This job isn’t all bright sunshine, blue sky, and bodacious boats. There’s another side too, exemplified by the dozen or so boat shows we attend every year. The show locations—Cannes, Genoa, London, Monaco, Sydney—sound glamorous but they have their commercial aspects too. Besides first looks at new models, these foreign exhibitions offer a global business perspective because for builders there, export is such an important part of their livelihoods.
A disturbing theme at this year’s European shows was the virtual writing off of the U.S. market for 2012 and maybe beyond. Many foreign builders feel our economy and political system are so mucked up that even if we can manage to get things back on track, it’ll be a long time before Americans feel secure enough to spend big dollars on big boats.
So where do these builders plan to turn? The same place as everyone else—BRIC. That’s Brazil, Russia, India, and China, where many European builders already have sales offices and even factories. Seems logical. After all, as I write this the International Monetary Fund projects 2012 GDP growth rates of 9.5 percent for China and 4.1 percent for Brazil, compared to just 1.1 percent for the 17 Eurozone countries and 1.8 percent for the United States. That could logically translate into more BRIC people with more disposable income, allowing them to purchase more luxury items, like boats.
Yet emerging markets face their own hurdles, like inflation, entrenched bureaucracies, corruption, political instability, and income disparity. Brazil’s economy is strong right now, but its middle class is only about one-third the size of ours. Russia, India, and China have a near-total lack of infrastructure such as marinas and boatyards.
Then there’s mentality. When Chinese and Indian consumers buy boats, they often don’t know what to do with them because they value them not as recreational vehicles, as we Americans do, but as stationary status symbols. A 120-footer I recently toured is a perfect example. With nearly 7,500 total horsepower, she’s capable of over 30 knots, yet according to her captain, her Chinese owner will use her only for business meetings and dinners, and she may never even leave the harbor.
Of course, we’ve got our own problems. But any builder who writes off the whole of the U.S. turns his back on the world’s largest group of dedicated, experienced, and knowledgeable boaters, people who have both the means to purchase boats and the mentality to use and appreciate them. On that basis, no other country compares with the United States.
When you’re a boat designer, you deal with all kinds of people, from hard-charging CEOs to dreamers. But they all must follow the laws of physics. Our Sightlines columnist Michael Peters lays down the law.
See what he has to say here. ▶