Issue link: https://read.dmtmag.com/i/459961
February 2015 | Boating Industry | 13 www.BoatingIndustry.com at an automotive engine, it needs torque and power during acceleration phases, but at cruise it doesn't need nearly as much power. So we designed a new engine that's reliable, that's durable, at a continuous high-torque, high-RPM environment. Boating Industry: And we'll continue to see that line of engines grow? PFEIFER: This year we'll come out with new products that are based on the same platform. A V8 for example, that we'll be bringing out in the third quarter of the year, so you'll continue to see new products in this series. Boating Industry: On the outboard side, you've got some new products coming out this year that I know you can't talk about yet, but in general terms what can we expect to see from Mercury? PFEIFER: I'll talk as much as I can without giv- ing away too many specifi cs. First of all, you're going to see new outboard engines [at the Miami International Boat Show]. We're really, really excited about them and we think they're going to be fantastic new introductions for us. (Editor's note: Visit BoatingIndustry.com during the Miami show to see our full report on the new Mercury engines.) We've got a new commercial range of out- board engines that are just being released. It's called a Mercury SeaPro. It's a range of more powerful outboards that are specifi cally designed to meet commercial operator requirements, so that means products that are used on a daily basis with a lot more demanding applications than just a recreational outboard. That's another big move for us in '15. They're not designed for the recreational con- sumer, but a quarter of the market globally is commercial outboard product. Boating Industry: As you look at 2015, what's your outlook for the year? PFEIFER: I'll start by talking about 2014. We started 2014 terribly in terms of the market condi- tions. In the fi rst quarter, GDP in the U.S. shrank and … our sales declined in the fi rst quarter as a result of that. Everybody likes to talk about how terrible the winter was and that had some impact on the economy, but who really knows? The second quarter didn't start that well, but it fi nished extremely well. Our business started to grow really well, especially in the second half of the second quarter, then we got into the third quarter and things really picked up. We had a fantastic third quarter. The year built as it went from being really weak to really strong. As we head into 2015, we are really opti- mistic about the U.S. market. We see continued growth in the U.S. We have some concerns globally. Particularly those concerns are in Eu- rope with continuing economic weakness in some of the core economies like France and Germany. Russia is a big concern with the ruble devaluation being so dramatic. South America has not been great. So it's a balance between a pretty good out- look in the U.S., a pretty good outlook in Asia, but we've got some places that we're concerned about as well. Boating Industry: What do you see as some of the top challenges in 2015 and beyond for the industry? PFEIFER: First of all, the sterndrive segment is a big challenge for the whole industry. The sterndrive segment has been depressed since we went into the global fi nancial crisis, so that's a big challenge. Another challenge is E15 fuel. You see a lot of push for higher levels of ethanol in fuel. We see that as a threat to the marine industry because of what ethanol can do to an engine. If your engine is used everyday for 12 months out of the year like an auto engine that level of ethanol sometimes doesn't have an impact, but in a marine environment that can have a negative impact when engines go two, three months out of the year, sometimes even longer, without being used. Fishing regulations are also a challenge, making sure that regulations are not hinder- ing recreational fi shing. Sometimes commer- cial regulations can hurt recreational fi shing, so we try to get involved to make sure that doesn't happen. Boating Industry: The industry certainly has challenges in the sterndrive segment as you mentioned. What needs to happen to revital- ize that market? PFEIFER: What we need to do to get it revital- ized is we have to start with product. And when I talk about product, I mean engine product and I mean boat product. We as an industry need to make sterndrive power more intuitive – easy to use, easy to operate, not intimidating for a consumer. We need to work on the cost. We need to work on providing compelling new product that provides consumers with features that they really want. Boating Industry: We talked about chal- lenges, but let's take the other side of that. What do you see as some of the opportuni- ties, the things that make you optimistic about the marine industry? PFEIFER: We talk a lot at Mercury about a general equation, which is the benefi t minus the cost of boating equals what a consumer's value is. The benefi t being the enjoyment that somebody gets out of being a boater. The cost is two-fold: how much does it cost to buy the product … and operate the product and how much effort does it take to use your product. The cost side is a big opportunity for the whole industry, in terms of product cost, own- ership cost and effort. If you look at product cost – both boats and engines – we need to develop compelling products that people are really willing to pay for. "I believe 100 percent – and everybody does here – that [the purpose-built sterndrive] was absolutely the right decision not only for Mercury, but also the entire industry."