HONG KONG, July 25 /PRNewswire-Asia/ -- Due to expensive prices and costly maintenance fees, the Yacht industry has been constrained in developing countries. After 30 years of reform and opening up its economy, China is seeing a swelling group of wealthy people, who form a huge potential new market. Also, China's cheap labor costs have attracted many yacht makers to set up plants here for cost-reduction and greater profitability.
The yacht industry has chosen to embark into China at this particular time, and China has chosen to embrace it at the same time. It is a time for the 100-year-old yacht industry to seek new opportunities, also, a time for the Chinese economy to announce to the world that, after 30 years' development, it is ready for new changes. It is this particular opportunity that has triggered a win-win situation.
Cheep labor attracts manufacturers
Yacht building is a labor-, technology- and capital-intensive industry. Building a yacht can take as long as 8 months or even 1-2 years, consuming tens of thousands of man-hours. In Europe and the U.S., hiring a technician costs 30-40 Euros per hour, while in China it is only 8-10 Renminbi. This is a 30- to 40-fold difference in cost. This discrepancy has lured many yacht makers to start up plants in China for reducing manufacturing cost.
Economic development drives yacht spending
30 years of reform and opening up has brought tremendous changes to China, including fostering a vast number of new wealthy people. Various luxury brands are enjoying huge growth in China; the country's newly emerged upper class has a taste for luxury cars, brand clothes and golf. Also, yachts as luxury products are still a young industry, compared with the highly prosperous auto market; its target customers remain small in number. Therefore, it promises huge potentials.
Economic crisis forces industrial displacement
The global slump has acted as a driver, pushing the yacht industry toward China. The financial crisis has forced many European and American consumers to tighten or drop their yacht spending, resulting in a sharp shrinkage of the whole market. While China is relatively less exposed to the crisis, its promising market has become a lifeline for those struggling international yacht makers. China's domestic investors have also begun to turn their eyes towards the yacht industry. There are even cases of Chinese companies taking advantage of this crisis by acquiring international yacht brands at low prices.
Obstacle: Lacking manufacturing expertise and professional personnel
China has attracted several international yacht makers to set up plants here and many of its domestic shipyards are intensifying efforts to develop yacht production lines. That said, the yacht-building craft is very complex and delicate, and the country is still short of yacht making professionals. Many foreign companies choose to base their production lines in China while shipping all the design works and spare parts from their home country to China. On the other hand, China's domestic ship markers are searching hard for professionals and hiring highly-paid foreign experts. Meanwhile, there is a strong tendency towards plundering talents from each other companies in this sector.
Outlook: From plants to brands, from production to consumption
Many Chinese shipbuilding companies are still in the era of processing via foreign-supplied drawings, equipment and spare parts. Scarce yacht-building professionals, a limp industrial supply chain, a less-than-mature market... these are all problems currently vexing Chinese yacht makers, hampering the development of China's yacht industry. A critical step in its future development will be the introduction of its own yacht experts and cultivation of its own technicians/specialists. Also, introducing supporting agencies and publicizing yachts among target customer groups should be priorities. China's vast potential consumer group will prompt more and more enterprises to jump into the yacht industry.
Fairtheworld.com believes that China's yacht market will grow as quickly as its auto market. In reviewing the development course of its auto market, we can gain insight about yacht development. Starting from simple processing and assembling, to further Sino-Foreign cooperation, to building national brands that fly high- the curve shall be similar to that of the auto market, the difference is: it will be much faster.
Fairtheworld.com is currently researching the Pingsha Yacht Industry Park of Southern China, seeking an in-depth understanding of China's yacht industry development. In the future, it will incorporate this understanding into its "Fair N Fair" platform, a global resource integration platform lavishly funded by Fairtheworld. Based on analysis of the industry's status quo and prognosis about the future, "Fair N Fair" is setting up a well-targeted "yacht e-commerce matrix" intended to foster closer cooperation within the sector and promote its globalization. This will benefit the development of China's yacht industry.
For more information, please contact:
Dodona Song
Cell: +86-159-1626-1151
Email: news@fairtheworld.com
