why are boat motors so expensive?

[strokeoluck]

Re: why are boat motors so expensive?

I know very little about boat motor values. But I know a little about business. And I'm not sure that "because they can" is a good explanation for high motor values. Long term the vast majority of profits get beat down to 15% to 20%. (Yes, I know this will prompt many to add comments about their businesses generating much more than this, but the "vast majority" of businesses see profits in the 15% to 20% range). So, assuming most major motor manufacturers are in this range and STILL charging "high" prices, then I don't think one can chalk it up to "because they can". Then you'd have to look at what they're paying for parts, labor, R&D costs, facilities, cost of capital, marketing, etc., etc. If they were simply scr*wing the customer at will as it relates to prices, viable competitors would certainly come into the market space and get a piece of that pie (leaving aside the last 18 months when few companies have the funds to venture into new market spaces).

 

[jay_merrill]

Re: why are boat motors so expensive?

I don't disagree that the economics of building and selling an outboard reflect all of the above, but I still think there are external factors. To me, this situation is much the same as when Harley Davidson was going broke many years ago. AT the time, HD managed to lobby the U.S, government to get tariffs put in place on Japanese bikes above a certain engine size.

This resulted in the Japanese bikes, which had been dominating the market, becoming a great deal more expensive. The end result was that all bikes became more expensive and the pricing structure of motorcycles was forever changed. As might be expected, all those contributing to the manufacturing of motorcycles raised their prices too.

In the end, margins were pretty much what would be expected, but the fact of the matter remains, that it was an artificial and external factor that resulted in the dramatically higher prices.

 

[marquette]

Re: why are boat motors so expensive?

i think as far as new outboard pricing certainly EPA standards have had something to do with the prices. i think we can all agree that a basic 2 stroke (with or without some sort of oil injection) is easier and cheaper to build than a 4 stroke or an ETEC. as manufacturers shifted to new the new EPA standard engines prices had to go up. it's certainly not the entire reason for the prices we see today but like most things there is no silver bullet answer. when you start to add all the factors like new EPA standards, fuel cost to heat and run the factory, delivery costs for the finished product and the parts to build it, taxes, higher advertising costs, ect. they all affect the price. the 90's were glory years as far as profits but even if manufacturers bring their profits back to a reasonable percentage a similar hp outboard today will have to cost more than it did in 1999.

 

[Jack Daniels]

Re: why are boat motors so expensive?

I could be wrong but I would bet money on the outboard manufacturers are all union. High labor costs mean high sales prices.

 

[bowman316]

Re: why are boat motors so expensive?

We'll if these companies can lower their prices any more, and still make a profit, then there is no better time to do so than now.

The market can not bear these high prices any longer with the economy. So if they lower prices, they will get more sales, and not be hurting so much.

 

[Woodnaut]

Re: why are boat motors so expensive?

It's horsepower, technology, capitalism, warranty cost, development cost, risk, liability insurance, marketing, all of that over a relatively small number of units. If it was easy to break that combo at a lower cost then someone would . . .

That's pretty much it in a nutshell. There are a couple of companies offering good products: Merc, Evinrude, Yamaha, and Suzuki to name a few. All of them offer good products because if they were junk then the word would eventually get around and that would be the end of them. So we all expect a quality product. In fact, we all demand an excellent quality product and the support to go along with it.

Also, these companies are always trying to "one up" each other to gain a larger share of the market. The fact is, each one of them is ready to tear up the competition, which is a good thing for the consumer, but it also drives R&D costs up. Regulatory changes, market trends and consumer demands also drive the R&D group.

Anyone in the Manufacturing business will tell you they are always trying to drive their costs down so they are more competitive. But cost of raw materials and labor costs are not so easily managed or negotiated.

In today's economy, competition is fierce. I don't think anyone can sell an "overpriced" outboard. But the fact remains that an outboard motor is a lot of engineering (and manufacturing) technology crammed into a relatively small package. And they are produced in "relatively" small numbers.

 

[sickwilly]

Re: why are boat motors so expensive?

Because of the great amount of time banks (formerly) allowed a consumer to finance the purchase of a boat (including a motor).

The longer an item can be financed, the greater you can charge for it, because the monthly payment becomes smaller.

And, in a nutshell, this is one of the reasons why we are in the current credit crunch recession we are in, because examples like a bus driver being allowed to do interest only negative amortization loans and "afford" $800,000 houses, and people being able to "afford" $60+K boats with payments stretched from here to eternity!

Case in point: My brand new malibu skiier in 1986 -- $15K.

Same basic malibu skiier today, same engine with the addition of fuel injection, and the price is around $60K.

 

[sashimigrade]

Re: why are boat motors so expensive?

I know this is an old thread but I've been so angered by the prices of outboards that I had to reply. Here's a new 10 hp briggs lawn mower...

http://www.sears.com/shc/s/search_10153_12605?keyword=10 hp briggs and stratton&seax10 =1

$1100 if you don't want to follow the link.

Here's a listing for a new 9.9 hp mercury outboard...

http://www.smalloutboards.com/m99.htm

$2150 if you don't want to follow the link.

I've been wanting to buy a new cheap 14 ft jon boat and ad a 9.9 horse (because of hp restrictions in my area) outboard but I will never do it because I could never justify the price. $2150 for a 10 hp motor? Insane.

Sorry, but I really don't care about the big boy toy, r&d, and economics arguments. If no one paid this much they would be forced to lower their prices. We have absolutely no solidarity in the US.

I'm looking at buying a kayak. I need the exercise anyway. There are some good models out there now that you can stand in. Plus you don't have the fuel cost, possible wet/dry storage cost, engine maintenance cost, etc. Granted, if you're fishing in a large lake, ocean, or pulling skiers, a kayak might not be feasible, but if I can get to my fishing spots have less draft, less cost, get more exercise, and still fish, what's the downside?

 

[Art Bernard]

Re: why are boat motors so expensive?

Hehe, whay does a Harley cost more than a Honda? It's a speciality market with allot of speciality engineering and they don't sell enough of them for them to make money on quantity so they have to up the price.

Art

 

[sashimigrade]

Re: why are boat motors so expensive?

Hehe, whay does a Harley cost more than a Honda? It's a speciality market with allot of speciality engineering and they don't sell enough of them for them to make money on quantity so they have to up the price.

Art

Their profiting well enough or they wouldn't be able to fund their division and launch new products. It's price gouging to me. I'm an accountant, let me see the cost of materials and labor and I'll reconsider. I don't think they can justify the price and we're stupid enough to pay it.

The reason a Harley costs more than a Honda is branding. It has nothing to do with specialty markets but the mystique Harley has created (which I give them credit for) by branding and clever marketing. Outboards do not have this mystique or creative branding, the market seems fairly competitive yet they all match their prices which are ridiculous.

 

[H20Rat]

Re: why are boat motors so expensive?

Hehe, whay does a Harley cost more than a Honda? It's a speciality market with allot of speciality engineering and they don't sell enough of them for them to make money on quantity so they have to up the price.

Art

haha, you must be joking, right? A harley has a lot of speciality engineering compared to a honda??


The post above mine hit it exactly on. Pure and simple marketing... harley sells a name, nothing more, nothing less. There are far better bikes for far less money.

 

[sashimigrade]

Re: why are boat motors so expensive?

haha, you must be joking, right? A harley has a lot of speciality engineering compared to a honda??


The post above mine hit it exactly on. Pure and simple marketing... harley sells a name, nothing more, nothing less. There are far better bikes for far less money.

I couldn't agree more.

In comparison to outboards, outboard companies don't have much of a marketing advantage amongst each other. Mercury is strong but the other brands cost just as much. I can't get an Evinrude for that much cheaper than a Mercury. They all fix their prices because we have proved that we will pay it. So there is really no value in comparing a Harley vs a Honda and a Mercury vs an Evinrude. It's apples to oranges. A Harley costs more than a Honda because of the NAME but a Mercury and Evinrude cost about the same ridiculously high price for no apparent reason.

 

[jigngrub]

Re: why are boat motors so expensive?

I know this is an old thread but I've been so angered by the prices of outboards that I had to reply. Here's a new 10 hp briggs lawn mower...

http://www.sears.com/shc/s/search_10153_12605?keyword=10 hp briggs and stratton&seax10 =1

$1100 if you don't want to follow the link.

Here's a listing for a new 9.9 hp mercury outboard...

http://www.smalloutboards.com/m99.htm

$2150 if you don't want to follow the link.

I've been wanting to buy a new cheap 14 ft jon boat and ad a 9.9 horse (because of hp restrictions in my area) outboard but I will never do it because I could never justify the price. $2150 for a 10 hp motor? Insane.

Sorry, but I really don't care about the big boy toy, r&d, and economics arguments. If no one paid this much they would be forced to lower their prices. We have absolutely no solidarity in the US.

I'm looking at buying a kayak. I need the exercise anyway. There are some good models out there now that you can stand in. Plus you don't have the fuel cost, possible wet/dry storage cost, engine maintenance cost, etc. Granted, if you're fishing in a large lake, ocean, or pulling skiers, a kayak might not be feasible, but if I can get to my fishing spots have less draft, less cost, get more exercise, and still fish, what's the downside?

See if you can rig up a used motorsicle engine to push your boat, I hear they go for cheap... and we would all like to see that build!

When you buy new, you get the peace of mind of dependability... when you buy used, you're more than likely buying someone elses problems.