Trump’s trade war helps lift Malibu Australia’s sales to $37m

Malibu Boats last night announced an almost 40 per cent jump in global profit for the 2018 financial year to $US66.1 million as the amount of money it made from each of its 7362 sales worldwide – production last financial year soared 17 per cent higher than in 2017 – earned it $US684 million.

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Australia’s contribution for the year grew by $2.2 million – up 9.7 per cent – in part because it clawed back market share from rivals. More importantly, it has become a way for the company to side-step punitive tariffs levied against US-made products in key markets – the Albury based factory is now exporting custom-ordered boats to Europe and China, having expanded production to continue to meet growing demand in the Australian and New Zealand markets.

Malibu Boats global chief executive Jack Springer told boatsales.com.au that Trump’s ongoing trade war had created a “terrible situation” in the US, and its Albury, NSW-based factory, which hand-builds the US-engineered models under the Malibu and Axis Wake Research brands, was stepping in to help.

“If you look at what's happening in Australia, we’ve picked up a significant amount of market share in the in the past year versus the competition,” Malibu Boats chief executive Jack Springer told boatsales.com.au.

“I think that's largely due to the boats that we build here. The fact that they are built here, I mean, we pride ourselves,” Springer said.

“And I think this team here prides itself on building boats in Australia, so we think that that is very, very important.”

However, Springer said Malibu’s presence in Australia also now gave it a distinct price advantage when it came to side-stepping the punitive retaliatory tariffs levied against US-made products in both Europe and China.

“With having this plant in Australia, we are now building both for both Europe and China,” he said.

“We have a terrible situation that exists with the United States, and we’re talking a 25 per cent tariff that exists with China and with European markets.

“We started last year, probably about the November timeframe, building boats for both the European market and the Chinese market, so that's what will propel the growth of Australia as well.”

As long as the US-led global trade war continued, Australia would build boats for both those markets, Springer said.

“I think that that's great from the standpoint of it certainly keeps the plant humming and employing people in Australia, which is very important,” he said.

One boat not destined for overseas markets – despite a strong show of European interest – is the home-grown Malibu Response TXR ski boat, which was conceived, developed and built by the Australian subsidiary.

“Yeah, we just really haven't gone down that path [exporting the Response TXR],” Springer said. “There has to be a certain order level that we would need to hit, and I don't think at this point that they've [European dealers] got the full range of orders.

“And frankly, until you display a boat, or do a show over there, that's probably the point in time that you start getting that demand.”

Springer said Malibu would also soon start to ramp up the presence of US fibreglass boat brands Cobalt and Pursuit – both were swallowed up by Malibu as part of a recent aggressive expansion of its US-based product portfolio – in Australia.