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Old 03-10-2014, 05:56 PM   #41
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BnB-there are several issues that bode well for Hatteras and similar US builders that have the infrastructure and labor force. Chief among these is the fact that the cost differential between building in the US and offshore has decreased substantially over the last 15 or so years. 20 years ago, there was about a 35% differential between Taiwan and the US. That now is down in the 8-10% range. China is now the "cheap" producer, but that is changing as well. PAE (Norhavn) moved to China, Selene started in China (and suffered for 5 years or so as a labor force was built). Technology has lessened the labor component of boat building substantially. Hatteras was a leader in "modular" building, in using lightweight infused panels with veneers rather than solid wood among other innovations. As a greater % of production cost is in materials, the more even the cost is between US and offshore builders. US builders can be cost competitive, and more than quality competitive, with the Far East builders. As Hatt is learning as it moves to larger hulls, 100'+, its primary cost competition is from European builders, not the Far East. US builders can easily be cost competitive in that market.
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Old 03-10-2014, 05:58 PM   #42
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BandB, you sound like a well connected industry insider give all your knowledge of the inner drama at these companies. Doing a little market research? Care to share a little more of your background?
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Old 03-10-2014, 06:32 PM   #43
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BnB-there are several issues that bode well for Hatteras and similar US builders that have the infrastructure and labor force. Chief among these is the fact that the cost differential between building in the US and offshore has decreased substantially over the last 15 or so years. 20 years ago, there was about a 35% differential between Taiwan and the US. That now is down in the 8-10% range. China is now the "cheap" producer, but that is changing as well. PAE (Norhavn) moved to China, Selene started in China (and suffered for 5 years or so as a labor force was built). Technology has lessened the labor component of boat building substantially. Hatteras was a leader in "modular" building, in using lightweight infused panels with veneers rather than solid wood among other innovations. As a greater % of production cost is in materials, the more even the cost is between US and offshore builders. US builders can be cost competitive, and more than quality competitive, with the Far East builders. As Hatt is learning as it moves to larger hulls, 100'+, its primary cost competition is from European builders, not the Far East. US builders can easily be cost competitive in that market.
For sales in the US, the cost differential is virtually nil now. Even the 8-10% advantages you speak of are not the same build. A rule of thumb in all things: If it's light, China has huge advantages. Heavy, not so much. It's very simply the cost of freight and transport.

The leading yacht builders are Italy, Netherlands, Germany, UK and US. None of the top sellers above 80' are China. Going smaller, people certainly do not buy Krogen, Nordhavn or Grand Banks because of price. There are companies competing on price like Ocean Alexander, Cheoy Lee, Marlow. Notice Ocean Alexander decided to build their 120' in the US at Christiansen.

Now there are US manufacturers struggling like Trinity and Burger. But blaming it all on economy or other factors always bothers me. How do they explain Benetti and Sanlorenzo?

I wish there was a US builder of 35-60' Trawlers plus semi planing vessels. A US Grand Banks, for instance. Well, wish Grand Banks was in the US.

The other place a US builder should have an advantage is time from order to delivery. It's possible. Look at Westport and their deliveries.

I think Sea Ray returning to the larger sizes will be interesting. I wish they had more sedan bridges and hadn't moved the majority of that to Meridian. I think Carver would have a much larger share today if not for the debacle that Genmar turned out to be. Perfect size for many people. And cost isn't the issue. The Marquis side has flash and style but the Carver side has utility. I wouldn't underestimate Cruisers either.

I spent my career in industries where the US had more and more trouble competing but boats is not one of those industries it should happen in. How many runabouts do you see on the lakes from China? None. Now on smaller boats one can argue too much got tied to two companies, Brunswick and Genmar.

Well, I'm waiting for the Great American Trawler and Cruiser Company. Maybe one day.
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Old 03-10-2014, 06:42 PM   #44
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BandB, you sound like a well connected industry insider give all your knowledge of the inner drama at these companies. Doing a little market research? Care to share a little more of your background?
My background was industry, manufacturing. Final position was CEO. Fortunate enough to work for a company owned by the best investors there are. As to research, it's part of my nature. Always did it. Knew my competitors, suppliers, customers and always looking for ideas. So when I move to Fort Lauderdale and get ready to buy boats, it's only natural. Now my wife was a teacher, actually developed and implemented reading programs. She's the educated one with her Doctorate. Oh and if you called her Dr. she would be quite displeased. But we always would just get curious, hit the web and look up things.

I'll let her type a moment since she wants to say something.

Wifey B: My man's like totally freaking insane sometimes. OCD in a good way. He looks at a boat, researches the brand, then why isn't it doing better, then the company, then the investors, then the individuals, then follows them on the Singapore exchange. hehe. He's obsessed with a pursuit of knowledge and I think he corrupted me in that regard but I corrupted him other ways. But sometimes he doesn't realize he's wired so different and strangely, so special to me. It's just like if we're watching television and something comes up we don't know about, tablets out and google. Keeps things interesting. Funny man thought he'd retire completely. Well, he is mostly, but business is a hobby. Ok, now I've answered the question.

Hubby B: Guilty as charged.
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Old 03-10-2014, 06:43 PM   #45
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Not too sure about your 80+ statement there. Ocean Alexander, Horizon, Hargrave, Offshore, the aforementioned Cheoy Lee, Marlowe, Nordhavn, OA (despite the Christensen deal) to name a few are all quite active in the 80+ production market. All Chinese or Taiwanese.

Agree the shift is towards America, witness the up tick Hatteras and others are seeing in that range. A lot of trawler types would love to see Hatteras revive the LRC line. Funny thing Lazzara, who has gone totally "Eurotrash" got their start building Gulfstars and subsequently the original Viking MYs.
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Old 03-10-2014, 06:50 PM   #46
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Not too sure about your 80+ statement there. Ocean Alexander, Horizon, Hargrave, Offshore, the aforementioned Cheoy Lee, Marlowe, Nordhavn, OA (despite the Christensen deal) to name a few are all quite active in the 80+ production market. All Chinese or Taiwanese.

Agree the shift is towards America, witness the up tick Hatteras and others are seeing in that range. A lot of trawler types would love to see Hatteras revive the LRC line. Funny thing Lazzara, who has gone totally "Eurotrash" got their start building Gulfstars and subsequently the original Viking MYs.
Yes, they are active, but not even in the top group with Benetti, Sanlorenzo, Sunseeker, Westport in number or dollar value. Honestly I was surprised the first time I looked at a survey of sales by builder. Marlow and Nordhavn have sold very few 80+ and even fewer 100+. Now below 80, a lot of volume. Still can't believe Nordhavn killed the 47.

Yes, the LRC line was nice. But once companies move to the larger sizes they seem to move out of the smaller. The various 40's were well designed. I hate that Westport dropped the Pacific Mariner 65. Just another example. Add 164, drop 65. I'd love to see Hatteras with something under 60.

Oh and to show that US producers can compete, sure do dominate SF's.

Not saying one can't build successfully in China. Some have been at it a long time. Just saying it's not the cost advantage it is in other industries.
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Old 03-10-2014, 07:04 PM   #47
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Bennetti? I don't think so. "Smaller" production guys like the Ferretti and Azimuth marques maybe. I'd be careful putting too much stock in some of the industry numbers. Plus keep in mind for the past few years a good deal of the action has been driven by Russians and Arabs, especially with the rise of the Emirates area as a major yachting center. It's a fun discussion, but that's all it really amounts to.
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Old 03-10-2014, 07:18 PM   #48
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Bennetti? I don't think so. "Smaller" production guys like the Ferretti and Azimuth marques maybe. I'd be careful putting too much stock in some of the industry numbers. Plus keep in mind for the past few years a good deal of the action has been driven by Russians and Arabs, especially with the rise of the Emirates area as a major yachting center. It's a fun discussion, but that's all it really amounts to.
Don't forget all Benetti includes Azimut. So combined Benetti is actually number one. Last year for dollar volume in 80+ it was Benetti, Sanlorenzo, Ferretti, Princess, Sunseeker, Lurssen, Amels, Feadship, Overmarine, Gulf Craft. Benetti sold 79 boats over 80', Sanlorenzo 39, Ferretti 32, Princess 30, Sunseeker 26. The point is that Horizon was the leading Chinese builder with 16 in that range.

In total number of projects by country it was Italy 274, UK 71, Turkey 70, Netherlands 65, US 63, Taiwan 56, China 26.

Now I can't prove the accuracy of these numbers but they're not inconsistent with other surveys and I think they do clearly show how well Italy, the UK and the US can compete.
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Old 03-10-2014, 07:21 PM   #49
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Don't forget all Benetti includes Azimut. So combined Benetti is actually number one. Last year for dollar volume in 80+ it was Benetti, Sanlorenzo, Ferretti, Princess, Sunseeker, Lurssen, Amels, Feadship, Overmarine, Gulf Craft. Benetti sold 79 boats over 80', Sanlorenzo 39, Ferretti 32, Princess 30, Sunseeker 26. The point is that Horizon was the leading Chinese builder with 16 in that range.

In total number of projects by country it was Italy 274, UK 71, Turkey 70, Netherlands 65, US 63, Taiwan 56, China 26.

Now I can't prove the accuracy of these numbers but they're not inconsistent with other surveys and I think they do clearly show how well Italy, the UK and the US can compete.
In total I believe Ferretti is the world's largest boat builder. I guess in some way they're Chinese as they're owned by a Chinese company.
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