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  1. #11
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    Quote Originally Posted by gjgm View Post
    Along with the easy credit,cheap fuel,plenty of ambitiously geared buyers.
    and the ability to sell boats VAT free via a guy in a potakabin
    .

  2. #12
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    Quote Originally Posted by gjgm View Post
    Only, when everyone followed to same idea, maybe the margins on the big boats vanished too.
    That's not actually the case though. Try getting a build slot on a Squadron 78 now and see how long you have to wait

    Quote Originally Posted by gjgm View Post
    Along with the easy credit,cheap fuel,plenty of ambitiously geared buyers.
    Yup, those things certainly drove boat sales before the crash. Your observations isn't a particulalry Fairline matter though becuase it applies to the other builders too. In fact the comment mostly applies to the 75k-250k boat sector, not the bigger stiff that PrinSunFair want to make. It is that 75k-250k sector that was much more fueled by easy credit. Buyers above say 2m in general do not gear highly or at all. Bavaria for example, specialists in the 75k-250k sector, crashed much harder than PrinSunFair

  3. #13
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    Quote Originally Posted by gjgm View Post
    Looking at the change-of-hands over the last few years, you might question if that ability is limited only to small boats....
    Seems the strategy was to make oodles more money out of big boats, because presumably at some time that was where the margins were. Only, when everyone followed to same idea, maybe the margins on the big boats vanished too.
    Along with the easy credit,cheap fuel,plenty of ambitiously geared buyers.
    No question that some boat builders are finding themselves between a rock and a hard place at the moment. No question also that before the recession, building larger boats was the right thing to do because thats where their loyal customers were moving and thats where the higher profits were. Its very easy to say now, well, start building smaller boats again but its actually very hard to do, at least profitably. The problem is that the big 4 UK boat builders are both too big and too small to re-enter the small boat market. IMHO they're too big to build small boats in small numbers because their overheads would kill any profit and they're too small to build small boats in large numbers because they don't have the economies of scale to do it profitably. A lot of medium sized manufacturers in many industries are finding themselves in this dilemna

  4. #14
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    Quote Originally Posted by jfm View Post
    That's not actually the case though. Try getting a build slot on a Squadron 78 now and see how long you have to wait


    Yup, those things certainly drove boat sales before the crash. Your observations isn't a particulalry Fairline matter though becuase it applies to the other builders too. In fact the comment mostly applies to the 75k-250k boat sector, not the bigger stiff that PrinSunFair want to make. It is that 75k-250k sector that was much more fueled by easy credit. Buyers above say 2m in general do not gear highly or at all. Bavaria for example, specialists in the 75k-250k sector, crashed much harder than PrinSunFair
    I think unlike smaller models Fairline would not risk in starting to build a 78 Squardron in production. Unlike the smaller models which any builder would always build at least 3 to 10 slots in advance, and push dealers to buy one. Since Fairline also added the Custom badge to the Squadron this also is more of a no brainer. Since any one would want to make his 60 feet plus Fairline Custom. Whatever that means, as it is Semi Custom in real terms....
    But to answer your question I think build time for a 78 is about a year, and even if production is sold out I am sure I will hear my phone ringing if I say I want it 1 year from now, after a week of my visit and them telling me they can deliver in 2 years time
    Remeber Fairline is just building about 100 boats a year from previous peaks of 300, or 200 plus in the current size plaform.
    I think comparing Bavaria, Sunseeker, and Fairline in just sizes is wrong, as the buisness model is similar. But to say it short all Fairline, Princess, Sunseeker, Bavaria, Sealine, and Ferretti Group needed help from outsiders to survive, the 2008 crash. In the case of Bavaria and Ferretti it was an over value of a product in future demand fueled but the usual banking culprits and those involved with it.
    Cranchi and Sessa for example build boats in that bracket but due to good management are still family owned, and pretty much debt free.
    I think all builders World wide have to redimension, as the way ahead is still not clear. The costs of boats have become too much for medium to rich families to bear, and this is why the market is crunched.
    The market its still demmed as luxurous over 30 feet, so it has little to no political back up.
    I think paying extra taxes in fuel for roads that boats dont use, and exuberent marina fees all around are the two markups which are crashing the industry and leaving it stale in all sizes.

    But to inform on matter the market has actually grown in the under fifty size bracket in the last four years (best performing is 30 - 40ft), died and now is stable to 2006 levels in over eighty feet, and a bit of an up and down swing in between fifty to 79 ft.
    As Mike F says the Brits have enjoyed a period of success in large builds due to the weak sterling, taking clients from some Italian and Dutch yards.

  5. #15
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    Quote Originally Posted by PowerYachtBlog View Post
    The costs of boats have become too much for medium to rich families to bear, and this is why the market is crunched.
    IMHO thats very much part of the problem. Boat builders have been increasing their prices ahead of inflation for many years and are still continuing to do so. As you say, there is now a disconnection between the ability of many potential buyers to afford a new boat and the prices builders are asking. In addition there is also a disconnection between used boat prices and new boat prices. In the past, the prices of used boats were high enough to encourage some buyers to buy new boats. Now when you can get a 5yr old 50 footer for 50% or less of the cost of a new 50 footer, it doesn't make sense for many buyers to buy new, especially when they consider the high depreciation they will suffer. Of course, the fundamental problem is that there simply aren't enough buyers out there for boats, new or used

  6. #16
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    Quote Originally Posted by mikef View Post
    The problem is that the big 4 UK boat builders are both too big and too small to re-enter the small boat market. IMHO they're too big to build small boats in small numbers because their overheads would kill any profit and they're too small to build small boats in large numbers because they don't have the economies of scale to do it profitably. A lot of medium sized manufacturers in many industries are finding themselves in this dilemna
    Seems like it's time for some consolidation in the industry.

    An example may be Beneteau. They appear to successfully manage several separate brands with a wide range of sizes and types of boats, whilst combining some head office/manufacturing functions and achieving economies of scale. The larger group also seems to be able to retain a larger proportion of marine industry experts either within the organisations or for such external services as design etc. I think that organising the supply chain must be more efficient with a larger group too.

    I'm not sure that some of the Beneteau brands would have survived independently over the last few years if they were not part of a larger group.

    Maybe the British mobo companies are not sustainable in their current formats in the new post-2008 markets. Sadly good brands that die sometimes fade away in spite of a good reputation, fine products, and a band of loyal customers. Sometimes they just don't keep up with the changes in their industry and then can't match their peers/ the competition.

    Cheers

    Garold

  7. #17
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    I am not sure about this.. but is part of the cost problem because boats have moved away from being a "boat" and now needs to be considered a floating luxury apartment?
    At some higher end level it perhaps always has been. Maybe that is what the punter wants and so the builders respond-only maybe the punter then doesnt actually want to pay?

  8. #18
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    Also, and I don't know if I am right in this....

    But surely (if we ignore gangsters, criminals, footballers and lottery winners) very few people buying a brand new 50 footer are buying it as their first, or their smallest boat.

    Most of these people have "come up through the ranks".

    Now, if you bought a Sealine 210 new in the early 90's when you were 35 you are possibly now in your late 50's and buying bigger boats - maybe another Sealine maybe a Fairline or whatever....

    But if you're 35 now and want to buy your first ever new boat, are you likely to be buying a SC35 at however many hundreds of thousands?? (I couldn't find the cost on their website). NO. You have no choice now pretty much other than to buy American, Bayliner / Maxum etc etc all offer small boats starting around 18ft and working up.

    So where are the buyers going to come from?

    There are only so many "mega earners" about and unless you can get people into your brand young, you have a serious chance of not getting them at all...

    It costs Porsche something like 3000 more to make a 911 than it does a Boxter - yet they sell it for an awful lot more - that's where the mega profit is - but they are looking to make a car below the Boxter with an even tighter margin - Why? Because they realise that if someone can buy a Porsche instead of another "Mass market" car they will, then what do they do when they want to change, they look to upgrade and (they hope) will buy the bigger, better model, and then when they change again they hopefully buy the 911 then.

    Sunseeker, Fairline, Princess and Sealine all made small cruisers at one time. The people who bought these 20 or even 30 years ago may all still be in the brand, and perhaps they don't think there is a demand at the lower end any more but that's because they don't make "affordable" small boats and have priced themselves out of the entry-point, and I think that is something they are all going to REALLY regret in 10 years time.
    Why can't we work 2 days a week and boat the other 5????

  9. #19
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    Quote Originally Posted by ontheplane View Post

    It costs Porsche something like 3000 more to make a 911 than it does a Boxter - yet they sell it for an awful lot more - that's where the mega profit is - but they are looking to make a car below the Boxter with an even tighter margin - Why? Because they realise that if someone can buy a Porsche instead of another "Mass market" car they will, then what do they do when they want to change, they look to upgrade and (they hope) will buy the bigger, better model, and then when they change again they hopefully buy the 911 then.

    Sunseeker, Fairline, Princess and Sealine all made small cruisers at one time. The people who bought these 20 or even 30 years ago may all still be in the brand, and perhaps they don't think there is a demand at the lower end any more but that's because they don't make "affordable" small boats and have priced themselves out of the entry-point, and I think that is something they are all going to REALLY regret in 10 years time.
    Not convinced about either of those.

    On the first point, do Porsche really sell more 911s due to the existence of the Boxster? Or to put it another way, would someone who goes from a Boxster to a 911 really have not bought the 911 once he had the funds and desire to do so had he not had the Boxster first?

    On the second point, I don't think it's lack of demand that has Fairline/Princess etc not building small boats, its the fact that they have positioned themselves as premium boat manufacturers so couldn't build a boat to their standards and sell it competitively against mass produced Bayliners etc. Of course they could make a cuddy cabin speedboat to their standards and price it accordingly, but would anyone buy it? I suspect it'd be like Aston Martin's disastrous foray into 1.0 litre hatchbacks with their dreadful Cygnet. Appreciate it was a tarted up Toyota, but non the less, even if it had been a purpose built Aston (and would probably have been worse as a result), who wants a 1.0 litre hatchback Aston Martin for 35K? Building ultra premium products and then trying to compete in a mass market with established mass market players is a recipe for disaster.

    And would it really pull people into the brand? Or put people off buying the top end products.
    Ari

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  10. #20
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    Quote Originally Posted by mikef View Post
    IMHO thats very much part of the problem. Boat builders have been increasing their prices ahead of inflation for many years and are still continuing to do so. As you say, there is now a disconnection between the ability of many potential buyers to afford a new boat and the prices builders are asking. In addition there is also a disconnection between used boat prices and new boat prices. In the past, the prices of used boats were high enough to encourage some buyers to buy new boats. Now when you can get a 5yr old 50 footer for 50% or less of the cost of a new 50 footer, it doesn't make sense for many buyers to buy new, especially when they consider the high depreciation they will suffer. Of course, the fundamental problem is that there simply aren't enough buyers out there for boats, new or used
    But the boats are very different aren't they? Bigger (for the same length), better finished, better equipped.

    You're right in what you say about the prices but they haven't kept building the same sort of fifty footer (for instance) and flogged it for more and more money (ahead of inflation). They've improved the boats massively over the years in terms of what they offer.
    Ari

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