Fishing & Boating News

Genmar Unveils Revoluntionary Program To Increase Boating Opportunities

(Jul. 19, 2004 - MINNEAPOLIS, MN) Today Genmar released information on an exciting new program, not only offering their dealers, but others that might be interested, the opportunity to tap into the market of boat rentals. The revoluntionary new program is outlined below in a letter from Irwin Jacobs, Genmar, Chairman of the Board, to all Genmar dealers.

"As you know, Genmar is continually searching for new ways to increase our dealers' traffic and profits through innovative products and marketing programs. After thoroughly studying the potential need and market for boat rentals we have identified what we believe to be a blockbuster opportunity. It is a new, revolutionary program to drive more traffic to your boat dealership, ultimately resulting in an entirely new stream of boat sales and profits for dealers. Let me explain.

We believe there's a need – and a huge untapped market – for a uniform and consistent nationwide rental program for boats and pontoons. Our in-depth research shows there are in excess of 1300 U.S. locations that presently offer a variety of boat rental programs for boats and pontoons. However, there are rarely two boat rental programs alike and, in many instances, the boats and pontoons being offered for daily rentals are in such rough condition that it is hard to imagine a customer wanting to rent them, let alone be enticed to someday purchase a boat. Besides the inconsistencies in the various boat and pontoon rental programs, dealers tell us their single biggest challenge is getting the necessary comprehensive insurance coverage needed to protect their dealerships and the renter at an acceptable cost.

We believe there's a profitable way for dealers to satisfy new and existing boat customers' desires to rent a boat or pontoon. Genmar has developed a boat rental program that will, for the first time, offer qualified dealers the option to be in the boat rental business without tying up their own cash or floor plan dollars and still be provided with opportunity to substantially increase their dealerships' profits. Further, a uniform and broad insurance program will be included for every boat and pontoon in this new Genmar boat rental program.

Genmar is able to offer this groundbreaking program where other's can't because of our exclusive Roplene‚ technology. As I have communicated in the past, Genmar has invested a great deal of time and money into our Roplene‚ technology which is used in the manufacturing process of all Triumph boats and pontoons. All Triumph products are recognized as the World's Toughest Boats. We believe Roplene‚-built products are the only boats and pontoons in the world capable of standing up to the rigorous uses and abuses to which rental boats are consistently subjected. Therefore, they will be the only products offered for our new Genmar boat rental program.

There will be no requirement to become a Triumph boat or pontoon dealer in order to be a participant in the Genmar boat rental program. In fact, while we are offering this new program to existing qualified Genmar dealers, we will also be offering it to non-Genmar dealers.

The program and concept are quite simple. Dealers who qualify and are approved to become a participant will enter into a lease agreement to pay a monthly fee for each boat they lease for their rental business. The lease is a 3-year agreement, which means you will get new boats, trailers and pontoons equipped with Yamaha four-stroke engines every 36 months. (We are hopeful that the Genmar boat rental program will ultimately be able to offer other four-stroke outboard engines options; however, up to this point all rental boats and pontoons will be featuring only Yamaha four-stroke engines.) The monthly fee per boat will be the same regardless of how many days you rent it out per month. All charges (except taxes which are determined by state) will be included in the monthly lease payment: insurance, no cash outlay for inventories, no depreciation or loss on the boats when returned back to Genmar at the end of 36 months, and extended warranties on the boats and engines over the three year life of the rental lease. The Genmar boat rental program can become profitable with as little as 50 rental days per year, per boat or pontoon. Once you've had the opportunity to compare our suggested daily rental rates to those presently offered in the marketplace, we believe you'll agree that Genmar's boat rental program is more competitive and more comprehensive than any of the existing smorgasbord of rental programs offered today throughout the U.S.

The fact is that this new, innovative program – properly marketed – can be a very substantial profit center for your dealerships. Further, think of what this will do to promote boating to those people who can't afford to purchase a boat today, but want to experience boating in the hopes of someday becoming a boat owner. Additionally, we believe there are literally tens, if not hundreds, of thousands of individuals and families in America that can afford to purchase a boat but aren't sure of the experience. They would most likely prefer to rent a boat prior to purchasing one if the rental boats were presented in a reasonably priced, clean, consistent and professional manner. Frankly, we believe there are more potential customers to grow boating through Genmar’s new rental business than any other program in the market today.

Additionally, there is a very substantial opportunity for you to market and manage a subleasing rental boat business as an additional profit center if you become part of the Genmar boat rental program. The majority of boat dealerships in the U.S. are located near hotels and resorts with marinas to which you will be able to promote and market the Genmar boat rental program. For dealers with the proper contacts, you will be able to offer nearby marina hotels and lake resorts an opportunity to become a subleasing dealer to your dealership. Where there is a market to rent boats and pontoons on a lake, why wouldn't a resort owner or hotel be happy to get a small percentage of the boat rental income without any of the insurance headaches or capital investments, involved in purchasing boats and engines.

At the end of the 36-month lease, all dealers in the leasing program will have the opportunity to purchase the boats and pontoons at approximately 37% of the original price for the boat, engine and trailer. However, the decision for a dealership to purchase the boats or pontoons at the end of the 36-month lease period is strictly at its option. There will be no requirement to purchase the rental boats after 36 months. Ultimately the condition of the boats and pontoons will dictate the resale value after 36 months; however, we believe there will be a very good market for the Triumph boats and pontoons after the rental period, a market which should allow a dealer to resell them at a price well above the buyback value of 37% of original invoice cost.

For those of you who have an existing rental program, I am sure you will understand what a great opportunity this new program is. For those of you who have never looked into rentals, I am hopeful that you will take the necessary time and effort to look into this potential profit center for your dealership."