New York boat show faces perfect economic storm
NEW YORK (Reuters) - The New York national boat show is a little less crowded this year.
Almost a thousand boats are spread out across the vast Jacob Javits center on Manhattan's West Side, but the buyers are few and far between.
Tight credit, rising unemployment and Wall Street upheaval created a perfect storm for the $15 billion power boat industry -- new power boat retail sales are forecast to drop 30 percent this year, after a 13 percent decline in 2007, experts say.
"Business is bad," said John Scoglio, president of the Islander Boat Center on New York's Long Island, who said his buyers include teachers, police and firefighters.
"I'm probably doing 50 percent of what I did four years ago," Scoglio said. "The guys who buy from me are not worried about their paycheck but they're worried about their pension."
Even customers with high credit scores are sometimes turned away by banks, he said. A few years ago, 12 banks processed boat loans; now only three do.
Scoglio, who has been in the business 30 years, is pushing for discounts from manufacturers. "They have no choice," he said. "In this financial climate, if they want to sell any kind of volume, they have to get aggressive."
A boat listed for sale at $46,000 would normally retail for about $40,500, he said. Now it goes for $36,500.
SEASON KICK-OFF
Organizers say boating is middle-class recreation: most boaters earn less than $100,000 a year. They are typically people for whom the tradition is handed down from generation to generation.
"We're taking a hit just like every industry," said Ellen Hopkins of the National Marine Manufacturers Association. Sales typically mirror U.S. consumer confidence, but the credit environment is an added wrinkle this year: some dealers, too, have trouble securing credit, she said.
New York's boat show acts as a kick-off to the spring selling season in North America. Visitor traffic is down about 25 percent to 30 percent from last year, said Michael Duffy, who has organized the show since 1991.
Partly as a response to the times, this year includes an Affordability Pavilion to feature boats that can be financed for $250 or less per month. Independent experts help potential buyers figure out what they can afford.
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