Boating Industry

February 2016

Issue link:

Contents of this Issue


Page 25 of 43

26 | Boating Industry | February 2016 [ Big money ] it was a non-issue," he said. Aquatic AV CEO Robert Fils said he can accept losing a short-term competitive advantage based on a favorable exchange rate when the trade- off is a healthier global economy overall. "The rapid rebound of the U.S. dollar has definitely had an impact on our sales, particularly in Europe. But that's a short-term situation," he said. "What's more significant is that the European economy is starting to finally show some movement. It has been down for such a long time, now we're seeing evidence of it picking up steam. That should reduce price sensitivity to some degree, and ultimately result in higher overall volumes." "We are hearing feedback from some of our overseas distributors, who are feeling a bit of margin compression from the currency exchange rate," adds Bennett Marine CEO Charles Sweet. "The reality is we look at pric- ing all the time, and we work with our OEMs and our distributors in any way we can. But in our market segment I would say that pricing issues are driven more by competitive pressures than the exchange rate. For a long time Bennett was alone in the trim tab market, and now we have multiple competitors. It's good for the consumer, since competition drives innova- tion, it drives product quality, and it drives everyone to deliver superior service. There's always going to be margin compression from competi- tion or economic considerations. You have to be prepared to deal with it, whichever way it goes." Of course, the manufacturers most insulated from exchange rate pres- sures are those who have the ability to manufacture locally within their overseas markets, whether through the operation of wholly-owned subsid- iaries or through licensing arrangements. "We manufacture aftermarket products in Europe and sell them through a distributor based in the Netherlands," said Rick Reyenger, CEO of Maryville, Tenn.-based Marine Accessories Corporation. "Because of that, the recent increase in the U.S. dollar hasn't really impacted our sales in Europe at all. In fact, they're up over the previous year. Between Europe, the Middle East and Africa we sell into approximately 18 countries, and it just makes sense for us to manufacture product for that market over there." Dammrich feels that the resistance U.S. exporters have been facing will subside because few American firms compete on price to begin with. "If you're going to export, you can't just jump in and out of the market whenever the exchange rate happens to be in your favor. Your customers need to know that you're there for the long haul, and that you will be there for them through the ups and downs," he said. "There is a lot of data out there which shows that companies that export are more profit- able, they pay higher wages, and they're generally just more successful. So while the stronger dollar might be making it a little harder for American manufacturers in price-sensitive markets right now, the benefits of export- ing are still substantial." NAFTA implications The exchange rate picture grows muddier when we look at goods produced within North America, thanks to the tight economic integration that exists as a result of the North American Free Trade Agreement (NAFTA). Consider this scenario: a marine parts and accessories manufacturer in the U.S. might take advantage of the attractive exchange rate to source raw PHOTOS ON THIS PAGE: CRAIG RITCHIE Even with a strong dollar, U.S. companies reported a successful METS. "If you're going to export, you can't just jump in and out of the market whenever the exchange rate happens to be in your favor. Your customers need to know that you're there for the long haul…" — Thom Dammrich, president, NMMA

Articles in this issue

Links on this page

Archives of this issue

view archives of Boating Industry - February 2016