Sales Figures for Sailboats Take Big Hit

Discussion in 'Sailboats' started by Chris Ostlind, Feb 19, 2010.

  1. Chris Ostlind

    Chris Ostlind Previous Member

    This was recently posted by my friend, Brian Eiland, on a multihull discussion site. The comments are slender in overall deatil, but the figures point to a scenario that has been previously suggested several times on these pages.

    Clearly, the time has arrived in the sailboat industry, where fresh, simple and affordable designs are going to be a must have for an established, or beginning company to present to the buying public. Overly exotic boats with complex operating procedures are probably going to lose market share in this kind of consumer reality.

    The Sailing Company presented its annual "State of the Sailing Industry Report" during the Miami International Boat Show and Strictly Sail and it was peppered with phrases such a "survival mode," "Darwinian gale," and "indulgence is no longer affordable."
    Rick Walter, of MarketResearch Associates, delivered a sober assessment of the sailing industry, but one that promised "brighter skies" in 2010.
    "The 'Recovery Consumer' is rethinking risk, value and consequence," Walter said, "and marketers will have to work hard to redirect decision-making [by the consumer] that is perceived as responsible."
    Production was down 20 percent between September 2008 and August 2009, and the work force was down 29 percent. Cruiser production was down 55 percent, while multihulls were down 36 percent.
    The estimated overall value of North American sailboats was down 58 percent to $258 million. A 12 percent increase is forecast for 2010.
    Exports among all "developing nations" were down 46 percent, to 1,154 units while imports were down 33 percent - or 118 units - to 240 units. A 16 percent drop was forecast.
    The decline was across the board by size, ranging from 31 percent (46 feet and larger) to 37 percent (20 to 35 feet). Multihulls held their own, declining only one unit to 113. This year's forecast is for an overall increase of 95 units.
    "Delivering bad news is tough," said The Sailing Company's group publisher Sally Helme in closing, "but we are all here and we survived because we are the best and brightest. Get ready for a recovery."
    — Rich Armstrong
  2. hoytedow
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    hoytedow Carbon Based Life Form

    This is what you can expect in a country where industrious productivity is villified and laziness is rewarded. Those who tax the h e double hockey sticks out of anyone buying such luxury goods are going to discourage sales, hurting hard-working people from the top all the way down.
  3. Guest62110524

    Guest62110524 Previous Member

    Chris tis worldwide and here its all powerboats
    We just could not sell ours here, or in fact worldwide markets for sailing boats 200--2mill is hopeless and this has been so for 10 years, However the builders of super yachts have full books and have had for closer on 2 decades
    Hoyt out taxes are low, 10% as comp Europe around 20% yours?
  4. hoytedow
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    Here they carve out luxury taxes on such items. Ruined Florida boatbuilding industry.
  5. Chris Ostlind

    Chris Ostlind Previous Member


    Not looking to be argumentative, but do you suppose that the global recession has just a bit of a part in all of this sobering info about sailboats? Mind you, the recession is more than likely the biggest reason for the report's numbers, but there are other factors at play, as well. I'm not inclined, however, to see the points you made above as major elements in the mix.
  6. hoytedow
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  7. hoytedow
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    hoytedow Carbon Based Life Form

    I don't have global information, but remember the government meddling 2 decades ago doing great damage here.
  8. Chris Ostlind

    Chris Ostlind Previous Member

    So, was it also the government that drove up the prices of real estate which put heavy pressure on previouosly locally owned small-time marinas, so that they were "forced" to sell their properties to condo developers for huge cash gains?

    Fewer small marinas meant more expensive slipping fees and waiting lists for a place to put that boat. I remember the local governments instigating additional taxes to slow the sales a bit, until marina slip availability could catch-up. You know what's next... the tax never got repealed because no elected official can ever look a good revenue source in the mouth and not say, "set a spell, won't you?"

    The point is, that it wasn't just taxes on luxury items that had an impact on boat sales and manufacturing. Truth is, the waterfront ground is just too valuable for other stuff and the builders are gonna lose that argument every time.
  9. hoytedow
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    Actually, I believe something like that happened in Connecticut a few years ago. I will try to find details.
  10. hoytedow
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  11. Landlubber
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    Landlubber Senior Member

    In 1985, whilst doing my Shipwright course in Sydney, I did a survey on all the bostsheds in the harbour. It turned out that one had closed every year for the last ten years and the future looked exactly the same.

    There is no way that a slip can make enough in a year to cover the costs of what could be money in the bank, even at paltry bank interest, the slip looses out. Unless it was retained because the owner "liked boats", then it was lost to the developers.

    Today, with real estate as it is, it is even worse for the prospects of a slipway. I was recently talking to the owner of the Ballina slip, looking at purchasing it, the figures are way out if you expect to make any money from it as a business. It is only capital gain that can make money from a slipway.
  12. sharpii2
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    sharpii2 Senior Member

    I think what we're seeing here is a vast transfer of wealth from the working class, the middle class and even the 'mere rich' to the super rich, those who make more than ten million US $ per year.

    There are several good reasons for this.

    1.) We live in an era of lots of new technologies coming on line at once. Whenever this happens, wealth tends to go to very few individuals, those in the center of the wave. They tend to be rich to begin with, so they are in a position to invest in and to even start new businesses using these new technologies. If they do it right, they are in a position to become fantastically rich.

    2.) We also live in a time when 'market forces' don't work the way they should. This is because just about anything that is not a government sanctioned monopoly is an oligopoly. There is really very little real competition.

    3.) We also live in an era where labor, both physical and intellectual, is a global commodity to be purchased at the lowest price possible (the new technologies make this much easier than it used to be). People who used to make $100 a day now compete with people used to making 2 or 3 dollars a day.

    4.) And to top that all off, we live in a time of diminishing global resources such as clean water, farmable land, and energy. Just as the human population is growing faster than ever. The greater the huddled masses, the greater the potential wealth for those on top. This may sound like a political statement but is really an economic one. It took the 'black plague' to loosen the grip of the land holders to help spell the end of the 'middle ages'. Fewer available laborers allowed 'labor' to command a higher 'price'.

    As for sailboats. We just have to wait for fuel to become prohibitively expensive. But by then our serfdom will have become complete. Waaa!

    Mega Yachts, boys! That's where it's at!

    Or pirate ships.
  13. Guest625101138

    Guest625101138 Previous Member

    Yep; fuel price!

    Two years ago I made what now might be considered prophetic posts to stir the pot on page 1 of this thread:

    There is no doubt that the current situation in Europe and USA is the result of people living beyond their means and not being mindful of what is occurring in Asia and other newly developing areas.

    There is some sobering review of US recent history linked here:

    An individual may not feel much pain in filling the car or boat each week but every drop of fuel needs to be treated as precious. The US economy is highly dependent on imported oil. So every time someone in the US fills their car or boat they are pushing up prices of everything. The wealthy individuals who use large amounts of fuel for recreational use are adding to the inefficiency in the US economy. The history indicates that while crude hovers around USD80/barrel the US economy is bumping along the edge of recession.

    So there may be individuals who can still operate megayachts but they are behaving anti-socially. It is costing the whole community. Even if only a tiny proportion of consumption, it is the wrong message to Joe Average who is aspiring to do the same things. How much would oil consumption drop if all recreational uses were stopped?

    With crude at USD80/barrel China can grow strongly because it does not have the oil dependence of the US - yet. The immediate problem for China is finding new markets to offset the reducing US market.

    Rick W
  14. Typhoon
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    Typhoon Senior Member

    People are realising the marketing is all BS.
    Most people want a basic day/weekend boat as that's all the time they have to spare on the water. No one wants to spend $150k on a 30 footer, when 15 years ago, the same size boat was barely worth $70k.
    Instead, every manufacturer is stuffing in full luxury interiors, ridiculous amounts of 240v electronics and gadgets etc. Look around, you can't buy a nice basic 30ft yacht or powerboat with simple day/overnight accomodations, everything has generators, full fridge freezers etc.
    The marketing goes like this: we want to charge another $25k for the "new" boat, all we've actually done is a few quick changes to some of the deck moulds, but we'll "value add" $2k worth of crap so we can charge another $25k.
    It's the same path new cars have gone, they BS you with throwing in free alloy wheels and floor mats "worth $2k", but they pay $400 for them. They upgrade you to the next trim level, you think you've done a great deal, they pried $2k out of you for $400 worth of junk.
    I hate to say it, but the boat building industry doesn't do near enough proper market research and actually listening to potential customers.
    Spotting and profiting from trends is big too, notice a select few manufacturers raking it in on wakeboard boats, whilst true skiboat manufacturers struggle.
    The other factor is there are just too many manufacturers. There was only ever going to be so much market, spread it around too many builders and profits disappear. As with any normal cycle in the marine industry, the well run business will survive, the bad ones will disappear.

    Regards, Andrew.
    1 person likes this.

  15. Crag Cay
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    Crag Cay Senior Member

    I'm not sure that's true. Day sailing / overnight type boats around 30ft have been the big 'thing' for the last five years or so. Interestingly this has remained a niche market in the upper end of the market (J Boats, Morris, Rustler, Esse, etc) and not one pursued by the volume producers. The big manufacturers realise that an 'overnighter' is no cheaper to produce than a 'sparingly equipped' cruiser-racer, but the perceived value of this more versatile boat is much higher: You can day sail a cruiser-racer, but you can't go off for a week in a cuddy cabin. Now they might never go off for a week, but it's better perceived value.

    In addition, it costs no more to berth in a marina / haul / antifoul / insure a 30 foot cruiser-racer as it does a 30ft day sailer.

    In previous recessions it's been the sky rocketing interest rates that have deterred new buyers, but this time interest rates have remained low. It would be easy to think that therefore it's the high running costs of all boats that have deterred buyers, but the used sailing boat market (for boats in good order) has remained quite active.

    I think rather than any direct financial impact, I think it's the all prevailing nervousness during this recession that has triggered a huge dose of realism to sweep the market. Admittedly an important sector of our new boat buying public has become much poorer (London based financial workers), but everywhere, the buzz word has been about getting better 'value' in our lives. I think people have reviewed exactly how much they use their boat and questioned whether being locked into all the cost is actually worth it. I think sailing will retract to those who see sailing as central to their lifestyle and those who just thought it 'quite nice' to have a boat, will move on.

    Retraction in the market together with buyers looking for 'better value' would account for the drop in new boat sales but the used boat market staying buoyant.
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