by: Mike Derrett Overview of trade and export trends in the boating industry worldwide. European Boating Industry Conference Genoa 4 th October 2013
Mike Derrett Credentials Boater and Pilot for 50 years 30 years Gulf/Asia experience Owner of Mike Derrett Marine Asia Correspondent for International Boat Industry Industry, Government and Trade Association clients.
CONTENTS Global market update 2013 World Megatrends and the effects on the boating market Developing markets Asia, South America and the Middle East Future markets over the horizon? The third Industrial revolution and boating
Global economy key points Fragile economic recovery in the USA Europe still to emerge from economic turmoil. Many countries weighed down by sovereign debt The Arab spring is creating global uncertainty Asian economies still growing but at a lower rate, the Nylon to ShangHong financial effect is still evident
Global marine industry update 2013 ICOMIA describe the market as Challenging Global boat sales down from an estimated 12.2 billion euro s in 2008 to 5.7 billion euro s in 2013 (Beneteau estimate) Global boat sales growth forecast to be 2-3% in 2014 (Beneteau forecast) European boat sales still declining US - market improving by up to 14% (ICOMIA stats report) Middle East some bright spots Asia main source of optimism for future growth Superyacht sector more confident as UHNWI grow The European boating industry has been the target of Chinese entrepreneurs, more to come?
A buyer s market and a global one
World Megatrends key points for the We live longer and have more leisure time for boating Work and leisure time becomes blurred Hybrid propulsion and automatic driving for cars what about boats? Customers are more creative Not all of us will be happy in this age of instant communication. Will we seek to escape on the water? boating industry
leisure boating -Customer trends High anxiety levels have hit consumer discretionary spending, especially boating Longer decision making time - less emotional more logical Trend is away from showing off (not as evident in Asia) to established boat designs that don t date and to smaller boats that are less expensive to run, easier to manage as boaters get older Custom and semi custom sectors growing Concern about long term boat values. Brand name is a key issues for the buyer (especially in developing markets) Customers average age is getting older in the west, but younger in the east 8
Boating market positioning NICHE DEVELOPED DEVELOPING PROSPECTOR EMERGING
Southeast Asia Estimated 12,000 leisure boats > 5 m in length 25,000 islands Developing network of about 100 marinas with hubs in Phuket, Langkawi, Penang and Singapore Climate is equatorial to tropical giving year-round boating Market growing again since 2008, growth spots are Indonesia and Singapore Strong expatriate market
China, Hong Kong, Japan and Korea Hong Kong 4,400 boats, developed market China 3,000? boats > 5 m and growing The China market is much more than the obvious Japan, most developed market in Asia for boating has lost traction with market decrease to 240,000 boats. Korea is a growing middle class boating market with strong Government support
China market impressions 1
China market impressions 2
China market impressions 3
China market impressions 4
China market impressions 5
India A case study on how boating can lose traction High land cost, planning and political problems have held back marina developments Boating market and industry now restricted by lack of marinas, only one is operational in India Good acceptance of western culture, sailing is a known activity from the colonial days. Long term potential for boating in India is good
Gulf States - Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE High oil prices have prevented economy crash 40,000+ boats > 5m 15,000 boats in Kuwait 98% motorboats in GCC 60+ marinas in the GCC Local builders have 50% market share Outboards dominate Fishing a big activity Strong expatriate market Best markets - Qatar, Kuwait and the UAE
Kuwait boating slipway
Kuwait boat show January 2013
Dubai Marina
Dubai pre owned boat show
Qatar Lusail Marina
Summary - The boating lifestyle in Asia and the Middle East Prestige Entertainment and groups Fishing Diving Speed (exception of China) Paid crew, little do it yourself (DIY) maintenance or repairs Marinas need life style around them
SOUTH AND LATIN AMERICA Strengths Both regions are forecast to grow their economies strongly in the next 7 years at about 4%. Rising Middle class in Brazil and Mexico Key boating markets are Argentina, Brazil, Colombia, Mexico and Venezuela Brazil is already a developed boating market with 70,000 leisure boats over 4.8 m and 47,000 marina berths and 3,000 motors boats over 13m in length Rise in HNWI and UHNWI in both South and Latin America in recent years. Weaknesses The Brazil economy has slowed recently with the global drop in commodity prices High taxes and duties on imported boats Opposition from local manufactures to imports Protectionist markets, low imported boat level into Argentina and Brazil Opportunities Brazilian market has strong sailing sector with ex sailors possibly converting to power Local manufacture to overcome high import tax and possibility to export from Brazil to other regional countries after 2014 Threats Political instability and unrest in some countries 25
New boating markets of the future - is Africa the new China? Africa: Nigeria Tanzania Kenya Uganda Also in Asia: Brunei Cambodia Vietnam Myanmar Sri Lanka
Boats out of reach a major problem for boating Price A major problem in growing the boating market world wide. What is the solution?
The third industrial revolution how it will effect the boating industry The third Industrial revolution - digital manufacturing, is under way Parts manufactured by 5 axis milling machines 3D printing and additive manufacturing are fast developing technologies and produce little wasted material. Mass customisation becomes possible Technology is becoming more important than low labour cost manufacturing returns to developed markets?
Opportunities for the European Industry in new markets Research new markets such as Indo China and Africa with the aid of EBI and EU funding Think long term and build relationships Leverage on European expertise and reputation in the boating industry Develop added value manufacturing for boat building to improve efficiency and quality
Thank you for listening!
THANK YOU Mike Derrett + 44 7860440336 mderrett@mikederrett.com www.mikederrett.com