YACHTING POWER
UK luxury boat maker sets up China unit
A British luxury yacht maker says it will set up a small boat-manufacturing unit in China to make full use of the fair wind in the country’s burgeoning yacht market and to cut costs.
“Our existing yacht manufacturing facility in Poole, England, is unable to handle the growing global demand for luxury yachts, especially from China,” says Stewart McIntyre, managing director of Sunseeker International.
Sunseeker is well-known for the high-speed boats that are seen in James Bond movies. It was recently in the news after Chinese real estate conglomerate Dalian Wanda bought a 91.81 percent stake in the company for 320 million pounds ($495 million).
Although the ownership has changed hands, the company still talks proudly of its British roots. “We have British DNA within us,” McIntyre says.
“The best part of the deal with Dalian Wanda was that there were no job losses. All the 2,400 local jobs in Poole will be protected, while design, manufacturing and the intellectual property of Sunseeker will remain within the UK.”
McIntyre says keeping the business centered in the UK was an essential part of the deal. “It is part of our agreement with Dalian Wanda and more or less on the lines of the deal that Jaguar Land Rover inked with the Tata Group of India,” McIntyre says.
At the same time, McIntyre admits that there are several advantages in teaming up with Dalian Wanda in the Chinese market, especially by building Sunseeker clubs at hotel resorts and creating a new Sunseeker manufacturing facility in China for the domestic market.
Dalian Wanda was set up in 1988 as a residential real estate company. Since 2005, it has diversified into areas such as hotels, cinemas, karaoke centers and department stores.
McIntyre says it would be helpful for Dalian Wanda to include Sunseeker clubs into its hotel resort development plans, so that holiday goers would gain more access and awareness of Sunseeker’s products.
He says the first Sunseeker club in collaboration with Dalian Wanda is already past the concept stage for a hotel resort in Qingdao, Shandong province, and a few more are at different planning stages.
At the same time, Sunseeker will also ensure that manufacturing in Poole remains unaffected. He says currently Sunseeker makes about 200 boats a year and has the capacity to manufacture 400 but, if demand from China exceeds that, it makes sense to manufacture in China too.
McIntyre says there are several advantages of manufacturing boats in China, because it reduces import duties. It will also help in making speedy deliveries to customers, he says.
McIntyre says that with Dalian Wanda’s guidance Sunseeker will be able to make further inroads into the Chinese market.
“There were no objections whatsoever when Dalian Wanda first approached us with the deal earlier this year. We carried out an internal review and collectively decided to go ahead with the proposal,” he says.
Sunseeker established its first presence in China 10 years ago through a partnership with a Chinese distributor. Since then, it has had a challenging but fulfilling voyage in the country.
“At the time, China’s marina infrastructure was poorly served. There were not big enough berths and not enough maintenance engineers, which is required for luxury motor yachts,” he says.
McIntyre says Sunseeker decided to enter the market because his team saw China’s improving marina infrastructure and increasing awareness for yachts.
Despite high sticker prices ranging between 400,000 pounds and 20 million pounds before tax, Sunseeker has a list of loyal customers.
McIntyre says he has met many of Sunseeker’s customers both in China and in the UK, when they come to visit Sunseeker’s factory in Poole.
“Most of the Chinese yacht owners are very sophisticated in their tastes for yachts. They are very exacting in what they want, in what finish they want, in what material they want, and absolutely knowledgeable about the concepts.”