$79,995 - The Official 2017 21VLX Thread

[jtrovato]

9 hours ago, Pnwrider said:

This thread is making me lol. A boat is a depreciating asset. @bamaboy can give us all a lesson on which tangible asset will provide the best return, but a boat should not be expected to provide a return. You buy it to have fun on the water with family and friends. Not to hope it's going to be worth as much tomorrow as it was today. Or maybe I look at toy purchases incorrectly? 

I love this thread!  We've been complaining for years (well at least I have) that the prices of these tow boats have gotten out of control.  Hell, 9 years ago when I was getting into my first Malibu, I did it for $42K, albeit a vRide, not a VLX, but it was a Malibu and was about 85-90% of what a VLX was at the time.  I'm glad Malibu finally saw that the prices were getting out of control and brought some reality back to the game.  Maybe the naming is wrong to call it a VLX, but they did the absolute right thing with this boat in my opinion.  The used market is/was just as ridiculously out of control as the new market, so for that to come back to reality where boats actually depreciate in value isn't a bad thing in my opinion. 

[85 Barefoot]

I certainly don't expect boats to appreciate.  But I do care about the predictability of the value of my most expensive non-real estate asset.  

PNWrider, good for you if you just don't care.  Many people do, which is why they pour over what options to get, carefully select colors with mass appeal, wipe down at the end of each use, are careful about how they use it, follow maintenance schedules religiously, etc.  

[EchelonMike]

22 hours ago, 85 Barefoot said:

 

You have a ten year old boat, which is fine and good for you.  My complaints about this, I don't necessarily expect you to understand.  If and when you do get a new boat, and Malibu does this to you with your model, then you'll understand.

 

I think that's the main theme I see in this thread...old(er) boat owners are like "nice job" and new(er) owners are like "what the...?"  I do see your point and your concern as a new owner of a bigger, more expensive model, but I think the more you get people in Malibu's, the better it is for the brand, for resale, for more people coming to participate in forums like this, etc.

 

[85 Barefoot]

1 hour ago, EchelonMike said:

I think that's the main theme I see in this thread...old(er) boat owners are like "nice job" and new(er) owners are like "what the...?"  I do see your point and your concern as a new owner of a bigger, more expensive model, but I think the more you get people in Malibu's, the better it is for the brand, for resale, for more people coming to participate in forums like this, etc.

 

This assumes that Malibu can build more units.  There is not infinite production capacity.  The plant is at capacity much of if not the majority of the time.  This is going to put people in 21 VLXs that by definition would have otherwise been buying a more expensive model, which is better for dealers, gross margin per unit, and resale.  The only people this is good for the 300 buyers (or so, whatever) of this boat next year.  Tall price to pay given the intertwining of the vertical aspects of the industry IMO.

There are people out there who study...really study the financials of MBUU.  And what has its stock price done since this announcement this week?  It's down 4%.  I WANT Malibu to make money, I WANT them to have more R&D budget, I WANT them to have and keep the best talent, and I WANT them to continue to innovate.  From my view and in my opinion, I just can't agree with this direction.  Far too much goodwill cost for too little revenue.

Edited August 11, 2016 by 85 Barefoot

[airshark360]

This is first time sine 2001 I am really considering buying a new boat, 16 years later and the boat doubled its MSRP, I'll take it. There was no way I would of ever dreamed about spending the money you guys do. From onlyinboards.com it looks like a lot of you will take a pretty big hit, sorry but the boat market(price) was getting out of hand. At the rate it was going Malibu's would be at 500k in 10 years, you had to have known something like this was going to happen, come on really. Malibu wants to get ahead of the game before sales start to drop. 

[ibelonginprison]

 

18 hours ago, bamaboy said:

If that happens, me and @ibelonginprison are coming up to C-BUS from Bama punching babies and accosting the elderly all along the way.  

 

Ain't that right IBIP?

 

Damn right, Scoodreaux. Damn right.

[BadgerBoater55]

22 minutes ago, 85 Barefoot said:

There are people out there who study...really study the financials of MBUU.  And what has its stock price done since this announcement this week?  It's down 4%.  I WANT Malibu to make money, I WANT them to have more R&D budget, I WANT them to have and keep the best talent, and I WANT them to continue to innovate.  From my view and in my opinion, I just can't agree with this direction.  Far too much goodwill cost for too little revenue.

Stock prices are determined by future expectations based on what we know today.  So unless you can predict the future sales, profits, and know everything about their strategy, I don't think we need to bring stock price into this discussion.  Not saying there is any correlation here... But look at everyone who was freaking out about Brexit a couple months back... What happened in the market the following week?  It went beyond where it was before Brexit. There is this weird thing called emotion that makes people react to things without fully understanding all the driving factors of what is factual information.  Lets not turn this into another MBUU thread.  Although I always love hearing @IXFE break it down when it comes to this topic, investment theory was one of my favorite classes in college.

[bamaboy]

32 minutes ago, 85 Barefoot said:

This assumes that Malibu can build more units.  There is not infinite production capacity.  

Yup.  And putting more pressure on the factory to churn out units will result in decreased quality control IMO.  Not to mention pressure on dealers to fix warranty issues that should have been caught at the factory

 

All I have to say is sammiches.  Ain't that right @IXFE?

Edited August 11, 2016 by bamaboy

[85 Barefoot]

3 minutes ago, airshark360 said:

This is first time sine 2001 I am really considering buying a new boat, 16 years later and the boat doubled its MSRP, I'll take it. There was no way I would of ever dreamed about spending the money you guys do. From onlyinboards.com it looks like a lot of you will take a pretty big hit, sorry but the boat market(price) was getting out of hand. At the rate it was going Malibu's would be at 500k in 10 years, you had to have known something like this was going to happen, come on really. Malibu wants to get ahead of the game before sales start to drop. 

If in 16 years your MSRP went from 40 to 80, that's $2,500 a year.  And in that time a remarkable amount of advancement has taken place.  It's not your 16 year old boat that just now costs double, it's now a very complex machine.  It would actually be 168 years before it would hit 500k, not 10...but in any event, how can it be said the marketplace was getting out of hand?  The prices may have risen a surprising amount, but the market itself is sound, you could even call it quite "stable", especially considering it's climbing out of a huge boom and bust.  

Is there some market forces that even on earnings calls were "headwinds", yes, especially in the international markets, but sales "dropping"?  There is no empirical evidence that's the case.  Heck my dealer has been sold out of Malibus for 3 months and couldn't get any more.  

Many folks on here apparently think Malibu is like Ford or Chevy.  There are only so many molds, only so many spray bays, and only so many people.  When you start replacing build slots with cheaper models, that would have otherwise been taken by a more expensive unit, why?  

People wanting a new boat are free to not like the prices, but I don't see how Malibu and its dealers' bottom line are better served by this.  But again, that's just like my opinion, man (need Lebowski emoticon and RIP David Huddleston).

[Chrisjjbrown]

3 minutes ago, 85 Barefoot said:

If in 16 years your MSRP went from 40 to 80, that's $2,500 a year.  And in that time a remarkable amount of advancement has taken place.  It's not your 16 year old boat that just now costs double, it's now a very complex machine.  It would actually be 168 years before it would hit 500k, not 10...but in any event, how can it be said the marketplace was getting out of hand?  The prices may have risen a surprising amount, but the market itself is sound, you could even call it quite "stable", especially considering it's climbing out of a huge boom and bust.  

Is there some market forces that even on earnings calls were "headwinds", yes, especially in the international markets, but sales "dropping"?  There is no empirical evidence that's the case.  Heck my dealer has been sold out of Malibus for 3 months and couldn't get any more.  

Many folks on here apparently think Malibu is like Ford or Chevy.  There are only so many molds, only so many spray bays, and only so many people.  When you start replacing build slots with cheaper models, that would have otherwise been taken by a more expensive unit, why?  

People wanting a new boat are free to not like the prices, but I don't see how Malibu and its dealers' bottom line are better served by this.  But again, that's just like my opinion, man (need Lebowski emoticon and RIP David Huddleston).

Actually, if you grow 80K by the price increases of 4% you get to 500k by year 47.......

Edited August 11, 2016 by Chrisjjbrown

[85 Barefoot]

7 minutes ago, BadgerBoater55 said:

Stock prices are determined by future expectations based on what we know today.  So unless you can predict the future sales, profits, and know everything about their strategy, I don't think we need to bring stock price into this discussion.  Not saying there is any correlation here... But look at everyone who was freaking out about Brexit a couple months back... What happened in the market the following week?  It went beyond where it was before Brexit. There is this weird thing called emotion that makes people react to things without fully understanding all the driving factors of what is factual information.  Lets not turn this into another MBUU thread.  Although I always love hearing @IXFE break it down when it comes to this topic, investment theory was one of my favorite classes in college.

In one year, remember this post.  We're all welcome to "predict", and I'm comfortable predicting a drop in gross margin per unit and in number of units sold in the next FY, which starts around now if I'm not mistaken.  

[ibelonginprison]

7 minutes ago, bamaboy said:

Yup.  And putting more pressure on the factory to churn out units will result in decreased quality control IMO.  Not to mention pressure on dealers to fix warranty issues that should have been caught at the factory

 

All I have to say is sammiches.  Ain't that right @IXFE?

Us southerners love our lunch break... and bread bag twist ties.

[85 Barefoot]

1 minute ago, Chrisjjbrown said:

Actually, if you grow 80K by the price increases of 4% you get to 500k by year 47.......

correct...which is why I used the annual price increase of $2,500 

40,000 / 16 = 2500

My number better for my argument!

Edited August 11, 2016 by 85 Barefoot

[bamabonners]

Something that I learned while selling my Axis:  The group of people that are looking at "value priced" boats are not typically your hard core boater that knows much about inboards.  They are beginners and newbies to this type of boat.  They wont understand that this 21 VLX isn't the same at the previous VLX or even the differences between the 21 VLX and the 22 VLX.  They are looking at price first.  In my mind, this will be really bad for the VLX market (including the newer 22 VLX).....well, unless you are the buyer. 

I love the boat though. 

 

 

 

Edited August 11, 2016 by bamabonners

[airshark360]

32 minutes ago, 85 Barefoot said:

If in 16 years your MSRP went from 40 to 80, that's $2,500 a year.  And in that time a remarkable amount of advancement has taken place.  It's not your 16 year old boat that just now costs double, it's now a very complex machine.  It would actually be 168 years before it would hit 500k, not 10...but in any event, how can it be said the marketplace was getting out of hand?  The prices may have risen a surprising amount, but the market itself is sound, you could even call it quite "stable", especially considering it's climbing out of a huge boom and bust.  

Is there some market forces that even on earnings calls were "headwinds", yes, especially in the international markets, but sales "dropping"?  There is no empirical evidence that's the case.  Heck my dealer has been sold out of Malibus for 3 months and couldn't get any more.  

Many folks on here apparently think Malibu is like Ford or Chevy.  There are only so many molds, only so many spray bays, and only so many people.  When you start replacing build slots with cheaper models, that would have otherwise been taken by a more expensive unit, why?  

People wanting a new boat are free to not like the prices, but I don't see how Malibu and its dealers' bottom line are better served by this.  But again, that's just like my opinion, man (need Lebowski emoticon and RIP David Huddleston).

What was a loaded Malibu in 2001? 50k? A loaded Malibu now is the M235 or 25LSV, that is knocking on 150+k(straight guessing)? I never said the VLX would be 500k. And if they raise the price by 4% that brings the 80k to a 83,200, then 86,528, then back at 90k in 2020(3 years 10k), and 101,238k in 2023(6 years later).

Now do the same math on the 25LSV or M35 starting at 150k gets you 250,000 in 2030 and 280,800 in 16years from now I am sorry that said 500k, forgive me, i didn't realize at 4% increase that boats would be a bargain price at $280,800 in 16 years. 

edit, correct me if I am wrong, as its been a few years since I was in college. 

Edited August 11, 2016 by airshark360

[IXFE]

1 hour ago, 85 Barefoot said:

This assumes that Malibu can build more units.  There is not infinite production capacity.  The plant is at capacity much of if not the majority of the time.  This is going to put people in 21 VLXs that by definition would have otherwise been buying a more expensive model, which is better for dealers, gross margin per unit, and resale.  The only people this is good for the 300 buyers (or so, whatever) of this boat next year.  Tall price to pay given the intertwining of the vertical aspects of the industry IMO.

There are people out there who study...really study the financials of MBUU.  And what has its stock price done since this announcement this week?  It's down 4%.  I WANT Malibu to make money, I WANT them to have more R&D budget, I WANT them to have and keep the best talent, and I WANT them to continue to innovate.  From my view and in my opinion, I just can't agree with this direction.  Far too much goodwill cost for too little revenue.

This is the second time you've referred to the factory as being "at capacity."  On multiple occasions Malibu has told us on the Earnings call that they have physically expanded the capacity of the plant and can now handle 5,000 boats per year.  Current production is closer to 3,500.  So it would appear they have room to grow volume and take market share.  

Looking back at my notes... this was almost two years ago.  

I was at the factory in May and it's easy to see the new wing they built.  In fact, they also explained to me how the flow of boats used to go through the factory before adding on the extra space.  

Edited August 11, 2016 by IXFE

[IXFE]

1 hour ago, 85 Barefoot said:

Many folks on here apparently think Malibu is like Ford or Chevy.  There are only so many molds, only so many spray bays, and only so many people.  When you start replacing build slots with cheaper models, that would have otherwise been taken by a more expensive unit, why?  

People wanting a new boat are free to not like the prices, but I don't see how Malibu and its dealers' bottom line are better served by this.  But again, that's just like my opinion, man (need Lebowski emoticon and RIP David Huddleston).

Let's break this down... 

Molds are boat specific.  So adding 21 VLX will require new molds, just like any new model.  But it won't have any impact on the capacity to build other models because those molds are already there.  And if they need new molds, guess what.... they just build more.  As an example, over the past two years they've added additional molds to keep up with 23 LSV demand.  In other words, it's not hard to do.  It's a variable cost and as volume grows they can adjust.  

Spray Bays are not variable... more of a fixed cost.  But as I already posted, Malibu says they have expanded the plant to be able to handle 5,000 units per year.  I assume that includes the spray booths.  

People are easy... just hire more as volume grows (assuming you have room for them, which Malibu tells us they do).  People are even more fungible than molds.  They are hardly a constraint to production.  Seriously, do you really think Malibu would ever turn away volume because they didn't want to hire hourly workers for the plant??

I'll address your margin concerns in my next post... 

[85 Barefoot]

26 minutes ago, IXFE said:

This is the second time you've referred to the factory as being "at capacity."  On multiple occasions Malibu has told us on the Earnings call that they have expanded the capacity and can now handle 5,000 boats per year.  Current production is closer to 3,500.  So it would appear they have room to grow volume and take market share.  

Looking back at my notes... this was almost two years ago.  

They've said that they "have" expanded capacity or "could"?  My understanding is that yes, they could, they have finished off that area to the far side of lamination and made that new "room" to the left of rigging for final prep and such.  However, last time I was there, every inch of the factory was taken, as was every spray booth from dawn to dusk.  Now, if that's old info, then I'll take your word for it.  My boat took more than 2 months to get and my dealer was Malibu-less for the last 3 months and could not get more.  Seems like capacity to me?

2 minutes ago, IXFE said:

Let's break this down... 

Molds are boat specific.  So adding 21 VLX will require new molds, just like any new model.  But it won't have any impact on the capacity to build other models because those molds are already there.  And if they need new molds, guess what.... they just build more.  As an example, over the past two years they've added additional molds to keep up with 23 LSV demand.  In other words, it's not hard to do.  It's a variable cost and as volume grows they can adjust.  

Spray Bays are not variable... more of a fixed cost.  But as I already posted, Malibu says they have expanded the plant to be able to handle 5,000 units per year.  I assume that includes the spray booths.  

People are easy... just hire more as volume grows (assuming you have room for them, which Malibu tells us they do).  People are even more fungible than molds.  They are hardly a constraint to production.  Seriously, do you really think Malibu would ever turn away volume because they didn't want to hire hourly workers for the plant??

I'll address your margin concerns in my next post... 

Molds are extremely expensive and you know that there are only a couple molds for each model.  They are exceedingly expensive.  Product mix has a big impact on the bottleneck.   

I responded on capacity already.  I've never in my life been to the plant and said, wow, they could fit another boat in here...ever.  

Edited August 11, 2016 by 85 Barefoot

[IXFE]

Just now, 85 Barefoot said:

They've said that they "have" expanded capacity or "could"?  My understanding is that yes, they could, they have finished off that area to the far side of lamination.  However, last time I was there, it was not being used, and every inch of the factory was taken, as was every spray booth from dawn to dusk.  Now, if that's old info, then I'll take your word for it.  My boat took more than 2 months to get and my dealer was Malibu-less for the last 3 months and could not get more.  Seems like capacity to me?

Here is a quote from the Q4'14 Earnings Call:

"Factory expansion will be complete by year end, increasing annual capacity from 4k to 5k boats"

As I said when I was there... you can see the extra space they've added and it's being used.  I'm sure they'd have to add new molds, people, etc. to actually build to 5K, but that's the easy stuff (i.e variable not fixed).  The spray booths are not running at capacity today.  They start earlier in the morning just because they want to get a two hour head start on the gel so that it can dry before fiberglass.  But the booths close much earlier in the day also.  I assume they could stay later if needed.  Also, new spray booths aren't hard to add within the existing shell of the building.  

You're right... the Malibu factory is nothing like a Ford or GM factory.  It's way way way less complicated.  You've been there so you know... the Malibu factory is basically a poll building.  It's not rocket science or super expensive to expand. 

[85 Barefoot]

43 minutes ago, airshark360 said:

What was a loaded Malibu in 2001? 50k? A loaded Malibu now is the M235 or 25LSV, that is knocking on 150+k(straight guessing)? I never said the VLX would be 500k. And if they raise the price by 4% that brings the 80k to a 83,200, then 86,528, then back at 90k in 2020(3 years 10k), and 101,238k in 2023(6 years later).

Now do the same math on the 25LSV or M35 starting at 150k gets you 250,000 in 2030 and 280,800 in 16years from now I am sorry that said 500k, forgive me, i didn't realize at 4% increase that boats would be a bargain price at $280,800 in 16 years. 

edit, correct me if I am wrong, as its been a few years since I was in college. 

I would have to disagree that the development of the M235 and its pricing has any relevance to the discussion of the increased price of a VLX.

Just now, IXFE said:

Here is a quote from the Q4'14 Earnings Call:

"Factory expansion will be complete by year end, increasing annual capacity from 4k to 5k boats"

As I said when I was there... you can see the extra space they've added and it's being used.  I'm sure they'd have to add new molds, people, etc. to actually build to 5K, but that's the easy stuff (i.e variable not fixed).  The spray booths are not running at capacity today.  They start earlier in the morning just because they want to get a two hour head start on the gel so that it can dry before fiberglass.  But the booths close much earlier in the day also.  I assume they could stay later if needed.  Also, new spray booths aren't hard to add within the existing shell of the building.  

You're right... the Malibu factory is nothing like a Ford or GM factory.  It's way way way less complicated.  You've been there so you know... the Malibu factory is basically a poll building.  It's not rocket science or super expensive to expand. 

I don't recall saying that capacity can't ever increase, if so, that was a mistake on my part and bad wording.  I have said it runs at capacity a majority of the time, which can be constrained by many things, including HR, floor space, spray booths, molds, R&D, suppliers, or whatever.  I'm not saying they can't grow.  I'm just saying it was my understanding that under the current framework, the plant spends much of its time at capacity, which is the basis for my feelings on product mix and profitability.  Follow me?

[IXFE]

21 minutes ago, 85 Barefoot said:

Molds are extremely expensive and you know that there are only a couple molds for each model.  They are exceedingly expensive.  Product mix has a big impact on the bottleneck.   

I responded on capacity already.  I've never in my life been to the plant and said, wow, they could fit another boat in here...ever.  

You realize that molds have a useful life, right?  They are constantly rotating in new molds and getting rid of old ones.

As for only having "a couple molds for each model" well that depends on the model.  They have way more than "a couple" for the big sellers (e.g. 23 LSV, 22 VLX, A22, etc.).  When I was there in May they told us they had seven molds for the 23 alone.  It wasn't always that way... they added more molds as demand for the 23 grew beyond their initial expectations. The point is... they add new molds all the time.  Big deal.  

 Sure molds are expensive, but what's your point here with molds as it relates to the 21 VLX?  

I think your entire capacity argument is flawed.  You're saying that Malibu's capacity is fixed at 3,500 boats (you believe this because of ONE data point... your boat) and that by adding the 21 VLX to the lineup it's going to reduce the sale of boats like the 23 LSV, 24 MXZ, M235, etc.  Come on man... really??  You think Malibu gonna turn down a M235 order because the factory is clogged with 21 VLX's??

Edited August 11, 2016 by IXFE

[85 Barefoot]

Guys, as I've said before, I WANT Malibu to be the greatest and make more money, and invest more money, and if their developments justify it, for them to CHARGE more money.  I'm not anti-cheaper models, either, but they shouldn't be called a Wakesetter VLX and provide essentially the same performance experience as its "Malibu" brethren.

[IXFE]

Just now, 85 Barefoot said:

Guys, as I've said before, I WANT Malibu to be the greatest and make more money, and invest more money, and if their developments justify it, for them to CHARGE more money.  I'm not anti-cheaper models, either, but they shouldn't be called a Wakesetter VLX and provide essentially the same performance experience as its "Malibu" brethren.

We agree on this... the naming was a mistake, imho.  

This boat was designed to take share from mid-tier boats like Supreme, MB, Moomba, etc.  I doubt very much Malibu ever thought it would cannibalize sales of the 20 VTX or the 22 VLX.  Even if it does, I'm not sure that's a bad thing (for Malibu).  Who says the margins on the 21 VLX are worse than those other boats?  We don't know that.  I suspect they are similar.  

[85 Barefoot]

Just now, IXFE said:

You realize that molds have a useful life, right?  They are constantly rotating in new molds and getting rid of old ones.

As for only having "a couple molds for each model" well that depends on the model.  They have way more than "a couple" for the big sellers (e.g. 23 LSV, 22 VLX, A22, etc.).  When I was there in May they told us they had seven molds for the 23 alone.  It wasn't always that way... they added more molds as demand for the 23 grew beyond their initial expectations. The point is... they add new molds all the time.  Big deal.  

 Sure molds are expensive, but what's your point here with molds as it relates to the 21 VLX?  

I think your entire capacity argument is flawed.  You're saying that Malibu's capacity is fixed at 3,500 boats (you believe this because of ONE data point... your boat) and that by adding the 21 VLX to the lineup it's going to reduce the sale of boats like the 23 LSV, 24 MXZ, M235, etc.  Come on man... really?? 

Yep...but I wouldn't say its "constant" rotation of new molds.  But sure I realize they don't last forever.  But I also have no idea where they're keeping them if they have more than I've observed.  Some are up at the trailer area, yes, but did you see an extra square inch on the factory floor?  I didn't.

I can't agree with your paraphrasing of my position, as I don't think their capacity is permanently fixed, but I will absolutely stand by my prediction that 21 VLX sales will cannibalize higher priced offerings (which, by definition, every other Malibu model is).

[DarkSide]

One other note on capacity, remember the factory only works 4 days a week except in VERY busy times like just before boat show season.  So adding a 5th workday, boom instant capacity.