Boat maker Tiara grows by embracing a surge toward outboard motors

Michigan-based boat maker Tiara Yachts Inc. made a shift seven years ago by offering boats with outboard motors rather than a more traditional inboard engine. That launched the company on a growth trajectory that executives hope to build upon with new innovations and a quicker product development cycle.

The fiberglass boat maker that Leon Slikkers founded in Holland in 1974 has grown from $70 million in sales in 2017 to projections of nearly $200 million for the 2025 fiscal year that runs through June 30.

The 2024 fiscal year was the company's "high water mark," with strong percentage growth in sales, President and CEO Tom Slikkers told Crain's Grand Rapids Business, a sister publication of Plastics News.

To maintain that course, Tiara Yachts has increased capital investments in production automation and new product development. The company's goal is to introduce a new boat model to the market every 120 days.

"We have a lot of major capex stuff that's in the works that's all contributing on all cylinders," said Slikkers as he described the company's "three-pronged approach" to growth.

That includes further engaging its workforce and integrating more automation at the nearly 900,000-square-foot production facility on Holland's southeast side "to help us with creating better product, better outcomes [and] more reliable outcomes," Slikkers said.

Its manufacturing operations include hand layup of fiberglass bodies. Leon Slikkers was heavily involved in developing fiberglass boats in the 1950s and the company now run by his sons has had its own in-house production since it opened.

As Tiara Yachts deepens the use of production automation, management wants to engage more employees and move affected staff to new positions and opportunities within the company, he said. The company employs about 725 people in Holland.

The company has nearly doubled its capital investments for product development to support new model introductions as consumer tastes continually evolve and demand grows for something new every few years.

"The idea behind the strategy is similar to what we've observed in the consumer life of most Americans," Tom Slikkers said, using the iPhone as an example and consumers' tendency to want a new phone every few years to keep up with new technology and features.

A boat model used to last seven to 10 years from introduction "without too much angst," he said. Today, it's five years, and "six years is probably a long time for a model to survive."

"That means that we have to figure out how to make that new product life cycle happen faster, and by the same token, I can't just give them something that's warmed up," Slikkers said. "With the size and bandwidth of our portfolio, the number of models that we offer, we know that three [new models] a year is very aggressive, but it allows us to continue to invest and keep our products as fresh as we can. We know that those things are attributes that consumers are looking for."

Tiara Yachts produces about 200 boats a year, ranging from 34-foot models that cost about $650,000 range to 60-foot boats that sell for up to $4 million. The vessels are sold through a network of boat dealers. At any given time, the company produces 10 to 12 different boat models that are in various stages of their product life cycle.

Half of the boats that Tiara Yachts produces are sold in Florida. Markets in the Midwest and northeast U.S. account for about another 15 percent of sales each.

The current growth path began in 2017 when Tiara Yachts, in adapting to consumer preferences, introduced boats that use outboard Mercury Marine motors, rather than inboards. The boating industry had been adopting outboard engines "at a pretty good clip as the outboard companies were providing newer, larger, better technology and more horsepower," Slikkers said.

The new generation outboard motors have better performance, cruising and top speeds and "are tremendously quiet," he said.

The change was "a pretty significant departure for us to put outboards on the back of Tiaras, but we've been able to do that, I would say, quite successfully, and we've created a recipe that maintains our DNA and our heritage and legacy of quality and performance," Slikkers said. "We've done it in a way that meets the demands of the consumers."

The new generation outboard motors that helped to propel Tiara Yachts' growth "changed the perception that people had of outboards based on a lot of the old stereotypes and the higher horsepower that you could get," said Kelly Slikkers, Tiara's vice president of operations.

"It comes down to good partnerships with suppliers as well and us working closely with them and working together to offer something that provides innovation that's not out there currently," he said. "We looked at it and said, 'Wow, that creates a massive opportunity for us. We'd like to do something.' Then we created something that we thought was going to be relevant for our brand using that engine."

Tiara Yachts grew as boat sales in the U.S. declined an estimated 9 percent to 12 percent to 230,000 to 240,000 units in 2024, according to a January report by the National Marine Manufacturers Association.

The Washington, D.C.-based trade association noted that the industry last year continued to "normalize" after record demand during the COVID-19 pandemic that led people to want to get outdoors and on the water.

Sales for new power boats in 2025 have begun "to show signs of a return to growth driven by innovative new products, changes in U.S. economic policies and consistent consumer demand for on-water experiences," according to the Marine Manufacturers Association.

"Our industry has simply corrected," association President and CEO Frank Hugelmeyer said during an address at the Discover Boating Miami International Boat Show Industry in February. "And as expected, we're seeing a return to the levels that occurred before the unparalleled boom and the pull forward of demand."

High interest rates and inflation, along with uncertainty over the 2024 presidential election, also contributed to lower demand, Hugelmeyer said.

For 2025, the association projects boating expenditures will grow 3-5 percent above 2024's anticipated final tally of $55 billion.

Tiara Yachts experienced "a slowing" going into its 2025 fiscal year that started last July "with everybody taking stock with the election" and other issues in the economy, Kelly Slikkers said.

"We saw many competitors in the industry, I would say all calendar year of '24, slowing down and pulling back, and we were fortunate enough to finish up … very strong" for the fiscal year, he said. "We've just continued to push forward with the new product that we're introducing and our plans to move forward there."

During the pandemic years, Tiara Yachts resisted playing into the spike in demand that came as the company also dealt with supply chain challenges and getting staff back to work. Tiara Yachts met the orders it had committed to build and, in contrast to other manufacturers, avoided shipping incomplete boats to dealers.

"Unexpectedly, we were inundated with more orders than we knew what to do with. People were buying boats like you were selling cotton candy. It was an activity that was viewed as safe. You were able to do it outside, and you could do it with your friends and family," Tom Slikkers said.

"We ultimately met our goals that we had during COVID, and then when it came to, 'OK, now we're in this moment of growth that everybody's going crazy,' and I'm going, 'no, we're not going crazy.' We're going stay on the same trajectory that we've been on because I don't think that anything that goes up that fast has ever stayed up for that long. It's going to come down, and it did," he said. "We spent our efforts in manufacturing on our quality systems, our processes, and trying to get our supply chain better aligned to help us with our goals."