posted 07-31-2012 04:43 PM ET (US)     

http://www.tradeonlytoday.com/home/ 521177-brunswick-details-drivers-of-second-quarter-growth

posted 07-31-2012 06:07 PM ET (US)            

Demand apparently has also exceed the capacity of manufacturing. This is not surprising when you are manufacturing three entirely different lines of engine at the 150-HP level, that is, Optimax, FOURSTROKE (not VERADO), and FOURSTROKE VERADO. Mercury's manufacturing capacity has to be split among three disparate types of engine.

There should be proper concern about where sales of the new 150 are coming from. Since the greatest percentage of all Mercury outboard engines are sold on the transom of new boats built by Brunswick's own boat builders or by their boat builder partners that use Mercury exclusively, the growth of the new 150 would, correspondingly, seem to be coming from loss of sales of other Mercury models. With three models of 150-HP engine there was bound to be some cannibalism among the models.

posted 07-31-2012 08:23 PM ET (US)            

http://www.youtube.com/watch?v=0L74mES-doU&feature=youtu.be

posted 08-01-2012 12:31 PM ET (US)            

With external sales, that is a a sale where Brunswick's Mercury operation sells an engine to a business that is not part of Brunswick, the cost of goods sold or the gross margin is not precisely known. The margins are usually reported by the corporation in terms of a whole business unit, say "Mercury Marine", and not by particular models of outboard engine.

In the past in the outboard engine business we have been given a glimpse into the complexity of pricing of the product to dealers and boat builders. You should recall that several groups of boat builders formed coalitions and brought legal action against Mercury for their methods of pricing outboard engines. See, for example, my articles on that topic at

http://continuouswave.com/whaler/reference/history/brunswick.html

From these lawsuits we learned that there were complex price structures in place, and discounts were often based on both volume and exclusivity in the sale of Mercury outboards to dealers and boat builders.

posted 08-01-2012 12:41 PM ET (US)            

When Mercury bought themselves a share of the aluminum boat market by buying established brands like CRESTLINER, they had a problem fitting their VERADO engines on the transoms due to the size and weight. The aluminum boat transoms were not sufficiently strong to handle 700-lbs of outboard on a 17-foot boat. Mercury had to relent on their usual policy of only selling boats with a mandatory tie-in sale of a Mercury outboard for CRESTLINER.

posted 08-01-2012 01:00 PM ET (US)         

Newt - Your dealer knows what he is doing. Why buy a relatively noisy, overpriced, old throwback 2-stroke engine, with a block and lower unit dating to 1990 or earlier, when you can buy a comletely brand new modern outboard platform, with forward looking 4-stroke EFI large cube capacity and including new gearcase technology, for less money? Anybody can figure that one out.

Mercury (and probably Yamaha, Honda and Suzuki also) can sell for lower cost because they are twenty times the size of Evinrude, with greater R & D budgets, and can source materials and manufacture for less because of large volume. Optimax engines alone, a small fraction of Mercury sales, outsells Evinrude's total production. And they don't even make Optimax below 75HP.

posted 08-01-2012 02:17 PM ET (US)            

quote:

---

The popularity of the company’s new 150-hp 4-strokes was unexpected, McCoy said.

“I hate to use too many adjectives, but demand for the new 150 has dramatically exceeded our expectations,” McCoy told investors.

---

posted 08-01-2012 06:47 PM ET (US)            

This shows me that you miss the bigger picture. Regarding internal combustion engine technology, BRP has far greater R&D effort than Mercury. As far as internal combustion engines go Mercury only sells outboard motors. The parent company also sells bowling balls and exercise machines. BRP sells outboard motors, Rotax aircraft engines, snowmobiles, Can-Am roadsters and off-road vehicles, personal water craft and boats. They are far more focused than Brunswick and their R&D efforts can be shared amongst the divisions. Not so with Brunsick. There is no technology overlap between bowling balls, excercise machines and outboard motors.

posted 08-01-2012 07:32 PM ET (US)         

Since big Bombardier unloaded BRP, Bain Capital has now been stuck with BRP/Evinrude for 10 years, and can't get rid of it. Their announced, original intention was to flip it (take it public) for a profit after 5, but there is nothing of interest to other would be investors. Thanks to Bain, it's balance sheet ridden with debt in order to pay a $500,000,000 dividend to Bain's investors, the Bombardier family, and the pension fund investors. I, for one, am glad that Mercury doesn't lower it's standards to produce those ridiculous looking CanAm bikes, PWC's and hideous jet boats. That's not much of a business model selling stuff like that. Give me a Bayliner over one of those SeaDoo jet boats anyday.

posted 08-02-2012 12:00 PM ET (US)            

The comment was made the Mercury was getting "killed" in this market segment. Mercury was still outselling all brands combined except Yamaha in this category. When Mercury designed this motor they stated that the goal was to beat the Yamaha in every category. Obviously they were still selling a lot of 150's but saw an opportunity for increased market share by competing more directectly with the Yamaha. No mention of other brands being any competetion were made.

A comment was made about problems meeting emmision requirements with DFI 2-storkes. I believe this problem is not unique to Mercury. I believe that BRP has the same issues on their larger outboards to some extent.

posted 08-02-2012 04:40 PM ET (US)            

My statement about Mercury's market share in re-power in the 150-HP range is based on reports from users here. I can't recall any instances of a 150-HP OptiMax re-powers, and I can only think of one instance of a 150-HP VERADO repower. Most of the re-powers reported here have been with other brands. I have not tried to count up numbers, but it does not take a big number to be larger than zero or one.

As I have repeatedly stated, I think the new motor is a nice motor. I think it will sell well. Almost all of the disagreement that seems to come to a boil between me and a few readers on this topic comes down to whether or not I think this new motor represents technical progression or regression compared to the VERADO, whether or not I think demand for the new motor is "huge", and now, apparently whether or not I think it is "the most durable 150hp FourStroke outboard the world has ever seen."

To be clear, I think the new outboard engine represents technical regression from the VERADO, I have not seen any information on sales volume so I can't accept the characterization of its sales numbers as "huge," and I am skeptical that the engine has met all the criteria a reasonable person would require for rating as "the most durable 150hp FourStroke outboard the world has ever seen."

posted 08-02-2012 07:08 PM ET (US)            

As evidenced by:

In other threads refering to the E-TEC as modern and technologically advanced but refering to this decade newer design as technical regression. Simpler, yes, but it is the newest latest and greatest...

Making up ficticious numbers when wrinting about Mercury product in mulitple threads including your 700lb figure in this thread. (190lb over the weight of a Verado sutible for the said boat would actually weigh)

Refering to one buyer's experience as "buyers" leading readers to believe some widespread deficiency exists.

posted 08-02-2012 09:26 PM ET (US)            

The "700-lbs" is the weight of an L6 VERADO. These very large and very heavy outboard engines are hopelessly out of place on the transom of riveted aluminum fishing boats. Brunswick had to redesign the transoms of their new aluminum boat brands in order to make them capable of handling the weight of the VERADO. You can see this easily in the external braces they had to add--to rivet on--to make the transom structure capable of holding that kind of weight.

I would be glad to discuss the E-TEC in another thread. I find it confusing when we begin to pollute these Mercury threads with all sorts of claims and comparisons with competitor engines. Let's just stick to Mercury's new 150-HP FOURSTROKE (not VERADO), if you don't mind.

Exactly what is required to qualify me as a "neutral" observer? Do I have to endorse and embrace every claim made by Mercury and L H G about this engine? Again, the only dispute is confined to:

--when the new engine is compared to its predecessor, the VERADO, is it an example of progression in technology or regression?

--is demand for the new engine "huge"?

--is the new engine the "the most durable 150hp FourStroke outboard the world has ever seen"?

Again, I tell you:

--the new engine is regressive in its technology compared to the VERADO

--demand for the new engine appears strong, but we have no numbers and no basis to characterize its sales volume as "huge"

--the new engine has already suffered rather profound failure in field service and raises skepticism of the claim by Mercury that it is "the most durable 150hp FourStroke outboard the world has ever seen."

posted 08-02-2012 10:14 PM ET (US)            

I get a chuckle out of this. If you hit the the bullseye (high power to weight ratio, low noise, reliability, customer convenience, and price) the first time, you don't need to come out with "new" platforms. Moreover, commonality between old and new (that is not coming out with "new" platforms because you haven't hit the target means that your service network for relatively low volume product doesn't have to keep getting new training on whole new platforms and buying more specialized tools to service the ever expanding number of new platforms to be supported). Creating "new" platforms to add to existing platforms because the manufacturer didn't hit the target the first time raises the costs of the service network and ultimately the cost ownership for us customers.

I'm not sure how an EFI SOHC 4-cylinder, 4-stroke making 50 HP per liter is a new design. I had an EFI SOHC 4-cylinder, 4-stroke making 58 HP per liter with more stringent emission controls in a Volkswagen back in 1986.

Don't take this the wrong way, I think Mercury took a step in the right direction with this motor. But they were just a good 10 years late in doing so. They should have done this motor before the Verado 150. If they had, they probably wouldn't have done the Verado 150. I think they were forced into it by the weaknesses in their existing 150 HP offerings.

For all the "demand" and claimed success, I'm still waiting to see one here. I don't think we have a big market for Mercury outboards here so it may be a while.

posted 08-03-2012 08:33 AM ET (US)            

quote:

---

"All outboard engine manufacturers except Evinrude have brought out complelety new engine platforms..."

---

This statement is not true. If you look at the engines of Honda and Suzuki you see that they have been making incremental improvements in their basic four-cycle engine designs. I suspect Yamaha has followed the same course. You have not seen Honda, for example, introduce an engine with supercharging and then, eight years later, introduce a different model at the same horsepower without supercharging. Honda engines have undergone continual improvement in the last ten years, with incremental improvements being added. Suzuki has done the same. They have changed some components to improve their engines. For example, they may have changed a intake manifold to a composite construction from a cast aluminum construction, but they did not fundamentally change the design. You do not see Honda or Suzuki making three completely different engines for the same horsepower rating, with each of the three engine based on completely different engine blocks and with completely different internal parts.

In any case, there is nothing wrong with using a proven component design for a long time. General Motors has been using the same engine blocks for decades in their trucks and cars. Of course, they have made incremental improvements in the products continually over time, but they still use the fundamental engine block design from 30 or 40 years ago. As Peter said, when you have a good design, there is no reason not to keep using it.

posted 08-03-2012 01:19 PM ET (US)            

Mounting an outboard motor to a transom is an old problem. I recall that when the VERADO came out it used a "new" method, but, upon some research, a 40-year-old patent seemed to describe the same approach.

posted 08-03-2012 01:38 PM ET (US)            

http://www.mercurymarine.com/engines/outboards/fourstrokes/150/

Sometimes simple is best we have heard that over our lives time after time. In this case with the 150 Four Stroke that could not be more true. The whole supercharger thing sounds more than what is required I never really understood that design when other companies that were ahead of Mercury in the four cycle engine were not using them. It seems they have got the message now. The engine will likely evolve to the Verado size motors and these high priced luxury motor will be a thing of the past over several years. Its a little early because they have the one motor only at this time and it still needs some more time out in the field imo but I would bet that they are already testing larger models for shipping in the next year or two. 200-250-300.

Remember! Yamaha has those size models available right now as we speak tested and true. V6 variable timing V8 power in a V6 in fact all the 225-300 are the same weight 585lbs! darn good for a four stroke motor in the V6 range. They are very expensive as we know but are really really good engines.

http://www.yamahaoutboards.com/outboards/V6-Offshore-4_2L/overview

There is no doubt in my mind that Mercury is trying to compete with this model eventually. The 150 was the start but wait for it and the larger models will soon be talk.

posted 08-03-2012 08:50 PM ET (US)            

The new Mercury 200 or whatever they might come out with would be interesting.

posted 08-06-2012 09:10 PM ET (US)            

Am I concerned or offended if Brunswick's PR department speaks in hyperbole? No, I worry more about the sky falling.

posted 08-07-2012 02:14 PM ET (US)            

quote:

---

you turn the key it starts, push the throttle and it goes.

---

I love it that made my day!

posted 08-07-2012 04:26 PM ET (US)         

A 150 Verado is a 150 Verado. Doesn't everyone know that is a supercharged 4-stroke with DTS? A premium engine.

A 150 Optimax is simply a 150 Optimax. Who here doesn't know that is a 2-stroke DFI, which is based on old 2-stroke blocks and technology, simply with cleaned up emissions to prolong their useful life a little longer?

posted 08-08-2012 12:50 PM ET (US)            

It is really quite transparent. it is Jim's way of writing for SEO (search engine optimization) and to be condescending, patronizing, and just to generally stir the pot.

[starting the timer to see how long it takes for this post to be edited/deleted and/or a pithy response from Jim in the manner described above]

B-

posted 08-08-2012 05:00 PM ET (US)         

At $10,101 for this 150 EFI 4-stroke, it is only $375 more than old 2-stroke DFI technology of the Opitmax 150. Now that is a BARGAIN. No wonder there is a waiting list for these engines.

posted 08-08-2012 07:33 PM ET (US)         

Regarding the Evinrude 200 to 300HP engines, since you care to divert this Mercury discussion to your favorite brand, the huge 200 HO weighs more than the 4-stroke Verado 200. But as magazines have reported, Evinrude cheats on engine weights. We have seen reports where those 200-300HP engines actually weigh at least 550# or more.

posted 08-09-2012 08:53 AM ET (US)            

You may have failed to notice but Mercury does not sell the 2-Star rated Optimax 150 or the 2-Star rated Optimax 225 in California -- one of the largest, if not the largest, markets in the United States. So you might want to go back and revisit your unsubstantiated speculation regarding sales.

Until the 150 FourStroke came along, Mercury had no 3-Star rated 150 HP outboards and that put them in a bind because sales of 2-Star rated Verado 150s and Optimax 150s would have had to be limited to comply with regulations, and not just in California. 3-Star rated 150 HP outboards such as the Evinrude E-TEC 150, Yamaha F150, Honda BF 150 and Suzuki DF 150 have no such problem.

posted 08-09-2012 10:05 AM ET (US)            

"As I said, the 150 Verado, is a bargain."

Yes, the very small price increment to upgrade to Mercury's modern engine, the 150-HP FOURSTROKE VERADO, is a great value compared to the regressive Mercury 150-HP FOURSTROKE (not VERADO). The only drawbacks with the VERADO 150-HP are the weight, the tiny displacement, and the vibration, harshness, and noise (NVH). THe NVH is decent on the small VERADO, but not in the same league with the L6 VERADO or with other modern four-cycle engines.

posted 08-09-2012 10:07 AM ET (US)            

The cost of Evinrude ICON controls is almost nothing if you purchase the engine during one of the many promotions when Evinrude gives you a generous rigging credit.

posted 08-09-2012 04:41 PM ET (US)         

And after peter sold his Whalers in search of another brand, I was afraid he might stop participating also. But it's nice to see him hanging around also.

posted 08-10-2012 12:38 AM ET (US)            

It's just a difference in opinion that's all nothing wrong with that.

Larry likes Mercury big deal!