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  Mercury Outboards increase market share

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Author Topic:   Mercury Outboards increase market share
jimh posted 10-25-2001 12:52 AM ET (US)   Profile for jimh   Send Email to jimh  
In the course of some statements made relating to the recent acquisition of Hattaras Yachts by Brunswick from Genmar Holdings, Brunswick stated it had a 48% market share of the U.S. outboard engine mark. The also stated that their market share had increased about ten percent in the last year.

See their press releases for more details, available online at
http://www.brunswick.com/

jimh posted 10-25-2001 01:01 AM ET (US)     Profile for jimh  Send Email to jimh     
Also in the press release was news that the SeaRay outboard manufacturing plant in Phoenix was being closed. The plant employed about 300 people.

bigz posted 10-25-2001 07:33 AM ET (US)     Profile for bigz    
Brunswick has to be a little on edge with Bombardier J&E's "rebirth" this quickly. Since if you recall the soothsayers including one of our very own and of course Mr. Buckley said it wouldn't/couldn't happen in 2001.

Gained 10% MS in the outboard segment and sales were off 12 to 13% interesting! Fourth Quarter is going to be bleak for Mercury I think. Yamaha and Honda have said they have had a pretty good year so far. My opinion is that whatever Buckley and his bean counters use to determine market share might be a bit tilted.

This is where they all get their research money JimH --- "Operating margins were 9.6 percent compared with 17.3 percent for the same quarter last year" current Mercury statement --- not "Jet Skis" in fact there sales have been on a steady decline for the past couple of years according to the industry. Outboards are a very profitable business even when the market is mush!

I also might add based on second quarter results Bombardier I believe announced a 23% increase in their marine business saying just about all of it could be contributed to the purchase of OMC. Most folks didn't realize just how substantial the inventory was as of Jan 2001 at OMC, they had already built for the dealer Spring floor plans this in itself kept a lot of dealers with motors at least through the second half of the year and of course the parts area never did shut down except a short period during the bankruptcy proceedings.

jbtaz posted 10-25-2001 07:59 AM ET (US)     Profile for jbtaz  Send Email to jbtaz     
You say you think Mercury is nervous about J&E's rebirth. I seriously doubt it seriously. First, the brand is tainted in the buys mind and consumers are leery of buying a brand that was out of business. (I know this from many friends working in the boat and engine retail end) Second, between Yamaha and Mercury there's no real room for a strong player to steal signifigant market share. They may become a niche player however. But I really doubt Mercury's at all concerned.
bigz posted 10-25-2001 08:31 AM ET (US)     Profile for bigz    
Jbtaz to each his own opinion.

The fact remains most folks (average boat consumer) were not aware of the Ficht problems and or even the bankruptcy of OMC (of course I might add that were not aware of the 200/225 Optimax or the Yamaha HPDI engine problems either). When they walk into this winters boat shows there will be J&E outboards on display ready to purchase.

Very few dealers dropped the J&E line contrary to some people, the dealers did take on primarily Yamaha and Suzuki with Mercury picking off a few more, as secondary lines this past season (even Honda added a few dealers). Due to the economy no one gained in real terms much in the way of a major market share shift.

Here is what Buckley had to say in April 2001 about Bombardier J&E situation ---

“They are a very capable company (Bombardier) but they are not an engine company. And sometimes you wonder what kind of game they are up to when they are not in the US. They are not in engines, and (yet) they are going to start a company that has a history of bad performance and jaundice brands. They are going to start it in a year’s time and take on the world’s best engine manufactures,” Buckley said. “It is going to be a job for Jesus, and I hope they bring their sandals.” http://www.theboatingnews.com/0301_eyerdam_retr.htm

Don't hear much these days from Brunswick on the current situation do we now, about the J&E brands and Bombardier's ability to move fast so that they can regain lost market share and maintain what they did continue hold on to in 2001 --- the economic slow down really helped them tremendously from loosing "hard" market share.

JimH, think your right Brunswick doesn't sell Jet Ski craft. However, Mercury sells the large motors for the Jet Doo ski boats built by Bombardier. Brunswick and Bombardier signed an exclusive agreement last year on supplying motors for these craft. I beleive they also supply certain motors to other Jet Ski manufactures

jbtaz posted 10-25-2001 08:55 AM ET (US)     Profile for jbtaz  Send Email to jbtaz     
Hey I have no axe to grind with J&E, I've owned a few Johnsons in the past. My old 13 Whaler had a 35hp Johnson. My current whaler and my other boat happens to have Mercurys on them because that's what was available. All are good engines. I also know Bombardier is a good company. At first I thought that Bombardier bought the brands for Ficht technology-to use in their PWC's. I just think it'll be hard to revive J&E back to where they once were in the marketplace. The line is up and running building a very limited number of Evinrudes right now. I heard Johnsons won't be built for awhile.
bigz posted 10-25-2001 09:10 AM ET (US)     Profile for bigz    
Jbtaz, didn't think you had one, sorry if I came across a tad strong.

Anyway, here is the current information I have received.

I had seen the production schedule when first published 3 weeks ago. At this point according to the Bombardier rep (was in just last week) they are way ahead of schedule on the original production lines and the fact is they have been able to add new lines faster than had been anticipated. Translation yes the 2 strokes are taking somewhat of a back seat to the Ficht line but not by much. Bombardier has already shown the J&E lines I think it was 2 weeks ago at the Italian boat show.

The rep also stated there will be some major announcements forth coming on the 4 stroke situation and smaller engines under 20hp. He indicated that they will be producing the little guys and 4 stokes. Haven't a clue though if the 4 stroke will be truly theirs or another contract deal with one of the Japanese firms branded Johnson or Evinrude.

Kelly posted 10-25-2001 01:44 PM ET (US)     Profile for Kelly  Send Email to Kelly     
bigz,
Do you ever think Bombardier will forge a long term comprehensive alliance with Suzuki? I just think the OMC dealer network, the Suzuki 4 strokes, and big FICHT motors would be a good combination. Kelly
bigz posted 10-25-2001 01:58 PM ET (US)     Profile for bigz    
Kelly at present Bombardier isn't talking at least not to their dealers on the how when and what they have planned for this 4 stroke announcement.

To the best of my knowledge Bombardier either through their own motor division or J&E operations don't have a 4 stroke design/program which they could build themselves. So the speculation is Suzuki or Yamaha.

I might add right now at least the 4 stroke appears to be directed at the smaller under 20 hp engine group. Maybe as far as the upper range the Ficht will be the system of choice.

At least for the short haul we should know with in the next week or so their plans for 2002 on 4 strokes and small engines.

andygere posted 10-25-2001 02:05 PM ET (US)     Profile for andygere  Send Email to andygere     
Bigz, I'm curious about your source of info on the outboard and boating business in general. Is it primarily boatingnews.com/boating-industry.com or do you have other sources? I'm doing a security analysis project for an MBA investments class I'm taking, and I've decided to evaluate Brunswick Corp. for the project. I am particularly interested in industry and manufacturer revenue and earnings forcasts, historical and forcasted market share, and any other relevent industry trends. You seem to have your finger on the pulse of the industry, and I'd appreciate any information you may have.

When I finish (by Monday evening) I'll post my conclusions on the forum.

bigz posted 10-25-2001 02:29 PM ET (US)     Profile for bigz    
Andy you missed Soundings trade only, and I get a bunch of the basic marine dealer publications (left over copies when I bother to pick them up at our marina) in addition I am pretty good friends with three dealers and on talking terms with 3 to 4 others here in NJ and NC.

On the Brunswick situation LHG and I think JimH have a lot of information --

In my case OMC/Bombardier are my chief concern mainly because I have owned a number of Johnson motors and currently have two 225 hp Fichts (also twin 200 hp Yamaha)so have followed this evolving story pretty closely. Including doing quite a bit of research on the Ficht --

Most of the information concerning Brunswick Corp in general you're looking for can be found on the net with a few searches using my search engine of choice "Goggle" I think ---

Again LHG is the man with the Brunswick knowledge --- see if you can't reach him --

Good luck

PS here are a few which might have some material which maybe overlooked ---

http://www.rbbi.com/index.htm

http://www.outboardsales.com/history.htm Mercury history page --

andygere posted 10-25-2001 04:21 PM ET (US)     Profile for andygere  Send Email to andygere     
Bigz,
Thanks for the info. I'll also check with LHG for his source. I consider myself an OMC (Bombardier?) guy, although my old 13 had a Merc on it. Come to think of it, that's why I'm an OMC guy again.

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