CES 2024: Brunswick CEO talks luxury boat price incentives
Brunswick Corporation (BC), one of the world's leading boating brands, unveiled a number of new products at the 2024 Consumer Electronics Show (CES), including what it is calling Autonomy, Connectivity, Electrification, and Shared Access technologies which allow for an easier way for consumers to dock their boats.
The manufacturer also unveiled new, high-tech aquatic vehicles with large price tags. Yahoo Finance Reporter Pras Subramanian and Brunswick Corp. CEO Dave Foulkes join the Live show to discuss how the company deals with consumer-product replenishment for their high-tech luxury vehicles.
"A portion of our customers are certainly sensitive to retail financing rates, and we're actually introducing promotional financing and other ways to encourage people to buy in that segment of the market," Foulkes states. "Some of the larger boats are more cash buyers, so they're somewhat less sensitive. But if you look more broadly, we certainly introduced incentives through the back half of last year, including discounting and promotional activities."
Click here to view more of Yahoo Finance's coverage of CES 2024 this week, or you can watch this full episode of Yahoo Finance Live here.
Editor's note: This article was written by Nicholas Jacobino.
Video Transcript
BRAD SMITH: Dave, the replenishment rate of boats. I mean, these look amazing, and I want one. But I imagine when I get one, I probably won't be able to get another one for a while or need to even update the one that I do have for a while as well. So how does that look, especially when you're thinking about a consumer environment where, sure, the luxury end, that might be holding up, but the people who are just trying to save up or finance one of these amazing watercrafts, should I call it that, are trying to figure out, is this financeable? Is this a purchase that I can make right now comfortably?
DAVE FOULKES: So you're exactly right. A portion of our customers are certainly sensitive to retail financing rates. And we're actually introducing promotional financing and other ways to encourage people to buy in that segment of the market. Some of the larger boats are more cash buyers, so they're somewhat less sensitive.
But if you look more broadly, we certainly introduced incentives through the back half of last year, including discounting, promotional activities. We're expanding those as we need to. But last year, the retail market in the US was down about 5% versus previous year. So not really down a lot. And we're expecting next year to be essentially flat to this year, given that the consumer environment is essentially somewhat unchanged at least in the first half with the potential hopefully for some rate reductions in the second half.
PRAS SUBRAMANIAN: So Dave, you're talking about prices coming down a little bit or activity coming down a bit, but these really expensive boats. One way to deal with that is with the Freedom Boating Club, right? That's your subscription-based service for people that want to go to the boating dock for a day, get a boat. How is that business going? And is that where you see the future of electrification, is from the day-to-day type of activities?
DAVE FOULKES: Freedom Boat Club, as you said, Pras, is a subscription model. We have 400 locations worldwide, a lot in the US, Canada, 40 in Europe, now eight in Australia. So it is a model, a bit like a golf club. You join with a fee and then you pay monthly dues. You have access to boats in your area, but also you have reciprocal access to a lot of other areas, even other countries.
It's a very convenient model if you don't want to deal with the ownership experience. And interestingly, of course, because you're not owning the boat, you're not subject to these financing rate increases that we saw over the last year. So the stability of pricing in Freedom has been much more stable. And so it's continuing to grow very strongly.
