Ordering 2022 malibu’s mid-year 8% surcharge

[Surfbeast21]

On 10/26/2021 at 3:55 PM, jjackkrash said:

Of note, Whaler is not quoting prices, at all.  You can order a boat that might show up in 18 to 24 months, then they tell you the price when its on the truck.   

Of note, No one order a Malibu boat from Whaler 🙄🙄🙄🙄

[wedge88]

20 minutes ago, drewski300 said:

Didn't Malibu post record earnings last year? It's pretty frustrating when companies get used to the higher profits and won't be willing to take a hit while commodities fluctuate. I guess when there is a long waiting list for new boats, they have the upper hand.

I agree.  It frustrates me every time I think about it.  Malibu knows if I walk on the deal, someone will step in and pay the premium so it effects them to no end, right now, but I will remember that play down the road.  My family alone (Parents/Wife and I) have purchased 9 Malibu/Axis boats.  Prices go up 8-12% every year and it's to the point that we went back to Axis because we really can't afford Malibu anymore and we didn't get any more enjoyment out of the Malibu features than we did in the Axis.  I'm an owner of my business and my wife has a very good job.  We love our lake time but with prices / interest rates / gas / insurance and everything related to the sport climbing, alongside everything else in our lives, we may have to find another hobby.

[oldjeep]

10 minutes ago, wedge88 said:

I agree.  It frustrates me every time I think about it.  Malibu knows if I walk on the deal, someone will step in and pay the premium so it effects them to no end, right now, but I will remember that play down the road.  My family alone (Parents/Wife and I) have purchased 9 Malibu/Axis boats.  Prices go up 8-12% every year and it's to the point that we went back to Axis because we really can't afford Malibu anymore and we didn't get any more enjoyment out of the Malibu features than we did in the Axis.  I'm an owner of my business and my wife has a very good job.  We love our lake time but with prices / interest rates / gas / insurance and everything related to the sport climbing, alongside everything else in our lives, we may have to find another hobby.

Option #2 - stop buying new boats and keep the one you have?

[RCorsa]

12 hours ago, The Hulk said:

Well if you think those hikes are bad go buy a boat lift..

We're on 3rd and 4th rounds of 7-9% hikes.. another just did a 24% effective immediately.. word has it another is coming by year end for many.. If u need one i wouldn't wait another second as all mfgs are sold out of capacity for the year and like last year they won't be getting the material qtys they ordered.

With the magnesium crisis Aluminum shortages are going to be worse than last year..  many plants are starting or implanting even further allocation. 

When infrastructure Bill is passed the moon is the limit! 

It will cost nothing they say.. I can't wait to see the first $500k MSRP Malibu!

 

 

Lol but so true.   My 2022 m240 MSRP was $335,000 which if ordered today would be $362,000. Add sales tax (10.1% where we live) and you are at $400,000 already.  

People always talk about buy from your local dealer and Malibu frowns on dealers selling out of state. however this is a good way of price fixing and in times like these dealers Often offer no or minimal discounts if they”own” a territory.  Thus it’s up to consumers to force the issue. Once there is national competition amongst dealers  prices will come down or discounts will go up.  
 

I have a three homes in different areas so I have some options to buy. I spec’d out a m240 for 2022 and was offered 0%, 10%, 21% and 30% off MSRP and the 0% was the dealer I bought my m235 from. Lol.  
 

Point is if Malibu and dealers are going to gauge customers and make record profits customers need to be proactive?   Just my opinion…..

[The Hulk]

49 minutes ago, wedge88 said:

I agree.  It frustrates me every time I think about it.  Malibu knows if I walk on the deal, someone will step in and pay the premium so it effects them to no end, right now, but I will remember that play down the road.  My family alone (Parents/Wife and I) have purchased 9 Malibu/Axis boats.  Prices go up 8-12% every year and it's to the point that we went back to Axis because we really can't afford Malibu anymore and we didn't get any more enjoyment out of the Malibu features than we did in the Axis.  I'm an owner of my business and my wife has a very good job.  We love our lake time but with prices / interest rates / gas / insurance and everything related to the sport climbing, alongside everything else in our lives, we may have to find another hobby.

I agree  and hear ya.. sadly the lakes in general have always been a limited resource, so anything to do with the industry always pretty much goes up in general. Unfortunately COVID came along and opened many folks eyes about the "lifestyle" being around water.. it's kinda got the new IT factor, especially for high net worth folks leaving larger cities or can no longer do as much traveling so they buy a vaca lake house or maybe just a boat.. add the supply shortage and increasing demand and less output prices are skyrocketing.. 

Lakes and industry in general use to cator to say the top 5%.. now it's more the top 1-2% or higher.. depending on your locality and region. 

It is getting ridiculous for sure.. 

[Sparky450]

1 hour ago, drewski300 said:

Didn't Malibu post record earnings last year? It's pretty frustrating when companies get used to the higher profits and won't be willing to take a hit while commodities fluctuate. I guess when there is a long waiting list for new boats, they have the upper hand.

What people don't understand is that as a company, Malibu works off of percentage. If they make 10% per boat and the boat cost them $100,000 to make, they make $10,000.00. If the boat cost them $150,000 to make, then at that same 10%, they make $15,000. Same in any industry. Of course profit is going to go up. Unfortunately, next year labor may catch up with them. I would rather sell product than labor. Product cost are relatively easy to predict.  Labor is not!

[pauley71]

9 minutes ago, Sparky450 said:

What people don't understand is that as a company, Malibu works off of percentage. If they make 10% per boat and the boat cost them $100,000 to make, they make $10,000.00. If the boat cost them $150,000 to make, then at that same 10%, they make $15,000. Same in any industry. Of course profit is going to go up. Unfortunately, next year labor may catch up with them. I would rather sell product than labor. Product cost are relatively easy to predict.  Labor is not!

I would disagree (IMO), they make more on higher MSRP boats.  This is why auto manufacturers are putting focus on high MSRP vehicles (suburbans and trucks) b/c the cost difference to produce isn't that much but the profit is much higher.  The higher the MSRP the more the risk/reward.  A mold is a mold.  Do the finishes cost more between a VLX and M .. yes, but 100k+ more?  Doubt it.

[Sparky450]

9 minutes ago, pauley71 said:

I would disagree (IMO), they make more on higher MSRP boats.  This is why auto manufacturers are putting focus on high MSRP vehicles (suburbans and trucks) b/c the cost difference to produce isn't that much but the profit is much higher.  The higher the MSRP the more the risk/reward.  A mold is a mold.  Do the finishes cost more between a VLX and M .. yes, but 100k+ more?  Doubt it.

It is what it is, If people will still buy then "My hat is off to them" They are a business! They are in it to make money. I am in business for  my self. There is a reason that I do not focus on service and residential. The profit margins are much smaller. I would rather do less work and make more money!! YMMV!!!

[Slayer]

38 minutes ago, pauley71 said:

I would disagree (IMO), they make more on higher MSRP boats.  This is why auto manufacturers are putting focus on high MSRP vehicles (suburbans and trucks) b/c the cost difference to produce isn't that much but the profit is much higher.  The higher the MSRP the more the risk/reward.  A mold is a mold.  Do the finishes cost more between a VLX and M .. yes, but 100k+ more?  Doubt it.

I'm sure @Sparky450can understand and relate to this comment.  

I once had a client who, after reviewing my proposal against that of my competition, say to me "Why is your OH & P over the 15% aggregate allowed by our General Terms & Conditions?  I don't know how I can tell management that I awarded a contract to a bidder whose OH & P is higher than that allowable."  My response to him was that I found a competitive advantage that I knew my competition would be unable to match, so I bid the project accordingly.  I also advised him that it's an open market, competitive situation and regardless of the General Terms & Conditions fee restriction, applicable only to changes in the work, if my number was lower than the competition, I deserve to be awarded the work.

In my industry if you find a way to charge more or reduce cost and be competitive in the market in which your product is delivered, you take advantage of that and do less work and make more money.  FWIW, that dialogue with that individual resulted in 15 years of tremendous growth and profitability with that client and I'll never forget being called out for my price.  It forced me to alter the manner in which I had to represent OH & P with that client in the competitive market so they didn't know what my true estimated fee was for future projects. 

My point @pauley71is that if the manufacturer can charge more and make more money via whatever efficiencies or advantages they have, then God bless them.  Their shareholders are happy and their customers love the product and the value continues to increase in the marketplace.  I would also argue that the difference to produce a car vs a truck is more significant than you may think.  The material costs are greater, the equipment necessary to produce parts for trucks vs those for cars is more expensive, and the infrastructure to support manufacturing of larger and heavier vehicles is more costly.  They make more on those vehicles not only because they cost more to produce, but the buyers want them.  As long as they're competitive with other manufacturers who are in the exact same position, they still make more money.  Just as they do be finding efficiencies in their processes.  

 

     

[JeffK]

41 minutes ago, Slayer said:

I'm sure @Sparky450can understand and relate to this comment.  

I once had a client who, after reviewing my proposal against that of my competition, say to me "Why is your OH & P over the 15% aggregate allowed by our General Terms & Conditions?  I don't know how I can tell management that I awarded a contract to a bidder whose OH & P is higher than that allowable."  My response to him was that I found a competitive advantage that I knew my competition would be unable to match, so I bid the project accordingly.  I also advised him that it's an open market, competitive situation and regardless of the General Terms & Conditions fee restriction, applicable only to changes in the work, if my number was lower than the competition, I deserve to be awarded the work.

In my industry if you find a way to charge more or reduce cost and be competitive in the market in which your product is delivered, you take advantage of that and do less work and make more money.  FWIW, that dialogue with that individual resulted in 15 years of tremendous growth and profitability with that client and I'll never forget being called out for my price.  It forced me to alter the manner in which I had to represent OH & P with that client in the competitive market so they didn't know what my true estimated fee was for future projects. 

My point @pauley71is that if the manufacturer can charge more and make more money via whatever efficiencies or advantages they have, then God bless them.  Their shareholders are happy and their customers love the product and the value continues to increase in the marketplace.  I would also argue that the difference to produce a car vs a truck is more significant than you may think.  The material costs are greater, the equipment necessary to produce parts for trucks vs those for cars is more expensive, and the infrastructure to support manufacturing of larger and heavier vehicles is more costly.  They make more on those vehicles not only because they cost more to produce, but the buyers want them.  As long as they're competitive with other manufacturers who are in the exact same position, they still make more money.  Just as they do be finding efficiencies in their processes.  

 

     

These are good points.  I know that some of the finishes between lines and models can have changes and while each one is not significant by itself, they definitely add up.  Compare the LSV and MXZ models.  There is a definite weight difference in the bow of those boats.  That's driven by more fiberglass matting, more chop, more gelcoat, more HDPE for seat bases, more vinyl for the larger seats, more HDPE for the larger ballast tanks, etc.  That adds up.  The differences between the 23 and 25 are the same way, but also include a larger prop, more seat hardware....  On and on.  Don't get me wrong, that company is definitely making a profit, but that profit fuels innovation and growth, shareholder happiness which equates to more cash for growth, staying relevant in the market, etc.  

Anybody in any industry that requires materials to construct goods should understand the cost hits the last 12-24 months.  Plenty of companies tried to absorb the hit of the material increases and are now completely restructured or out of business.    

Unless you are a mega dealer with 8-10 brands and multiple locations, you aren't rolling in it.  Nobody ever set out to be a dealer and make just enough to put food on the table, not be able to contribute to their retirement, have to pay an arm and a leg for healthcare, only to sell or close the business and become a walmart greeter.  I've seen both sides of it and the majority of the dealerships aren't rolling around in a bed of cash when they get home each night.  

[pauley71]

1 hour ago, Slayer said:

My point @pauley71is that if the manufacturer can charge more and make more money via whatever efficiencies or advantages they have, then God bless them.  Their shareholders are happy and their customers love the product and the value continues to increase in the marketplace.  I would also argue that the difference to produce a car vs a truck is more significant than you may think.  The material costs are greater, the equipment necessary to produce parts for trucks vs those for cars is more expensive, and the infrastructure to support manufacturing of larger and heavier vehicles is more costly.  They make more on those vehicles not only because they cost more to produce, but the buyers want them.  As long as they're competitive with other manufacturers who are in the exact same position, they still make more money.  Just as they do be finding efficiencies in their processes.  

 

     

I don't think we are disagreeing.  I'm simply stating that the profit is significantly higher on a higher MSRP and yes, it does costs more to produce. Its just not a linear 10% or whatever was being stated.  The challenge is there is more demand for lower MSRP so its a numbers game but in a supply constrained market ... Go big or go home (for profit).  This is different for dealers b/c it seems like their cost (for a finished product) are more linear.  They will focus on higher MSRPs as allocations get cut due to production shortages to maximize profit which is reasonable.  This leaves out boaters at the entry level unfortunately.

Back on topic - Just got word I'm a 12/9 build .. ugh 

[The Hulk]

I'd say look more at the total margin vs just higher profits total.. could infact be that margin went down while total profit # went up.. 

Lots of variables to consider..

Heck look at BMW, Benz and other luxury brands (or dealers) tacking on Massive $40-100k surcharges on vehicles if you want them in the near term!  How long before that happens on boats?

Edited October 28, 2021 by The Hulk

[drewski300]

2 hours ago, Sparky450 said:

It is what it is, If people will still buy then "My hat is off to them" They are a business! They are in it to make money. I am in business for  my self. There is a reason that I do not focus on service and residential. The profit margins are much smaller. I would rather do less work and make more money!! YMMV!!!

Everyone runs there business differently. We only do residential remodel because it pays far more than new construction or commercial (in our market). I also know a lumber yard that charges (percentage profit), 10% for new construction, 20% for remodel, 40% for general homeowners. The difference for my business is that someone could find another "Sparky" out of the 5k+ listed electrical contractors in the state means I have to be more cautious on how we price jobs. There are only 3 or 4 wake boat manufacturers who probably collectively raises their prices and as the consumer, we don't have a choice other than to not buy.

It's frustrating when the price of PVC or copper goes up and we have to eat it because the customer simply won't pay more. I would appreciate some middle ground with these boat manufacturers. We all know that the actual increase of COGS to Malibu is less than 8%. Where there is an opportunity I guess......

 

[Slayer]

52 minutes ago, pauley71 said:

I don't think we are disagreeing.  I'm simply stating that the profit is significantly higher on a higher MSRP and yes, it does costs more to produce. Its just not a linear 10% or whatever was being stated.  The challenge is there is more demand for lower MSRP so its a numbers game but in a supply constrained market ... Go big or go home (for profit).  This is different for dealers b/c it seems like their cost (for a finished product) are more linear.  They will focus on higher MSRPs as allocations get cut due to production shortages to maximize profit which is reasonable.  This leaves out boaters at the entry level unfortunately.

Back on topic - Just got word I'm a 12/9 build .. ugh 

Glad to hear you got a 12/9 build.  When did you order?

 

[The Hulk]

2 hours ago, drewski300 said:

We all know that the actual increase of COGS to Malibu is less than 8%. Where there is an opportunity I guess......

@drewski300 Maybe the 8% as a total COGS $amount of the boat total, but i highly suspect they have incurred much much more than 8% COGS increase . Personally I dont know of a single mfg making anything: that has only incurred less than a 8% price hike on COGS, not to mention labor. Shipping on containers is 300-400% increase, Trucking is +30% (excluding fuel increase on top o that) , resins, metals, plastics off the charts. 

Just about anything you want to buy in the world is roughly gone up on average 25-35%... and isnt it very odd the Fed grew the M2 money supply by printing roughly 30% more mula? At the end of the day if your playing a Monopoly board game and i come out of the blue and dump 30% more money on the table, anyone care to guess what inflation in the game will be! 

Another $2T will probably be passed very soon, which in turn will likely add another 10% inflation to the broad economy as it works through the system. What i fear most though is that infrastructure spending HIGHLY inflates various commodities to the moon, so we may see way more than 10% increase on much of the materials used in many mfg industries. Add the energy crisis on much of the raw materials needed for such items and were taking a rocket ship up in price. Uncle Sam doesn't mind outbidding you and overpaying for  commodities because after all its YOUR money! haha

Sadly this 8% surcharge will very QUICKLY become the NEW base price, & right after a further 5-8% will be added within the first month or two of 2022. (keep in mind supply chains and shortages are STILL getting WORSE by they day) - An 8% surcharge wont even come close to covering increases that will happen between now and spring. 

i give it a month or two before Boat dealers copy the auto lots with the "fair market adjustment" price hikes,  you could easily see an additional 10-15% added on top. 

im holding true at roughly 30% price hike from 1.5yrs ago and if another infa-dumb bill passes then  roughly we end up at 40% total hike from 2020 - 2023. 

 

 

 

 

 

 

 

 

 

 

Edited October 28, 2021 by The Hulk

[MadCan]

On 10/24/2021 at 8:44 AM, 18vlxguy said:

I have a 23 LSV on order since Sept 20th with a deposit and got a phone call Friday about the surcharge. I was told if you didn't have a deposit down already it is 8%. In my case because of the deposit it's only 3%. 

 

I was just told the same thing from my dealer for our T250 that we put a deposit on in June. Boats manufactured after Dec 10 will be +8% unless a deposit was made before Oct, in which case its +3%. Bummer.

[RecreationCertified]

On 10/24/2021 at 2:16 PM, NWBU said:

This is an extra mid-year price bump, on top of the ~12% average price increase for the 2022 model year.

NWBU is spot on. had about a 10-12% bump in boats for model year 2022 and all dealers just got hit with another 8% if they didnt have a confirmed order in with your name on it colors, pricing and everyhting picked out. Big bummer. All manufacturers are headed into the same direction. 

[RCorsa]

FYI I’m pretty active in the car market and @The Hulk is spot on.  ADMs (Adjusted Dealer Markups) are coming to boating. Some dealers will spec the boats themselves and bring them in unsold in time for the spring with ADMs tacking on huge amounts to the sticker price.  In cars some Mercedes’ (G wagon with MSRP of around $150,000) dealers are tacking on another $100,000 for final price of $250,000 and idiots are buying them.  One dealer in the Bay Area just tacked on a $300,000 mark up ADM for the new Mercedes GT AMG (MSRP around $350,000) That car remains unsold but even Ford Raptors are selling for $10,000-$20,000 ADM over the $75,000 MSRP and they can’t keep them in stock.   Get ready for an interesting ride…….

[Hemmy]

18 hours ago, pauley71 said:

I don't think we are disagreeing.  I'm simply stating that the profit is significantly higher on a higher MSRP and yes, it does costs more to produce. Its just not a linear 10% or whatever was being stated.  The challenge is there is more demand for lower MSRP so its a numbers game but in a supply constrained market ... Go big or go home (for profit).  This is different for dealers b/c it seems like their cost (for a finished product) are more linear.  They will focus on higher MSRPs as allocations get cut due to production shortages to maximize profit which is reasonable.  This leaves out boaters at the entry level unfortunately.

Back on topic - Just got word I'm a 12/9 build .. ugh 

I agree on the higher MSRP being more profitable.  The last couple RV/boat companies that started up, including Grand Design, Barletta, all started their companies with building the high end units first.  One, there is more profit on the higher end units.  Second, there is typically less demand so the manufacturer can kind of dip their toes in the water.  They can get the high end units started which is far less built units/day and still bring in money to then be able to hire people to be able to ramp up to build the lower end, more affordable units which require selling more and building more per day.  So there is definitely truth to the higher MSRP units being more profitable per unit, at least in my end of the recreational side.

[pauley71]

21 hours ago, Slayer said:

Glad to hear you got a 12/9 build.  When did you order?

 

Its actually 12/6 (oops) - Late July / Early Aug

Edited October 29, 2021 by pauley71

[SirDuke]

I don’t understand how a dealer with no price escalation provision in their signed purchase agreement with a customer can raise prices.  Especially on an order confirmed by the manufacturer.   If I buy an airline ticket and fuel prices go up the airline doesn’t reprice the purchased ticket.    The raise prices on future tickets.  In this case the manufacturer understood their demand and failed to hedge their risk.  Poor decision to raise prices on existing and confirmed orders. 

[Steve B.]

^ This ^ 

My guess is this is gonna end up in court sooner than later.

Steve B.

[RCorsa]

I always find it amusing when I hear stuff like “end up in court” or “see you in court”   I’m not a lawyer although my father was one but I work with a ton of lawyers every day in my business.  “Court” is so damn costly no one would do it for 8% or $20,000 on a $250,000 boat.    Only way to do it is a class action. However, probably not enough owners to even do that.   I wonder if a jury would feel sorry for people buying $250,000 -$350,000 wake boats.  Lol. Sorry just Feeling a little fiery.   
 

 

[Five Cent Worth]

6 hours ago, RCorsa said:

I always find it amusing when I hear stuff like “end up in court” or “see you in court”   I’m not a lawyer although my father was one but I work with a ton of lawyers every day in my business.  “Court” is so damn costly no one would do it for 8% or $20,000 on a $250,000 boat.    Only way to do it is a class action. However, probably not enough owners to even do that.   I wonder if a jury would feel sorry for people buying $250,000 -$350,000 wake boats.  Lol. Sorry just Feeling a little fiery.   
 

 

Right....  They are passing on price increases in contract like all of us are....

[Five Cent Worth]

Guys - my company sells ALOT of material to the Malibu brands.  I don't work on that side of the business - but familiar with it enough.  An 8% price increase is a deal...  As @The Hulk said above, an 8% increase in cost of goods is a fraction of what they are absorbing.  It's completely laughable we are debating this. The inflation we are seeing is not Malibu, GM or CAT's fault...  We should be more upset with others / things we don't debate on this forum...  @The Hulknotes this, too....

And for what it is worth, Malibu is part of a VERY big buying group (https://ibbi.com/).  They have leverage.  I would encourage everyone to see what increase others have passed along...  Here is the other buying group (https://www.ababoats.com/).  You'll find the same here....