SUPERYACHT #509
September 2004
Article selected from our quarterly magazine dedicated to the largest
and most luxurious boats with information, interviews, technical
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Article by
Tommaso Nastasi
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THE LUXURY YACHT MARKET
Estimates, analyses and comparisons
The luxury yacht market, due to the features of the target
and to market trends, is the most appetising and interesting
business area for pleasure craft. This attractiveness is
confirmed by the recent entry of new international players
some of whom already operate in the luxury goods segment:
names such as Bulgari, Ferragamo, Dredner Kleinwort Capital,
etc.
The Italian boat-building industries have taken on a role of
prime importance within the global luxury yacht market, with
competitive abilities at international level.
The growing degree of interest in the luxury yacht business
derives essentially from two factors. First of all the
market trend of luxury yachts which is clearly counter to
that of many other economy sectors(fashion, jewellery etc.).
It may seem incredible but Italian boat builders have did
not defect in the face of the new world economic-political
scenario. On the contrary the trend towards increasingly
larger vessels continues. It is also for this reason that
the pleasure craft sector today is among the leading aspects
of the Made in Italy movement, to such an extent that it is
natural to speak of Nautical Made in Italy
The other element is the evolution of the concept of luxury
which today sees a new paradigm emerging, advanced luxury,
within which there is considerable competitive positioning.
In comparison with "traditional luxury", "advanced luxury"
is fundamentally characterised by greater "intimacy and
familiarity" with the "top of the range" rather than the
mere exterior trimmings of luxury.
Figure 1 shows the pyramid of luxury; as may easily be seen,
luxury yachts stand precisely at the peak, representing par
excellence the high level of luxury (yachts and "large
yachts") and of super-luxury(maxi yachts).
Figure 1: Luxury yachts within the luxury pyramid
Source: Own Data
How much is this market worth? The global pleasure boat
market amounts to an overall 15.000 million euros (figures
for 2002), showing a growth of 4% since the year 2000.
Italian boat-building industries, second only to the
Americans, have a market share of 11% and at the same time
have experienced an increase in turnover of 44% as against
the values of 2000. In other words, the Italian boat-
building industry, in only 2 years and within a context of
recession and uncertainty regarding global economy, has
grown by almost 50%. Luxury yachts have played an important
part in achieving this record.
Given the foregoing it is natural to wonder about the value
of the luxury yacht market: about 6 billion euros (estimate
resulting from data processing supplied by internationally
accredited sources).
This means that 40% of the world yacht market comes from
vessels that can be classified within the range of "luxury
yachts" (see figure 2).
If these are the data, it's important at this point to
understand the world trend in the luxury yacht market. Here
too the results are astounding: statistical estimates state
that in only 4 years the luxury yacht market grew by 20%
from 5.000 million euros to the 6.000 million of 2002. An
important development that demonstrates the considerable and
growing attractiveness of the international luxury yacht
business.
Figure 2: Luxury yacht market variations (2002)
Source: Own processing of Icomia, Ibi and Ucina data
The top range of the luxury yacht market is represented by
superyachts (pleasure craft longer than 24 metres) and in
recent years there has been considerable dimensional growth,
going against the trend of many other segments of the luxury
market. Events such as the 11th September attack on the
World Trade Center, the war in Iraq, the loss of wealth due
to stock market crashes, fears about SARS, devaluation of
the dollar and the yen, had absolutely no effect on this
market segment, showing an outstanding anti-cyclic factor.
This last is due to the fact that in spite of the adverse
conditions of world economy the number of millionaires
continues to grow and the new scenario of uncertainty has
increased the desire to buy and live ultra-luxury
experiences.
Figure 3 compares the growth of superyacht orders from 1999
to 2004. More specifically, in only 6 years the demand for
superyachts has increased by 80%, largely in terms of motor vessels.
Figure 3: Growth of the superyacht order book
Source: Own processing of SBI/Icomia data
Figure 4 shows the composition of the superyacht market both
in relation to the main source of propulsion and with
reference to the boat shape. From the quantitative analysis
it emerges that motor superyachts represent 88% of the world
market as against 12% sailing superyachts. Within the macro
segment of motor superyachts, the main micro segment is
represented by flying bridge vessels (92%).
Figure 4: The superyacht market expressed in quantities (2004)
Source: Own processing of SBI/Icomia data
In analysing the dynamics of the luxury yacht market one
cannot avoid mention of a spreading phenomenon: open luxury mania.
This is the result of the growing number of orders for open
or hard top high performance vessels with modern, sporty
lines. It is not by chance therefore that many boat-building
industries have decided to horizontally differentiate their
business model, entering into the open vessel segment.
Research has demonstrated that the luxury open market has
grown by more than 50% over the last 2 years. Open luxury
mania finds expression in a new customer-profile that is
coming to the fore: members of the new ruling class, a
reflection of the latest paradigm of "modern advanced luxury".
But the questions we naturally ask ourselves do not end here.
What is the position of Italian boat-building industries in
the super-luxury yacht market?
Luxury yachts made in Italy are, for their prestige and
intrinsic product features, appreciated and sought after in
all the world's marinas.
Figure 5 shows and compares the market slice of the Italian
boat-building industry within the superyacht market and the
main segments thereof.
Figure 5: The market slice (in quantities)of the Italian
boat-building industry within the superyacht market (2004)
Source: Own processing of SBI/Icomia data
More specifically, Italy can boast a very high share of the
market within the super-luxury open segment (96% of luxury
opens sold in 2004 were designed, produced and marketed by
Italian shipyards).
Italy can also boast a high market share in the segment of
flying bridge vessels, the predominant pleasure craft.
Italian boat-builders have an overall 37% share of the world
superyacht market.
What emerges clearly from these data is the competitive
advantage of the Italian boat-building system in the luxury
yacht segment.
What are the luxury yacht market forecasts? My own estimated
forecasts are favourable, given that the unexpressed market
(the market yet to be won) is equal to 50% of the whole
potential market.
It therefore goes without saying that Italian luxury yachts,
on a par with other economic sectors, fully represent the
Made in Italy concept worldwide.
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