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Leading Boat Builders and Top Dealers Refute
Brunswick Allegations of Dumping Charges
WASHINGTON, D.C., 1/29/04 — Four leading U.S. independent boat builders and four top marine dealers today voiced their support of Yamaha Outboards in testimony at the U.S. International Trade Commission’s preliminary conference to hear comments on Brunswick Corporation’s allegations of Japanese outboard makers’ dumping activities.
The builders and dealers all arrived at the same conclusion testifying that any problems Mercury has in the marketplace has more to do with product quality and reliability than with pricing.
Yamaha Marine Group President Phil Dyskow said he was overwhelmed by the support demonstrated by the builders and dealers who traveled to Washington in one of the worst winter storms of the year to offer their support.
“There was no shortage of our OEM builder and dealer partners who offered to attend to show support for us,” said Dyskow. “ Once the word was out, my phone didn’t stop ringing with offers of support. We limited the list to four top builders and dealers due to space and time constraints.”
The four independent builders were Genmar, Godfrey Marine, Maverick and Grady White Boats
Dumping occurs when a foreign company sells a product in the U.S. market at less than the price it charges in its own home market or below fully distributed costs and the dumping cause material injury to the domestic producers of the same product.
Irwin Jacobs, Chairman of Genmar, the largest U.S. boat builder said, “In terms of import pricing relative to pricing by domestic manufacturers, based on Genmar’s volume-based discounts and purchases in the recently completed 2003 model year, our lowest priced supplier is not a Japanese engine manufacturer, but a domestic engine manufacturer.
“To the contrary and belief of Mercury, we didn’t bring Yamaha in because they offered lower prices than Mercury, because in fact, they didn’t. During the time period for this investigation, the biggest discount, that is, the lowest price Genmar received from any engine supplier was a discount from Mercury.”
Doug Gomes, VP Sales and Marketing for Grady White Boats, told the commission , “It’s not a question of whether our price from Yamaha is higher or lower than our price from the competition. It is whether our customers are more or less satisfied with our boats when they are powered by Yamaha or Mercury or Bombardier. Grady White has chosen Yamaha, not because Yamaha offers lower prices, because it does not, but because Yamaha offers the engines that have the best reputation in the market and that helps us sell our product.”
Scott Deal, President of Maverick Boats, said, “The issue is not price, but how a motor stands up in the real world of saltwater boating. In summary, we buy Yamaha because of the product, not because of the price. Our customers want Yamaha engines and particularly Yamaha four-stroke engines.”
Deal reiterated, “Yamaha has the right product and that’s what the customers and dealers want. Our dealers gave Yamaha an approval rating much higher than other engines.
Robert Deputy, President of Godfrey Marine, one of the largest boat builders in the U.S. offering seven different brands, said, “We sought out Yamaha because our dealers agreed with us that boats packaged with engines was desirable. Even though Yamaha was more expensive that Force Outboards, which we initially packaged with, Yamaha was willing to work with us to develop engine features that the market desired. Force made the decision not to sell engines to independent boat companies in 1989. Force was a Brunswick product at the time.
After our success with Yamaha, Mercury asked us to package their engines with our boats, as did OMC. We agreed to package with both. However, neither had the product offering that Yamaha has of four-stroke engines.“
Deputy said that over two-thirds of the engines Godfrey sells are four-strokes and because of this they can’t do the kind of volume with either of these manufacturers that they do with Yamaha. He concluded that they simply don’t offer the range of four-strokes that the consumer demands.
Echoing the other builders, Deputy said, “The problems of Mercury are “product” not “price” related as evidenced from Godfrey’s experience with their products compared to Yamaha. “We sell the Yamaha F150 for almost 20 percent more than we sell the comparable U.S. manufacturer product. Despite this price differential, Yamaha outsells that brand by a substantial margin. We sell both Yamaha and Mercury engines on our boats at about the same price, but Yamaha outsells Mercury.
“Frankly, we are mystified by Mercury’s decision to file this anti-dumping petition. Just as the market is recovering, Mercury is pursuing a strategy which, if successful, undoubtedly would increased prices in the market. Their problem is not that Japanese prices are underselling them, they are not. Their problem is that they are not making the product the consumer wants — reliable, clean, quiet and fuel-efficient four-stroke outboards.
The marine dealers giving testimony offered the retail point of view, but had the same conclusion. Mercury’s problem isn’t pricing, but product reliability.
Jack Mudget, President of Action Marine, Webster, Mass, said, “We started out in 1985 selling Johnson/Evinrude and Mercury and six years later took on Yamaha. Our sales are now 75 percent Yamaha.
“Let me emphasize that our turning to Yamaha was not ever based on price. In fact, it has been my experience that Yamaha engines are always more expensive that comparable Mercury and Johnson engines.
Mercury has lost an enormous amount of market share to Yamaha, and now Bombardier's new etec engine along with Suzuki's new four strokes will continue to erode Mercury's market share. And Mercury has no one to blame but themselves for their problems. Like the former OMC's Ficht, the Mercury Optimax has been a public relations disaster with many purchasers in the saltwater market.
Mercury's new 6cyl supercharged four stroke outboard will bring some life back to their large outboard sales, but Yamaha already has garnered an enoumous foothold in the large outboard market and Suzuki is pumping out their big new V6 four strokes as fast as they can to try to grab as much of the offshore market as they can before Mercury introduces their supercharged engine at the Miami Boat show. But the introduction of their new supercharged four stroke won't solve all of Mercury's offshore woes as initially it will not be available for re-powers, only to the OEM market.
Surely the above information and statements shouldn't surprise anybody. What else would you expect to hear from Yamaha buyers/dealers?
Frankly, it will be a mute point after Feb. 12, 2004!
My guess is that Mercury is trying to get import restrictions slapped onto Yamaha to give them breathing room for the intro of the new v6 supercharged outboards. Doing this would, in effect, make certain Yamaha outboards hard to get because of the restrictions.
I don't understand the rationale for attacking Yamaha, as Yamaha actually is a significant partner for Mercury (ie merc makes some of the lower hp 4 stroked co-branded for yamaha and yamaha I believe makes the merc 115 and 150 4 strokes for merc). I originally figured that Brunswick's action was directed against Suzuki. But seeing how strongly Yamaha is reacting, I suppose Yamaha definitely believes it is directed at them. Which again makes no sense from Mercury's persepctive in my opinion.
Something you have over looked ... whats the best way to get out of a binding contract for mfg production...... Sue the company your in partnership with and they almost will alway's find reason's to drop you from the contract ..... This saving Merc million's in cost to buy out !!!!!! They honstly did not exepct to have a "quailty" four stroke product ready for market as soon as they have ...
Side note "quailty" being their word not mine ..John
I don't know if it is a "binding contract" or not but I do know that Yamaha is building Mercury's 4-stroke powerheads. Mercury may be trying to find a way to get out of this "agreement" which is pretty stoopid since it allowed them to join the market with 4-strokes.
What does Feb 12, 2004 have to do with it? Or are you using this as a reminder to get your squeeze a Valentines gift?
Pak it
Feb. 12, 2004 is the date that Mercury unleashes Project X on to the boating world. This motor promises to set the new standard for outboards in the industry.
Every make of motors has some problems. I have had Yamaha that give trouble and I have had Mercury Optimaxes that give no trouble. I believe it has alot to do with who services your motors not the make of the motor.
Brunswick Corp. allegations of Outboard Dumping 
