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Mastercraft restructure


ride4fun

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Saw this and in the trade magazine. It sounds like it is better than bankruptcy. Hope it works out not good for the industry if it does not.

http://www.tradeonlytoday.com/home/498708-...n-avoids-bankru

Wow. So many thoughts with respect to this announcement.

If you read the first post in response to the announcement at tradeonly, I couldn't agree more. The year-to-year increases in ski boat prices from all of the players, Malibu included, have been ridiculous. There needs to be a reset in the industry. Why should folks need to have a condo payment for their boat?

WRT the op re "not good for the industry"...The Mastercraft name will live on, even if they can't emerge from their current troubles. Someone else will eventually revive the brand. I think this is probably good for the industry.

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....There needs to be a reset in the industry....

This has my vote for statement of the year, if not statement of the last 5 years.

I have said before that my next ski boat will likely be from a manufacturer that does not currently exist, but one who steps in to fill the void that has been left by the current big manufacturers.

I do not need a $75K boat with all the bells, whistles, gadgets, lighting, stereo equipment and instrumentation/automation rivaling some small aircraft.

Edited by rts
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....There needs to be a reset in the industry....

This has my vote for statement of the year, if not statement of the last 5 years.

I have said before that my next ski boat will likely be from a manufacturer that does not currently exist, but one who steps in to fill the void that has been left by the current big manufacturers.

I do not need a $75K boat with all the bells, whistles, gadgets, lighting, stereo equipment and instrumentation/automation rivaling some small aircraft.

Boy do you have that right.

I've been totally amazed at new boat prices for the last 5 years. At first I thought it was a joke that a ski boat had to have all the extras that do not really add to a day on the lake.

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I totally agree with some overdue price correction. The reason I said that it could be devestating for the market is because if the restructure does not work, and the suppliers don't get their money, it could hurt all manufacturers in the inboard market. Supposedly MC owes Indmar 7 figures. Indmar is not a huge company and I have to believe it would be very hard to absorb that kind of loss. That also applies to the other manufactures that are more inboard specific suppliers. Hopefully it will work out and the market will somewhat stableize.

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Kudos on the "Market Needs a Reset" comment.

Agree 100%.

The public's appetite for debt has changed an awful lot in the last year.

And $50k plus boats on a production scale that is sustainable to someone like MC - I think those days are done for now - and won't come back for many years.

I'm a big believer in the "I don't have it if I don't own it..." which is why my ski boat is just a '93 Euro. I think a lot of folks who manage to get themselves out of debt this time, won't go back in.

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  • 3 weeks later...
Kudos on the "Market Needs a Reset" comment.

Agree 100%.

The public's appetite for debt has changed an awful lot in the last year.

And $50k plus boats on a production scale that is sustainable to someone like MC - I think those days are done for now - and won't come back for many years.

I'm a big believer in the "I don't have it if I don't own it..." which is why my ski boat is just a '93 Euro. I think a lot of folks who manage to get themselves out of debt this time, won't go back in.

Further to my original commment....I stopped in to the local Malibu dealer the other day to ask a question....looked at the in stock boats posted on the wall....sticker price of over $80K for a VTX???? Wow, I didn't realize it was THAT bad...

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Kudos on the "Market Needs a Reset" comment.

Agree 100%.

The public's appetite for debt has changed an awful lot in the last year.

And $50k plus boats on a production scale that is sustainable to someone like MC - I think those days are done for now - and won't come back for many years.

I'm a big believer in the "I don't have it if I don't own it..." which is why my ski boat is just a '93 Euro. I think a lot of folks who manage to get themselves out of debt this time, won't go back in.

Further to my original commment....I stopped in to the local Malibu dealer the other day to ask a question....looked at the in stock boats posted on the wall....sticker price of over $80K for a VTX???? Wow, I didn't realize it was THAT bad...

They are on crack :)

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sticker price of over $80K for a VTX???? Wow, I didn't realize it was THAT bad...

They are on crack :)

and crack kills :)

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Is Axis an attempt to reset? It will be interesting to see what the demand is for that boat versus the higher priced stuff. Would love to see cheaper prices, but not sure I like "cheaper boats." One way to reset might be to make the "standard" boats in each category very basic, and offer everything as an "option" so people could order them that way. On the other hand, "recessed cleats" were an option on my 2009 247, so there is already some of that.

I don't think that at this point in time any of the boat manufacturers or their shareholders are getting rich, so I am not thinking they can cut their profit margins to offer cheaper prices. One nice thing about the boats I have had is that they have held their value much better than my cars of the same age. Thus, the effective cost is not the full sticker price, but the difference. Or at least, that is one of the things I keep telling myself to justify buying such an expensive toy.

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I was in at the Kelowna Dealership. I believe they haven't sold one axis yet!

The Kamloops dealer has almost sold out his left over 08's and 09's. I think he's only got 1-2 boats left. Kam dealer didn't get any axis boats

Edited by CrazyTegger
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I believe the whole topic around the cost of boats today came up a while back before we really knew the extent of the current financial/economic climate, and people had very similar comments about the prices of boats back then. Now add what we know about the long standing effect of the current economic situation, and the situation certainly hasn't improved, so these points are more relevant now than ever (IMHO). I too absolutely agree with most of the comments in this thread. My Dad bought a Sunsetter VLX back in 2001...it's still a beautiful boat in great condition with many of the same quality materials that are used today. While the design of the boats have changed a little and there have been some certain improvements in features and technology, it's not to the tune of a boat doubling in cost over an 8 year period. Yes, supply and material costs have gone up, and I'm sure labor costs & R&D investment go up every year too, but espeically in today's climate, boats are now priced well out of the range for which most people consider a reasonable purchase, especially for something that is garaged for several months out of the year. Boat prices increased artificially largely due to demand and people willing to leverage home equity and other means to buy boats...those days are gone, and reasonable other financing means aren't as easily available today, at least not at reasonable interest rates for the high amounts that are typically left for what most can put down on a new $70K+ boat.

There are obviously people out there who feel a price correction of some sort is due, and this could impact boat sales even as the economy recovers and more buyers start to surface. I think there are "would be" buyers out there right now (I am one) who may pull the trigger if they see signs of pricing corrections that put some boats back in a reasonable range. In other words, if people feel a pricing correction is due, they may hold off on that purchase (even if they are able now) and not risk over paying for a product or getting a better deal at some point. I have been on the fence for a little while now myself and would like to make a purchase in the next year or two. My decision to purchase will likely be influeced by the boating industry's acknowledgement of the current economic situation and re-alignment of prices and/or incentives accordingly. Just about every other major industry has had to make these changes....housing, automotive, etc. There's no reason the boating industry shouldn't either. I'm a long time Malibu fan and hope that's the brand I eventually end up with, but I don't think Malibu is immune to the perception that boat prices for the top brands have creeped into the "rediculous" range.

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I think the only reduction in price most people will see will be the reduction and lack of additional options purchased for the boat. Our boat had 33k worth of options... take out most of those and the price gets more reasonable.

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Boat prices increased artificially largely due to demand and people willing to leverage home equity and other means to buy boats...those days are gone, and reasonable other financing means aren't as easily available today

You hit the nail on the head, and if the manufacturers don't recognize and adjust to this, they will be out of business, and the void will be filled by upstart companies who recognize that not everyone wants/needs the features and technology that they offer.

Give me a well designed hull and an Indmar engine and have people who are skilled put it together, and I'll be interested. (Does this sound like how Malibu got started?) Have the features/stereo/toys be an option for those that must have them. Maybe using this business model they will sell enough boats to stay viable.

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Our boat had 33k worth of options...

LOL! That's 8 grand more than I paid for my entire boat, options included!

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I'm thinking, though don't actually know, that these options are priced into the stratosphere with incredible margins. Regardless of that, there's another factor worth pondering. That's the availability of used boats, and the prices of them. So many people are in too deep, hanging on by a thread. I wonder what the percentage is of folks that buy a $60k or $70k Malibu, borrow through the nose, and have a $600+ boat payment. Anyone want to venture a guess?

All it takes is one or two bad things to happen in that household, and they HAVE to liquidate that boat and eliminate the payment. Or they used home equity to buy the boat, and now their home value is crushed below the value of their first and second mortgage, and they need to liquidate the boat.

It's not just Malibu owners either - it's anyone with one of those high-end toys. The availability of good used boats, low hours, many still under warranty...it's HUGE! Sure, their asking prices on the boattrader-like websites looks ok, but they're not selling at what people used to consider reasonable prices. NADA is valuable for helping start a fire - BUKValue not worth the keystrokes - other than that - not a lot of value to the pricing books. Sellers look to them and feel justified asking what the book says - buyers look at the book and do their 33% off calculation from those numbers. It's ugly out there. On rare occassion, someone sells for an ok price. But more often than not, it's wound-licking time when a buyer does show up.

Sellers that don't HAVE to sell (yet) hang on hoping things improve - which is creating a backlog of used boats that will eventually hit the market. The disparity between how many boats need to be sold, vs. how many buyers are in the market for a different boat, is (in my opinion) HUGE! We haven't seen the last of the crushing value-drops. And as the old addage goes - the bigger they are, the harder they fall. The bigger the initial price - the harder it falls. Dealers can do a little in terms of eating margin to make trade-ins look a little less like carnage - but that will only last so long too.

Just my opinion.

Edited by JeffS
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