Luxury boats helping keep British ship builders afloat

Sunday, January 9, 2011
By Avril Ormsby, Reuters

LONDON--Britain's marine industry, buffeted by falling revenue and employment last year, is looking to new markets and models to steer it into calmer waters.

The mood at the London International Boat Show on Friday was one of resilience, with the number of exhibitors the same as last year and visitor numbers expected to be up at 120,000, but below the recent three-year average of 122,000.

“2010 was a difficult year for everybody — boat builders, distributors and customers,” said Will Green, sales director at Princess Yachts boat builders, in southwest England.

The marine industry has seen a six percent fall in turnover and a five percent drop in employment during the past financial year, said the British Marine Federation, which represents businesses from makers of canoes to superyachts.

But its Executive Director Howard Pridding said its leading manufacturers had survived the recession, with no major company closures.

One of the strongest sectors was the luxury powerboat market. London distributors for Sunseeker International said its order book for 40-meter (130 ft) boats, which can cost about 15 million pounds (US$23.17 million), was full until late 2012.

“Friends of mine come to dinner parties and say 'you must be finding it tough,'” said Christopher Head of Sunseeker's London distributors. “No, we are busy.”

Princess Yachts is seeking planning permission to expand its operation, taking on 200 people, to help build and test a new fleet of 50-meter super yachts.

Britons splashing out millions on new boats tend to be industrialists and builders, with the upcoming bonus season in London's financial district, expected to be 7 billion pounds, unlikely to make much of an impact.

Powerboat manufacturers, which make up more than four-fifths of the industry, believe new markets, such as China, North Africa and Brazil, will offset the downturn in others including Italy, Ireland and Croatia.

The market in Greece has also tailed off as the government chases taxes on luxury items. But despite the austere economic measures needed to tackle a huge budget deficit, some boat manufacturers are still reporting strong interest.

“Some of the richest ship owners are Greek. They've made a lot of money from shipping, but they can't be seen to buy a new, high-cost toy,” Head said.

Smaller boats, 48 ft. to 88 ft, have been affected by one of the worst recessions in decades, with some British boatyards cutting back production by 15 percent.

Boat builders recognized that some people had held off buying a new boat over the past three years.

“We are hopeful that in 2011 there will be a combination of the fact that people won't want to put their life on hold anymore and want to continue living and may also see the start of a recovery,” Princess' Green said.

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