Issue link: https://read.dmtmag.com/i/316641
PWC BY TOM KAISER SENIOR EDITOR Put your ear to the ground and you might hear a faint rumble that indicates change is afoot. It could be just distant thunder, but judging by fresh data and industry chatter, it could also be a building groundswell that's set to overtake the personal watercraft category. After riding a wave of sales growth throughout 2012 and the beginning of 2013, the PWC category has been hovering at barely positive monthly sales growth, according to Info-Link. That could be set to change, however, as the innovative and affordable Sea-Doo Spark may unleash still-unknown responses from Kawasaki and Yamaha that aim to attract new and younger customers to revive the marine industry's most adrenaline- powered category. SPARK HEARD AROUND THE WORLD Google "Sea-Doo Spark" and you'll get 3.9 million search results. Read any marine trade journal or enthusiast rag, or walk the aisles of your local boat show, and you'll dis- cover that everybody in the industry is talking about the Spark — BRP's new PWC that is the result of CEO José Boisjoli's directive to build two PWC for the price of one. While it's the most attention-getting fea- ture, a shiny starting price of $4,999 isn't the Spark's only trick. It's skinned in bright colors like Bubble Gum and Pineapple, and packed with innovations like its minimalist Exoskel architecture, Ergolock ergonomics and light- recyclable-and-strong Polytec exterior material that were all crucial to meeting Boisjoli's goal. For comparison, Yamaha's best-selling entry- level VX Sport starts at $7,999 and Kawasaki's STX 15F Jet Ski begins at $9,699. Based on exclusive interviews with Pow- ersports Business sister publication Boating Industry, Sea-Doo has captured the attention of competing OEMs Kawasaki and Yamaha, which both suggested they may develop new entry- level PWC models in direct response to BRP. But getting the attention of competitors isn't enough, and Sea-Doo is embarking on a new marketing campaign designed to attract a younger, wider audience to personal watercraft — a category that has seen its average customer age rise to a not-quite-crotchety-but-close 47. PWC SALES IN HOLDING PATTERN Like the rest of the industry, the recession dealt a cruel blow to PWC sales, but growth resumed in early 2012. After approaching 10-percent monthly year-over-year sales growth through- out '12, the category is currently in a holding pattern that may be set to change for the better. Data from Statistical Surveys Inc. shows that Sea-Doo was the only PWC builder to grow its sales in 2013, up a modest 3.2 percent for the year. Sea-Doo currently holds 49.9 percent of the market. During the same period, Yamaha, which owns 40.4 percent of the market, saw its sales decline less than 1 percent. Kawasaki's Jet Ski sales dropped another 10 percent following three successive years of market share declines that saw Team Green's slice of the pie decrease from approximately 15 percent in 2009 to 9.1 percent in 2013. Regional data from Info-Link Technologies shows PWC sales grew in Florida, Michigan, California, New York and much of the Mid- west in 2013, while Texas, New Jersey and much of the southern and Appalachian states saw PWC sales declines over the same period. According to Tim Conder, a senior analyst at Wells Fargo Securities, PWC sales increased 8.1 percent year-over-year in February to 805 units. Conder's report added that inventories remain near historic lows, lead- ing to the prediction that "PWC will likely enjoy low-double-digit growth" throughout the remain- der of 2014. He added that BRP is poised to gain market share, largely due to the expected impact of the Spark. SPARK'S UPCOMING CHALLENGERS While Sea-Doo will enjoy some solitary time in the sun with the Spark after eight years of development, its competitors seem seriously interested in developing their own entry-level models that will challenge the new entrant and, quite possibly, reinvigorate the entire PWC category. At Yamaha, WaterCraft Division Group president Mark Speaks said, "There's no ques- tion in my mind that, if we can drive the price point down on personal watercraft, we would greatly expand the number of people who are able to purchase a personal watercraft and certainly at the same time, also lower the average age of our customers and appeal to a broader segment." He added that any potential new entry- level entrant could help in growing the market and that it is an area the company is currently studying very carefully. "We want to make sure that any product we put the Yamaha name on lives up to our build standards and will contribute to our reputation and will provide our customers with a great experience," he said. "We're not going to bring out anything at a lower price point until we're sure we can accomplish all three of those things." The task of developing such a new model, Speaks said, is a "monumental task" that involves developing new technologies, and building hulls, decks and engines at lower prices than has previously been possible at Yamaha. 22 • May 26, 2014 • Powersports Business www.PowersportsBusiness.com See PWC market, Page 24 Sparking a revival? Entry-level PWC surge may broaden category's appeal Data from Info-Link Technologies shows PWC sales grew in Florida, California, New York and the Midwest in 2013, while Texas, New Jer- sey and most Appalachian states saw sales declines. PWC SALES BY STATE 3,998 2,072 2,220 1,488 1,978 4,945 P22x25-PSB7-PWC.indd 22 5/14/14 2:13 PM