All posts by Jeff

Have Sterndrives Run Their Course?

Is the Sterndrive at the End of its Product Life?

The boating industry has relied on small evolutionary changes to justify the higher cost of new boats. This has been a losing struggle. Sterndrive boat sales, the heart of the industry, have dropped to 20% of their 1996 levels and are recovering poorly, even with the improving economy.

Sport Jet Sales Chart

Example of disruptive innovation in an otherwise flat mature boat market. This is the SportJet boat segment, starting in 1991.

Innovative Propulsion Fuels Sales Booms
Historically, the industry’s sales booms have been fueled by disruptive propulsion innovations, like outboards, sterndrives, and jets. These innovations enabled boats with new features and benefits to meet the unsatisfied needs of consumers.

For example, look at how the market has rewarded disruptive innovations in an otherwise flat mature market.  This is the SportJet-boat segment, starting in 1991.

Consumer Demand  The opportunity is now available to do this again on a larger scale.  JD Power surveys have long shown unsatisfied demands for improved performance, fuel-economy, operating costs, safety, and ease of operation, which have not been met by the industry’s evolutionary innovations. Commercial markets are looking for better sustainability and reduced operating costs.

The Basis for New Products – IntelliJet uniquely meets these demands by incorporating electronic control of power transmission and other methods commonly used in aircraft and autos.  Like the SportJet, IntelliJet is the basis for new products with much more consumer value than used boats or conventional new boats.

With the economy rising out of the recession, this IntelliJet disruptive innovation is poised to enable the sale of a lot of motors and boats. Remember that sterndrive boat sales peaked at 150,000 in a pattern similar to the one above six years after the end of the last big recession of 1982.

This is a concrete example of an immediate opportunity to innovate.

Too Many Used Recreational Boats

Many boat manufacturers have the same problems:

  • Excess capacity,
  • High mfg costs,
  • Too many used boats, and
  • Too much cutthroat competition for new boat sales by
  • Too many competitors.  

The following slide from the 2013 Boating Industry State of the Industry webinar shows the scope of the problem:

Slide from the Boating Industry and Marine Retailers of the Americas MDCE Webinar 2012 showing New 15+ Powerboat sales

The only path to significant profitability is a proprietary advantage in a class of boats that has no direct competitors, a class of boats that offers unique benefits that are prized by a significant segment of boat buyers.  

IntelliJet offers a unique combination of performance, fuel economy, safety, sustainability, reliability, and convenience, which answer needs cataloged in JD Power and industry surveys.

IntelliJet Marine, Inc. logo