China’s yachting industry is booming on the back of rapidly rising domestic demand, as reports from Shanghai
Unlike the time when China’s yacht industry was still emerging and largely dependent on overseas brands, 2014 has seen more domestic brands catching up with world leaders in the field.
A 22-meter boat from Shanghai Choisi Yacht sold for 17 million yuan ($2.7 million) and Shenzhenbased Speedo Marine, which has taken part in the China (Shanghai) International Boat Show for 10 years, sold three boats during the show for a total of 8 million yuan.
Xiamen Blue Ocean Yachts Development received enquiries from three dealers and 10 customers in the wake of the industry trendsetter during the boat show that ended on April 13.
Established in 2005, Oriental Recreational Products (Shanghai) has also participated in the Shanghai boat show for 10 years.
The company exhibited three boats at this year’s show, and sold two of them. It also received dozens of orders of intent and more than 300 enquiries.
According to industry studies, the yachting industry grows rapidly when per capita GDP reaches $5,000, and China has already reached this threshold — and in some places even achieved per capita GDP of $10,000.
Wang Zhiyue, chairman of Oriental Recreational Products, said he is sure the country’s industry will reach a time of rapid growth within the next decade.
Of course, overseas companies are loath to lose their share of the booming Chinese market, so they also exhibited their products at the boat show, which is usually the first stepping stone to entering the Chinese market.
Five companies, led by business promotion agency New Zealand Trade and Enterprise, joined the boat show as a group this year.
John Cochrane, NZTE trade commissioner in Guangzhou, said the companies want to introduce world-class products and services en masse to Chinese consumers, and reap the rewards of New Zealand’s long expertise in maritime crafts.
However, the path chosen most frequently by companies is cooperation between domestic outfits and overseas brands, especially financial links.
Wang Jianlin, chairman of Dalian Wanda Group and China’s richest man according to Forbes magazine and the Hurun Report, bought the privately owned British luxury yacht manufacturer Sunseeker International last year.
Despite the slowing growth in the industry in the past two years, Ferretti SpA, the renowned Italian luxury yacht maker, managed to achieve growth of between 20 and 30 percent in the Chinese market in 2012 and 2013.
Chen Gang, chief representative of Ferretti’s Shanghai Representative Office, said the company has huge brand name recognition among Chinese consumers, despite prices as high as 40 million yuan for a 24-meter yacht.
Ferretti’s adjusted strategy, which places greater emphasis on the Chinese market, has helped the company achieve fast growth in China, and it established a foreign-held operation and a joint venture in Zhuhai, Guangdong province, last year.
The Italian outfit was one of the first overseas yacht makers to seek financial cooperation with Chinese companies.
In 2012, the Chinese equipment manufacturer Weichai Holding Group Co Ltd based in Shandong province bought a 75 percent stake in Ferretti, which could encourage other foreign companies to follow suit in their attempts to enter the Chinese market.
“In the wake of the global financial crisis, many overseas companies have been seeking cooperation with Chinese companies. Because many of these ventures have been successful, we will definitely see more activity of this kind in the future,” said Chen.
Chen’s view was echoed by Stefan Carlsson, president of Volvo Penta Europe, who said Chinese consumers acknowledge the prestige and professionalism of the Sweden-based manufacturer of marine power systems, and it’s joint venture with Dongfeng Motor Corp Ltd has helped further the company’s “footprint” in the Chinese market.
Although sales rose slightly in 2011 and 2012, the growth slowed in 2013. Now, industry experts predict that next year sales of large or medium-sized yachts will remain on a par with 2013. Combined with the continuous growth of smaller boats and sailing boats, the growth rate of yacht sales will reach 30 percent next year, according to Yang Xinfa, deputy secretary-general of China Association of the National Shipbuilding Industry.
“China’s yachting industry has undergone structural changes during the past few years,” the deputy secretary-general said.
“On the one hand, sales of large and medium-sized yachts have remained sluggish because of strict government policies and the country’s economic slowdown. On the other, demand from owners of small and medium-sized enterprises and the middle class has grown rapidly as people begin to better understand the yachting culture,” Yang added.
As the industry becomes more widely acknowledged, the trend of financial cooperation between China and the international yacht industry will deepen and become more detailed this year, as companies investigate the manufacture of parts and other equipment, Yang said.
The four-day Shanghai boat show, the largest of its type in Asia, and the longest-running industry show in China, attracted 550 exhibitionists from 20 countries and regions this year, along with record visitor numbers of more than 40,000.
That can largely be attributed to the show’s location at the Water Exhibition Center to the north of the Shanghai’s iconic Garden Bridge, and the 48,000-squaremeter indoor arena of the Shanghai World Expo Exhibition & Convention Center, according to Gao Haiyan, director of the high-end business department of the exhibition organizer, Shanghai UBM Sinoexpo International Exhibition Co.
Gao said he has noticed a subtle change in customer philosophy. While in the past, more attention was paid to price — the higher, the better — nowadays customers care more about details such as engine speed and performance, and the facilities on the boat.
“It’s a scenario we’ve been waiting for 19 years. We’re pleased to see that yacht buyers nowadays see the hobby as part of a healthy lifestyle, rather than a luxury that will show off their social status,” he said. Contact the writer at shijing@ chinadaily.com.cn
Five hundred and fifty exhibitors from 20 countries and regions attend the four-day Shanghai boat show in mid-April.
Luxury vessels on display at the 19th China (Shanghai) International Boat Show. The growth rate of China’s yacht industry is predicted to be 30 percent in 2014.