Boating Industry

July 2016

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July 2016 | Boating Industry | 13 MARKET INTELLIGENCE Ethanol continues to be a major cause of engine damage and other repair issues, prompting con- cerns about the growing use of E15. That's according to the latest survey of Boat- ing Industry readers. We surveyed readers of our print and digital products about ethanol and other service department challenges in April and May. Respondents were a mix of personnel from dealerships, engine and boat manufacturers, ma- rinas and more. Ethanol damage increasing Ethanol appears to be playing an even bigger role in service issues than it was just a year ago. Eighty-seven percent of our respondents re- ported that their business has seen engine dam- age caused by ethanol. That was up from 73 percent in the same survey in April 2015. While it may be helping drive service depart- ment business, frequent issues run the risk of driving more people out of boating. As one New York boat dealer bluntly put it: "Ethanol makes us money … it sucks for the consumer." A Florida-based manufacturer echoed that: "Ethanol is a boom for the service depart- ments. Ethanol is a HUGE drag on our industry because it negatively affects the customers. It makes them hate boating. It ruins their day, their boat and their entire boating experience." And it is no small problem, either, represent- ing a signifi cant portion of repairs based on what our survey respondents are seeing. Fourteen percent said that ethanol-related problems are responsible for more than half of all engine re- pairs, while 60 percent said it represents at least 20 percent of the repair issues. Those numbers are basically unchanged from 2015. E15 fears From the federal government to engine manu- facturers, there is agreement that E15 – fuel blends of 15 percent ethanol – should not be used in boats or other small engines. Still, there is growing angst over the issue, with 81 percent of survey respondents saying they are "very con- cerned" about the growing use of E15 – up from 74 percent last year. Only 2 percent – down from 7 percent in 2015 – are not concerned at all. Most notably, many respondents raised con- cerns of misfueling at roadside gas stations. Those worries would appear to be well- founded. According to a 2015 BoatUS survey, 40 percent of its members fi ll up their boats at a gas station and other surveys have showed even higher levels. And in a Harris Poll study conducted for the Outdoor Power Equipment Institute earlier this year, 64 percent of American adults said they Ethanol repair issues growing More readers report ethanol-related engine damage CURRENT CONDITIONS April 58.6 March 53.9 FUTURE EXPECTATIONS April 71.6 March 66.1 We also asked readers about their views on the current health of the market as we do every month. In this regular monthly feature, we track the optimism of Boating Industry readers to help us get a read on the industry. A reading of zero means equal numbers of people are ex- periencing or expect growth as contraction, so any number above zero is a positive. April's results indicated continued year- over-year growth for Boating Industry read- ers, and at a signifi cantly better pace than in March. That is in line with industry data that shows an earlier start to the sales season this year with mild weather in much of the country. As a group, respondents are also more optimistic about the future, with more readers calling for growth in the next three months than they were in March. BOATING INDUSTRY INDEX Very concerned 81% Somewhat concerned 17% Not concerned at all 2% How concerned Know a lot 3% Know some 24% Know a little bit 58% Know nothing 15% How much HOW CONCERNED ARE YOU ABOUT THE USE OF E15? HOW MUCH DO YOUR CUSTOMERS KNOW ABOUT ETHANOL? Source: Boating Industry survey, April/May 2016 Source: Boating Industry survey, April/May 2016

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