Engine News from Genmar
 

Ever wonder if there's any thought behind the engines offered by various
manufacturers? Is it always a case of which engine builder is offering the
cheapest deal?

Here's a bit of insight from one of the largest builders in the business:

Begins:
*****************

Several months ago we mailed out an engine questionnaire survey to all Genmar
boat dealers. Since receiving your responses to the survey both Irwin Jacobs
and I have read and analyzed all your comments, preferences and answers to our
questions. Frankly, it was somewhat surprising as to the results but
reinforces the fact that manufacturers need to listen to their dealers.

First of all, it is clear that most dealers voice a clear preference for
certain engines, and 92% of the dealers surveyed said they believe boats sell
engines, not engines sell boats. This confirms earlier data that we received
from a major engine manufacturer that conducted an independent research study
and found that less than 10% of consumers are predisposed to a certain engine
and over 90% of consumers will follow the advice of their dealer in the
selection of an engine to go with their new boat.

Second, almost all of Genmar dealers have taken on a second line of engines as
backup to their primary line over the last couple of years. Most dealers
surveyed stated that it was necessary because of the engine problems that
certain manufacturers have experienced with their new high tech engines and the
dealers' desire to be able to avoid customer service problems while the engine
manufacturer worked to bring their engines to an acceptable level of
reliability and performance.

Third, the reputation of the various engine manufacturers vary widely between
sal****er and freshwater dealers. We found that the Genmar dealer organization
is very aware of performance and reliability characteristics by engine
manufacturer and this has become more important than price in determining which
engine the dealer wants on their Genmar boats.

Fourth, Genmar dealers, made it clear that Genmar should continue to maintain a
business relationship with all the major outboard and sterndrive engine
manufacturers in order to be able to offer to the Genmar dealer the "best
performing" engine each year. With the engine performance issues, both
outboard and sterndrive, that the industry has experienced over the last few
years, it is evident that having the ability to switch to another engine is a
competitive edge that Genmar dealers want to maintain.

The overall results of the dealer survey make it evident that Genmar needs to
continue to give you the engine flexibility you believe is essential to your
individual business. For that reason, Genmar will continue to carry all engine
manufacturers' products corporate-wide and will offer the preferred engine
brands by individual Genmar boat company. In other words, the engine
manufacturers that you are currently being offered through your boat brand will
continue during Model Year 2004 and for the foreseeable future. If your boat
company offers five major outboard brands you can anticipate that this will
continue. If your Genmar boat company is offering you only two brands it is
because the dealer organization for that boat company has stated their
preference through their ordering and that particular dealer organization does
not feel it needs additional engine offerings.

Where a dealer base has indicated a strong preference for multiple engine
offerings, to maintain their competitiveness, Genmar will continue to absorb
the costs of engineering for and carrying the inventory required to support
five different engine lines.

Genmar has negotiated contracts based on projected unit volume with all the
major suppliers. Quite frankly, certain engines cost us more than other
engines and Genmar is not able to continue to absorb the significant price
differential among the engine manufacturers. Beginning January 1, 2004, Genmar
will pass on to the dealer and consumer some of this differential for the
Mercury and MerCruiser brands. Prices on Mercury outboards and MerCruisers
will increase by approximately 3% on all orders received after January 1, 2004.
However, Genmar will hold the pricing on the other primary engines of
preference for this Model Year since potential orders from our dealers on these
engine brands remain strong.

In summary, our Genmar dealers determine the engine choices and we will
continue to offer you the engine selection that you have requested as cost
effectively as we can. Although this varies by Genmar boat company dealer
organization, it does mean that certain Genmar boat companies will continue to
offer all five major outboards and the two major sterndrive engines to their
dealers. Although we would have preferred to offer a more limited engine
selection, I want to emphasize that our final decision is a direct result of
your candid input in answering the dealer survey on engines. Genmar makes
every attempt to listen to our dealers and to make decisions in our mutual best
interests. Thank you for taking the time to fill out the survey and thank you
for your continued loyalty and business.


GEO:abh

Engine News from Genmar
 

Gould 0738 wrote:

Ever wonder if there's any thought behind the engines offered by various
manufacturers? Is it always a case of which engine builder is offering the
cheapest deal?

I dunno about *always* but I bet it's a very common approach. No doubt you have
heard Bob Smith's views on the subject.

***
..... We found that the Genmar dealer organization
is very aware of performance and reliability characteristics by engine
manufacturer and this has become more important than price in determining which
engine the dealer wants on their Genmar boats.

Maybe that's because warranty work is so expensive? Knocks the heck out of profits,
I would think.


..... having the ability to switch to another engine is a
competitive edge that Genmar dealers want to maintain.

Note that engineering considerations were not on the survey. I'm a bit
disappointed. Still it was an interesting read. Thanks, Chuck.

Fair Skies- Doug King

Engine News from Genmar
 

"DSK" wrote in message
...

Note that engineering considerations were not on the survey. I'm a bit
disappointed. Still it was an interesting read. Thanks, Chuck.

Not entirely true, see:

Most dealers
surveyed stated that it was necessary because of the engine problems that
certain manufacturers have experienced with their new high tech engines and
the
dealers' desire to be able to avoid customer service problems while the
engine
manufacturer worked to bring their engines to an acceptable level of
reliability and performance.

This is a clear allusion to FICHT and Optimax issues. Though it seems that
the DFI's are finally about straightened out, the word is already poisoned a
bit.

-W

Engine News from Genmar
 

Thanks for the further explanation. I don't know much about outboards, but did
pick up that warranty is a big issue for the dealers (it doesn't take a genius
to realize that working for free to fix stuf that ought to work right from the
factory is not profitable) and it seems to me that taking boats back to the
dealer for warranty work is also a major bummer for buyers.



Clams Canino wrote:

"DSK" wrote in message
...

Note that engineering considerations were not on the survey. I'm a bit
disappointed. Still it was an interesting read. Thanks, Chuck.

Not entirely true, see:

Most dealers
surveyed stated that it was necessary because of the engine problems that
certain manufacturers have experienced with their new high tech engines and
the
dealers' desire to be able to avoid customer service problems while the
engine
manufacturer worked to bring their engines to an acceptable level of
reliability and performance.

This is a clear allusion to FICHT and Optimax issues. Though it seems that
the DFI's are finally about straightened out, the word is already poisoned a
bit.

-W

Engine News from Genmar
 

Engine News from Genmar
 

Engine News from Genmar
 

Engine News from Genmar
 

Engine News from Genmar
 

So, that means they have an incentive to sell inferior hardware that has a
higher
likelyhood of coming back to visit?

Actually the reverse. The manufacturer controls the quality of the product. The
manufacturer is writing the checks for warranty work, and would rather not be
paying for repairs.