.
Yacht builders today face a lot of challenges, but none is more important than their identity. The sooner they figure it out, the sooner they can excel at it and the better off they will be. As consumers, we like stability. We find comfort in knowing (or expecting) that those that we spend our money on will be around. It doesn’t matter if we’re buying the low cost or high end item. We want to see our manufacturers succeed because it must mean that their product is good and that makes us feel validated for purchasing it.
If you own a yacht or are in the market for one, think about your manufacturer’s identity. Are they consistent? Are they resisting their identity or are they embracing it and doing their best to excel at it? If the answer is resisting, then ask them why and listen good because if they don’t have a sound reason then they probably do not have a sound plan for the future.