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A visitor takes photos of a yacht displayed at a luxury show in
Guangzhou. Chinese yacht makers have seen falling demand in the overseas
markets.
During the financial crisis that eroded international yacht orders,
shipbuilder Zhangzhou Yihong Yacht Industrial Co Ltd turned adversity into
advantage by transforming itself from an original equipment manufacturer (OEM)
for an Italian yacht brand into a manufacturer of its own brand, the Sea Stella.
"Our overseas orders are falling sharply, but this crisis also gives us more
time to make a strategic shift. In the way of building up our own brand, we are
trying to provide a custom-made design to our clients, and this is proving
effective," said Ren Hongting, general manager of Yihong Shanghai Experience
Center.
Amid the international financial crisis, global yacht sales tumbled 45
percent in 2009, and 80 percent of yacht manufacturers were forced to suspend or
shut down their operations.
Most Chinese yacht makers are export-oriented, and were affected by the
global decline. A report released by the China Association of the National
Shipbuilding Industry (CANSI) showed that China's shipbuilders exported a total
of 1.77 million yachts and ships in 2009, worth $170 million, a sharp decline
from 2.16 million yachts in the previous year.
But at the same time, shipbuilders like Yihong sense a yacht boom in the
domestic market, and they are taking the global economic downturn as an
opportunity to expand their domestic market share and build up their own brands.
According to Ren, unlike foreign-branded yachts, which have similar styles
and decor, Chinese yacht builders are more flexible.
"We add many entertainment facilities into the yachts according to the
preferences of Chinese customers, such as karaoke rooms, and mahjong tables. Our
custom-made products have attracted some orders from domestic buyers," she said.
Another yacht maker, Shanghai Double Happiness Yacht Co Ltd, met the same
challenge. "The toughest time started in late 2008, when our overseas demand
ground to a halt. No new orders came and the market was deadly quiet," said Zhao
Lina, marketing manager of Double Happiness.
In order to play down the negative effect of the financial crunch, Double
Happiness paid special efforts to technological upgrading and product
innovation. The strategic move soon paid dividends. Last year, the company
received more than 20 yacht orders, and its sales revenue grew nearly 20 percent
year-on-year.
The promising outlook for China's yacht market has absorbed a lot of
investment. Hong Kong-based Tongtec Yachts set up a plant in Shanghai in 2005,
and now it only has some ship maintenance facilities left in Hong Kong.
"Our yachts are cheaper in price, and we provide clients with better
after-sales service. Domestic purchasers can have their yachts repaired or
maintained in Shanghai, and this is our advantage over other imported yachts,"
said Ren Chanyu, assistant to the general manager of Tongtec.
Millennium Marine Ltd is a subsidiary of Zhejiang Aluminum Industries Group.
Eyeing the growing market, its parent company gives solid financial support to
the yacht maker."Yacht making is a sunrise industry in China, and we have a
sufficient capital flow," said Xu Lian, assistant to the chairman of Millennium
Marine.
Founded in 2008, the yacht making company provides European-standard yachts
for both the domestic and international market. In November 2009, Millennium
Marine spent 100 million yuan to purchase Italian luxury yacht brand Dalla
Pieta.
The bustling yacht exhibition currently under way in Shanghai shows the
buoyant sentiment of the domestic yacht building industry. The 15th China
International Boat Show (CIBS), running from Thursday to Sunday, is showcasing
more than 200 yachts.
"There is a misleading concept that yachting is only a leisure activity for
the super-rich. Of the 17 million yachts in the US, 80 percent are medium- and
small-sized worth less than $50,000. In Europe, 84 percent of the yachts are
worth below 50,000 euros," said Yang Xinfa, deputy secretary-general of CANSI.
"We are trying to correct the wrong impression and make yachting an affordable
pastime to middle-class people," he said. |
