The European pleasure boat market was hit hardest by the global economic crisis. Between 2008 and 2009, the market shrank by an astonishing 35.7% - an unprecedented decline. According to a recently published study by Interconnection Consulting, manufacturers however reacted swiftly and could reverse the dynamics of the market. In 2010, boat sales increased by 3.000 units and the 90.000 unit barrier was reached again. This means a growth rate of 2.8% in 2010 which lead to a market volume of 7,97 billion € by the end of 2010.
The market is full steam ahead...
After the 2008 stagnation and the 2009 slump, the market is finally growing again. Interconnection expects this trend to continue, and forecasts even accelerating growth rates for the next three years. As the economic outlook is less grim and customers can count on stable incomes in the mid- to long-term, they place more orders. In terms of market units sold this translates into 6.0% average growth for the 2010 - 2013 period, whereby growth is fuelled by the motor boat segment. While the number of motorboats sold is expected to grow by an average of 6.2% in the period, sail boats will only grow by 2.5%. Interconnection forecasts 86,000 motorboats to be sold by the end of 2013.
... but navigators are cautious.
While these numbers seem encouraging at first sight, a word of caution is advised. Compared to other luxury industries, the economic crisis hit the boat market deeper and more permanently. Many segments within the boating industry will not be able to present pre 2008 sales figures by 2013. This is, among other factors, due to the rise of alternatives such as chartering, cruises or any other form of luxury vacation. In times of economic uncertainty short-term purchases such as these are favoured before long-term purchases.
Chartering is the future The most visible upturn is without a doubt chartering. Chartering services are taking precedence, as customers become more conservative and value ownership less than ever. From the manufacturers' perspective, adaptations in sales and marketing will be necessary in order to deal with this new dynamics. "This shift in client base, from private customers to B2B partnerships, needs to be addressed with due care and attention," says Adib Reyhani, Market Analyst with Interconnection, and recommends "to refocus on sales and marketing strategies in order to target professional corporate procurement rather than individual buyers."
Northern Europe Sails Ahead Looking at national European markets, growth can be seen throughout the continent. Unsurprisingly, average national growth rates are rather diverse across the field and vary between 5.1% and 12.4% for the 2010 - 2013 period. The Northern European countries together with the Benelux are the top performing national markets - with 12.2% and 12.4% growth respectively. At the other end of the spectrum, the Eastern Mediterranean Region (among others Greece, Hungary, Croatia, Austria) will only be able to grow by 5.1% in value and 1.8% in units. Undoubtedly, the differences in growth between motorboats and sailboats can be attributed to diverging growth patterns across the continent. Interestingly, the traditional sailing regions (Greece, Croatia...) will grow more slowly in the years to come. This will lead to a general contraction of the sailboat sector.
Leveraging Market Effects Through Prices Looking at the competitive field, large manufacturers were able to challenge their competitors through price adjustments. Lower prices enabled them to increase their sales measured in units of boats sold. When it comes to turnover, more complex patterns emerge. Looking at the top 5 manufactures, one can observe a fierce price-driven battle. Two manufacturers accepted a decrease in revenue, concentrating their effort on increasing their sales in terms of units only. This leads to a situation were market shares in value and in quantity respectively move in opposite directions. Moving on to the fifth to tenth place, three of those manufacturers, were the best performers in the last year, reaching growth rates of up the 15%.
(More than) a handbreadth water under the keel So, while some are still licking their wounds, others have already moved on. The ability to see opportunity where others saw crisis provided an advantage of innovative concepts that can now surface and be implemented.
The boats market is still to experience its green revolution and it remains to be seen whether the industry is ready for it. The market certainly is.
The market is full steam ahead...
After the 2008 stagnation and the 2009 slump, the market is finally growing again. Interconnection expects this trend to continue, and forecasts even accelerating growth rates for the next three years. As the economic outlook is less grim and customers can count on stable incomes in the mid- to long-term, they place more orders. In terms of market units sold this translates into 6.0% average growth for the 2010 - 2013 period, whereby growth is fuelled by the motor boat segment. While the number of motorboats sold is expected to grow by an average of 6.2% in the period, sail boats will only grow by 2.5%. Interconnection forecasts 86,000 motorboats to be sold by the end of 2013.
... but navigators are cautious.
While these numbers seem encouraging at first sight, a word of caution is advised. Compared to other luxury industries, the economic crisis hit the boat market deeper and more permanently. Many segments within the boating industry will not be able to present pre 2008 sales figures by 2013. This is, among other factors, due to the rise of alternatives such as chartering, cruises or any other form of luxury vacation. In times of economic uncertainty short-term purchases such as these are favoured before long-term purchases.
Chartering is the future The most visible upturn is without a doubt chartering. Chartering services are taking precedence, as customers become more conservative and value ownership less than ever. From the manufacturers' perspective, adaptations in sales and marketing will be necessary in order to deal with this new dynamics. "This shift in client base, from private customers to B2B partnerships, needs to be addressed with due care and attention," says Adib Reyhani, Market Analyst with Interconnection, and recommends "to refocus on sales and marketing strategies in order to target professional corporate procurement rather than individual buyers."
Northern Europe Sails Ahead Looking at national European markets, growth can be seen throughout the continent. Unsurprisingly, average national growth rates are rather diverse across the field and vary between 5.1% and 12.4% for the 2010 - 2013 period. The Northern European countries together with the Benelux are the top performing national markets - with 12.2% and 12.4% growth respectively. At the other end of the spectrum, the Eastern Mediterranean Region (among others Greece, Hungary, Croatia, Austria) will only be able to grow by 5.1% in value and 1.8% in units. Undoubtedly, the differences in growth between motorboats and sailboats can be attributed to diverging growth patterns across the continent. Interestingly, the traditional sailing regions (Greece, Croatia...) will grow more slowly in the years to come. This will lead to a general contraction of the sailboat sector.
Leveraging Market Effects Through Prices Looking at the competitive field, large manufacturers were able to challenge their competitors through price adjustments. Lower prices enabled them to increase their sales measured in units of boats sold. When it comes to turnover, more complex patterns emerge. Looking at the top 5 manufactures, one can observe a fierce price-driven battle. Two manufacturers accepted a decrease in revenue, concentrating their effort on increasing their sales in terms of units only. This leads to a situation were market shares in value and in quantity respectively move in opposite directions. Moving on to the fifth to tenth place, three of those manufacturers, were the best performers in the last year, reaching growth rates of up the 15%.
(More than) a handbreadth water under the keel So, while some are still licking their wounds, others have already moved on. The ability to see opportunity where others saw crisis provided an advantage of innovative concepts that can now surface and be implemented.
The boats market is still to experience its green revolution and it remains to be seen whether the industry is ready for it. The market certainly is.
