This time last year it was impossible to predict what effect the economic downturn would have on the marine industry. Many were already seeing a reduction in business, but no-one could say how far the market would fall or for how long.
The Federal Association of the Water Sports Industry (BVWW) in Germany has released figures suggesting that the market is recovering. The study also says that manufacturers are missing opportunities in the market by not creating products to tempt entry level customers.
According to the BVWW, in the 2008/2009 business year, the European boat industry felt the full impact of the global economic crisis. Ultimately, the decline in production may be approximately 60% compared to the previous year. Total sales of boats and yachts will thus be reduced from approximately 8 thousand million euro to a good 3 thousand million euro; total sales of maritime products and services will decline from approximately 25 thousand million euro to about 18.5 thousand million euro (- 26%).
The German market has held its own better than most of the other European aquatic sports markets. For the 2009 calendar year, the boat industry expects a decline of around 30% in sales. Sailing and motorboats are equally affected.
Equipment, accessories, service
The areas of equipment/accessories, repairs/service, and aquatic tourism have proven to be significantly more stable economically. The some 490,000 German boat owners continue to invest in maintaining the value of their boats and yachts. The charter market benefited from the general trend of enjoying the finest days of the year locally. The fleets stationed in Germany are particularly well booked.
The business survey by the association at mid-year confirms this estimate. 71.8% of the companies in the equipment area (service/maintenance 80.6%, charter 68.8%) judge the business situation to be as good as or better than the previous year. In the area of new boats, just under a quarter of the companies polled share this view.
Seen overall, the Federal Association of the Water Sports Industry expects total sales for 2009 to be 1.65 thousand million euro for the German aquatic sports market. That means a 10.5% decline in sales from the previous year.
In line with the global economic developments, export volume has clearly shrunk. In the first half of 2009, a total of 642 sailboats worth €61.5 million and 740 motorboats worth €56.2 million were exported. Compared to the same period in the previous year, this is a decline in value of 66.5% for sailboats and 62% for motorboats.
In the area of imports, the decline is not as large. In the first half of 2009, sailboats worth 13 million euro (1-6/2008: 23.5 million euro) and motorboats worth 59.4 million euro (1-6/2008: 97.8 million euro) were imported. This corresponds to a decline of 44.3% for sailboats and 39.2% for motorboats.
New boat designs and sinking prices for used boats could spur the market
Interest in boating is uninterrupted. At least 6 million people have a specific interest in sailing and motorboats. Nevertheless, the industry is currently insufficiently able to tap this potential. According to one study by the Federal Association of the Water Sports Industry, in the 1970s and 80s, the industry was able to interest 2.5-3% of every age group in boating. In recent years, this value has declined to 1-1.5%. In line with this development, the average age of boat owners has risen to 56.
In addition, the results of the study show a great interest in smaller boats which can be used for weekend sailing trips. For example, 50% of sailboats were in the 5.5-8.5 m length class. Almost no standard boat manufacturer produces in this boat size.
New concepts are gaining ground. Thus, HanseYachts AG has announced that they will be adding reasonably priced, trailerable daysailers and weekenders to their production range. This not only meets the recreational behaviour and budgets of young families, but also promotes early market loyalty.
Another development should favour an entry into boating. Today, used boat prices have already been clearly reduced. This development will continue to strengthen with the growth of the used boat market accompanying the demographic developments, thus allowing a low-cost entry into boating.
All signs indicate that the boat market is recovering. Nevertheless, a radical recovery is not in sight, despite slightly improved general economic data. Companies’ forecasts are correspondingly cautious: only 46.6% (previous year: 56.2%) believe that the economy in the middle-term will be as good as or better than in the previous year.
Further development will also depend on whether the banks will once again fulfil their duty of providing the economy and consumers with liquid funds. Against this backdrop, inventory and sales financing concepts by banks or manufacturers play a major role.
Nevertheless, the industry is going to boot 2010 with verve and optimism. The fascination of aquatic sports in general, new innovative boat designs, and attractively priced special models will give the market a new stimulus.
Source: Boot, Dusseldorf