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Yacht industry sails ahead

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Foreign players

Foreign yacht manufacturers are also expecting a boom and they're already eyeing the Chinese market.

The interior of the Fortuna, a luxury yacht. It made its maiden voyage on May 18 in Qingdao, Shandong province. [Photo / China Daily]

For instance, the Hong Kong-based Jebsen Marine plans to set up eight dealerships in Beijing and other coastal mainland cities over the next two to three years, in a bid to meet the rapidly increasing demand for luxury boats.

And other companies are also vying for the Chinese market.

"China now takes the No 1 position in our global strategy, as the emerging markets led by China are offsetting our waning business in mature European markets, which were seriously impacted by the economic slowdown," said Bjorn Ingemanson, president of Volvo Penta, Europe's largest industrial and marine power systems provider.

Volvo Penta invested 500 million yuan in the Chinese market in the past three years, and the rising leisure boat market in China will be the company's major growth engine over the next years, he said.

"China is somehow like an early teenager in the yacht industry, eager to learn and growing fast," he said.

In 2012, Volvo Penta sold around 5,000 marine engines in China, a 15 to 20 percent year-on-year growth.

The yacht engine builder is now targeting 15 percent annual growth in the coming years, Ingemanson said, though the business in China is still relatively modest compared with those in Western markets.

"We will see a sharp growth trend there," he added.

He said that his confidence comes not only from the rising local market, but also from the fact that more European-made boats are being imported into China.

Data from the CCYIA showed that the number of boats imported to China increased 63.27 percent year-on-year in 2012.

The United Kingdom and Italy are the two main exporters, industry insiders said.

"International yacht manufacturers have a very bright outlook in the Chinese market, as their sales in China are increasing sharply," said Zheng at the CCYIA.

A growing number of European yacht manufacturers are planning to set up plants in China.

At the same time, domestic companies are also acquiring foreign players.

In 2012, China's equipment manufacturer Weichai Holding Group Co Ltd - the largest subsidiary of the Shandong Heavy Industry Group - bought a 75 percent stake in debt-laden Italian luxury yacht maker Ferretti Group for 178 million euros ($229.53 million).

Other leading yacht brands, including Azimut Yachts, Princess and Sessa Marine, also expressed interest in having production bases in China.

"It's a good (place) for the struggling European marine industry, which shrank by 50 percent compared with 2008," said Ingemanson.

And the move should also be positive for China's yacht industry as the foreign rivals' foray into the local market may help domestic players improve their quality standards and technology amid the intensifying competition, he said.

Meanwhile, Chinese companies are facing two distinct business situations.

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