Not Your Father's Jet Ski

Sales of personal watercraft sank amid late-1990s eco-worries. Today, new technology is helping the sector make a splash again

Summer checklist time: Grill? Check. Cooler? Check. Suntan lotion? Flip-flops? Beach chairs? Check, check, check. What about a Sea-Doo or a Jet Ski? If you're like many Americans, these zippy little aquatic runabouts aren't at the top of your list anymore. But that may be about to change.

Personal watercraft—Sea-Doos, WaveRunners, Jet Skis, and the like—have been around since the late 1960s, when Arizona motocross enthusiast Clayton Jacobsen II invented the first stand-up model. Both Japan's Kawasaki Heavy Industries (KWHIY) and Canada's Bombardier Recreation Products were manufacturing them by the 1970s.

The market crested in 1997 at $1.3 billion, according to the Chicago-based National Marine Manufacturers Assn. At that time, there were six major manufacturers and the average personal watercraft product cost $6,454. But scrutiny over the vehicles' environmental impact and oversaturation of the market led to a dropoff in sales, while prices continued to rise.

The Big Four

Now sales of personal watercraft are once again increasing. In 2005 (the last year for which data exist), retail sales in the sector for the four remaining manufacturers—Bombardier, Yamaha (YAMHF), Kawasaki, and Honda (HMC)—accounted for $761.5 million, a 3.8% increase from the previous year. And while Wet Jet, Tigershark, and Polaris Industries have all left the game, new arrival Honda is having success with its line of Aquatrax vehicles, launched in 2002.

Vehicle innovations such as the lower-emission four-stroke engines that now come standard on most models are enticing the environmentally conscious. Environmental Protection Agency standards set in 1996 aiming for a 75% reduction in marine engine hydrocarbon emissions by 2025 already have been met or exceeded by all personal watercraft manufacturers. The higher-than-ever average unit cost of $9,495 indicates that more consumers are willing to pay a premium for these cleaner, more robust vehicles. "These are not your father's personal watercraft," says Maureen Healy, executive director of the Personal Watercraft Industry Assn. "Today's models are family boats. Three people can ride on these very comfortably, and you can take them on an overnight trip," she says.

With 43.1% of the U.S. market, Bombardier continues to dominate the personal-watercraft industry by offering eight Sea-Doo models ranging in price from the $7,699 GTI to the $13,449 GTX Limited. (The term "Sea-Doo" is derived from Bombardier's line of snowmobiles, known as "Ski-Doos.") "We're looking for new buyers and new entrants in the market," says Sea-Doo Product Manager Stephen Kalhok. The company's midrange GTI SE, one of the most affordable four-stroke models on the market, is now available with either a 130-hp engine ($8,499) or 155-hp engine ($9,199). Environmentally conscious riders will appreciate the GTI SE's cleaner 4-TEC motor, which received a three-star rating from the California Air Resources Board in 2006, the highest possible rating reserved by the state agency for the "cleanest recreational marine engines."

Going to Extremes

Despite having launched Jet Ski in 1973, Kawasaki has lagged behind Bombardier and Yamaha's WaveRunner for more than a decade, with an 11.53% share of the U.S. market in 2005. One of the reasons is that unlike its competitors, Jet Ski had concentrated mainly on stand-up models, which are lighter and faster than most sit-down models but also are trickier to use. With the introduction of the new Ultra 250X, a sit-down model with a supercharged engine that offers an unprecedented 250 hp, it hopes to be able to recapture much of its lost market share. The Ultra 250X can carry up to three passengers and reach speeds of up to 68 mph; it retails for $11,499.

Still others are taking the category to even more innovative extremes. Co-founder of New Zealand's Sky Network Television, Alan Gibbs turned his entrepreneurial acumen to water vehicles in 1995 when he founded Gibbs Technologies. Still in preproduction, the company's amphibian Quadbike and Aquada—an all-terrain vehicle and sports car, respectively, that transform into water vehicles at the flick of a switch—are scheduled to be released by mid-2009.

Next up: making a splash with firepower and surveillance systems. Among Gibbs' first customers is the U.S. Navy, which has issued Gibbs a Foreign Comparative Test contract to adapt the technology for military use.

Take a ride through's slide show of the fastest, most powerful, most fuel-efficient, and most expensive personal watercraft storming the seas this summer.

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