how come so few automakers VS boat makers?

given autos is also a larger market?

Is half of that lots of boat yards turning large fortunes into smaller fortunes, then stepping aside to allow the next generation to do the same?

Reminds me of story of my dad turning down opportunity to get into Winnebago (motor-homes, or "house cars" as they call them in jolly old England).

He said the biz model was great, the people were even better and he was sure SOMEONE was going to build a lot of Motorhomes.....but he thought the "big 3" US auto makers would step in and play monopoly as not only were their operations bigger, they were also extremely good at "customizing" on an assembly line. They could make 3,000 cars of same model, none of which were identical, and do it fast and cheap.

Well, turns out he was wrong and Winnebago went on to get huge...but I think his reasoning is still valid.

 

You mean his reasoning was and still is wrong? There are some fairly large boat manufacturers, but the market is for more models than the car market has. Therefore, most operations are at least semi-custom. Cars have much tighter limitations in size and construction than boats. You can't just build a 48 foot long car that is 16 feet wide.

 

I think your Dad was correct.
It was only yesterday that we were bailing out auto makers!
^$&$&#!! really.
I never heard of the government bailing out marine or winnebego manufactures. Also when I consider building costs and retail prices (P&L),
I think its a pretty equal medium. I think (some) auto makers produce a lesser product then the others. The stretch limo is doing well. but Gonzo's right,
we are limited to the lines painted on the road.

 

First, there are quite a few automakers selling in the US if you include all the import brands.

The reason there are not more automakers, particularly very small ones, might have something to do with the cost of developing cars and trucks which are competitive and meet government safety and emission regulations. I used to lead the product engineering for the initial design and engineering phase of new vehicle programs. Typical investment for engineering and plant tooling for a new car or light truck program runs from around $400,000,000 to over $2,000,000,000. That's 400 million dollars to 2 billion dollars. And only one program. How much in total is invested worldwide in new recreational boats worldwide each year?

On the other hand look at what you get in a car or light truck for it's price, and then look at what you get in a new boat for the same price.

 

Great question DC!
I wish I new the answer, but I don't.
(and I apologies for that.)
I'm sure the cost are well over-the-top as well.

"How much in total is invested worldwide in new recreational boats worldwide each year?"

At first I thought to myself...
cars are simpler due to the invention of the wheel and ground below us.
and I realize techno-wise that's not true. however being on the water has little forgiveness, and then I thought... you can't put air bags on a boat! and then I thought why not? why aren't there collision float air bags on boats?
Stop the whole thing from sinking to the bottom! Another million dollar idea.

I follow you DC, thankfully a lot of work has gone into the auto.
and I would love to buy a day sailer some day.(the auto of boats if you will.)

"Is half of that lots of boat yards turning large fortunes into smaller fortunes, then stepping aside to allow the next generation to do the same?"
I think thats exactly it, you come up with a design that exceeds all others at an acceptable cost. 'Are they making room?", hopefully they don't have a choice in the long run. I'm not big on monopolies. However I believe they (Big 3) are in some ways unstoppable. ie; a bial-out.

It's an interesting question. are boats a niche market?
I think so.

 

The answer to this question is not hidden in high science but in high finance. DC hit it exactly and starting with a political cloud fogging the brain is a sure way to get it wrong.

 

The differences are, IMO and as stated:

Entry to the market is much higher for automobiles for mass production;

More regulatory requirements for mass produced autos than boats;

There is a more established financial market for the financing of autos than for boats, just about all financial institutions finance cars. Portfolio lenders such as credit unions will be more likely to make a boat loan more on a personal basis than a collateral basis. This makes buying autos easier to a broader market.

There are small manufactures of wheeled vehicles, like dune buggies and so long as they have limited production the regulatory issues will not apply.

So, just about anyone with 20K can build an aluminum bass boat in a garage/shop, without limitations to the number built or sold. That ease of entry to a market increases the competition and as mentioned, the variations of products offer opportunitites to niche markets.

 

In addition to Gonzo's and DC's comments, some random observations-

1. Petrocars were a revolution in over the road travel more so than petroboats because they basically skipped the steam powered phase. Boat builders had a chance to adapt to power via steam.

2. Economies of scale were more significant in the auto business.

3. All the surviving US automakers came from a smallish area in the US where serendipity had permitted enormous growth rates and total expansion.

4. Boat builders generally didn't succeed in obtaining patent protection the way automakers did.

5. Big auto/oil/rubber worked together to steal market share from train/coal. This also encouraged the cozy relationships that worked to bar new competition. There was no reason for shipping interests to conspire in this way. Ford and GM didn't start out as carriage companies or bicycle makers, they were new and they took their market from existing tech. Boat builders just added engines, same companies as before. Basically, venture capital ignored the boat building business.

6. There isn't a car design forum.


It was just a strange mix of circumstances that provided an enormous inrush of capital and enabled a few companies to expand fast enough to absorb all of it for a long period of time.

I do find it a bit odd that no big marine motor maker has gotten into the boat building business and tried to create its own outlet for its motors. Why can't you buy an Evinrude pontoon boat or Mercury bass boat or a Tohatsu dingy? Dilutes their capital too much?

On the other hand - how many car makers, truck makers, motorcycle makers are there in the North America. How many outboard mfgs, stern drive mfgs, marine gas and diesel mfgs in North America? Maybe the wrong comparison to start with. Long term, the economies of scale problem would seem to be the one that has hampered expansion minded boat builders the most. That might be changing.

 

Incorrect. You can buy a Mercury bass boat, though it won't have a Mercury brand. At one time you could probably buy a pontoon boat built the by same company which built Evinrude motors.

In the 1980's and 1990's there was a tremendous amount of consolidation in the recreational boating industry. Boatbuilders consolidated, and outboard engine manufactuers purchased boatbuilders.

Brunswick Corporation builds Mercury outboards and Mercruiser I/Os and inboards. They also build boats with twenty or so different brands, some of which are among the largest in the industry. http://www.brunswick.com/brands/marine-boats/index.php

OMC, manufacturers of Evinrude and Johnson outboards until OMC was liquidated, also purchased a number of boat brands. At one time OMC built and sold boats under the Evinrude and Johnson brands including the "Sweet Sixteen" tri-hull.

Chrysler built both outboards and boats until the late 1970's or early 1980's.

 

Are we excluding the custom automotive shop? I think that we are focusing on the BIG 3, 4 , or 5 or ..... and forgetting about all custom builders that might be more of an equivalent to a custom boatyard. Just food for thought. Also look at the number of custom bike shops. Technically, not an auto, but fulfills a similar niche.

 

I was thinking of Chrysler when I wrote that. So why didn't it work?

There is still a vast difference between the level of integration in most of those instances. More of a partnering arrangement than the sort of captive boat builder I was thinking of. I would have thought that foreknowledge of the new systems would have given an in house operator enough of a jump.

Then again, I just went and fiddled around on Bayliner's website. I expected to see OB engine options from all the major OB makers, but no, just merc, and no engine delete option either. Sea Ray also. So I guess my presumption was wrong.

 

A volume automobile production plants builds 30 to 50 cars per hour, and preferably runs two or three shifts per day. I don't think there are many shops building that many boats per week. There are economies of scale.

As far as I'm aware the Chrysler outboard and boat businesses were separate from the car and truck business, so I don't think Chrysler had an particular advantage in the boat business from a design or manufacturing perspective.

 

Getting a boat to market legally is a LOT easier in the US than getting a car to the market legally. The automotive industry, from an outsider's point of view, is covered in a political fog. Heck, just getting permitted to build boat trailers is a nightmare in this country!

This tends to keep the little guys at bay that could someday grow into competing car builders.

Then, because there are no little builders, there is no industry set up to supply parts for them. Makes it even tougher.

Least thats the way I see it.

-jim lee

 

Take a bathtub, hang an outboard on it and you have a boat. Put some striping on and somebody might even buy it.

Making a car is infinitely more difficult, getting it approved is nearly impossible.

 

Some very good reasons given here.

Part of my job at USCG HQ Boating Safety was tracking boat builders/manufacturers. So I probably have talked to 50% or more of the boat builders in the US.

1. Anyone can hang out their shingle and say "I'm a boat builder". The only requirement is to get a Manufacturer ID Code from the Coast Guard. Jeez, after I retired they even gave me one. LOL

2. Everybody (and I mean everybody) thinks they can build a better boat.

3. Boat designs are very regional depending on the local water and weather, and the uses for the boat.

4. There is an infinite number of types of boats/yachts/vessels.

Last but not least the startup costs are far less than for building cars. That's why custom cars cost so much, whereas you probably can't sell a custom jon boat for $100,000, not when you can go to another builder and buy essentially the same boat for a couple grand. But a custom car? People still buy them, even when they cost an arm and a leg.