31 Jan 2012

Davos Economic Forum: The outlook for the superyacht industry

By William Mathieson

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The 2012 Davos Economic Forum, which has brought together state and business leaders for five days of macro-economic debate, is underway and the outlook is decidedly bleak.

Speakers and panellists have united in their prediction that the world is in the midst of an unprecedented period of stagnation, characterised by its pandemic nature, with the previously robust Asian economies being dragged into the mire. It is these same economies though, that comprise the biggest source of ‘middle-class’ consumers - the primary driver of economic growth - and it is the job of national governments and business organisations to nurture this class.
 
According to the BBC, one panellist spelled out the gravity of the situation: "You're optimistic if you think this will be over by 2017."  However, it is, "only if we build sustainable supply chains, eliminate waste during the creation and delivery of products... can we underpin the growth of these markets," added one prominent global CEO.

This pronouncement echoes that of Richard Gardiner, owner of Global Services, who spoke at the Global Superyacht Forum in November 2011 of the need to streamline the supply chain process and eradicate the “thousands of man hours lost due to efficiency issues.”

Commenting on the sentiment conveyed at the Davos Forum, Gardiner added:

“The only way we’ll achieve [a more efficient supply chain] is with the support of SYBAss and the yards. They are willing to do it but they need to do it in conjunction with everyone else.

“You’ve got to have someone to force the issue and the shipyards are the only ones that can make it happen.”



The topic that dominated the forum was the fate of the Eurozone in 2012, with a near universal belief that there had been a partial failure on the part of its members to take sufficient action to damage-proof its weaker economies. Speakers roundly predicted that the Eurozone economy, and that of Europe as a whole, would contract this year, causing wider stagnation across the globe.

But for Theo Hooning, Secretary General of trans-national body SYBAss, the quality of European superyacht output, coupled with the global distribution of its clients, will protect the superyacht industry in the region in 2012.  Hooning conceded that, with a gradual decline in demand in recent years, the European market will not be one of growth in2012, but he was confident that its position of primacy would ensure it remained robust.

As Hooning explained: “The superyacht industry is such a global one that these companies are competing against each other in ways that transcend regional boundaries; it is more to do with price and quality. Because of that I think the well established names have more chance of survival than the new guys, many of whom don’t have a [proven] track record.”

During the boom years, demand consistently outstripped supply, and impatient owners were forced to seek alternatives to the established builders operating at full capacity. Now though, the situation is different, with the big European yards readily available to respond to new build requests.

“I don’t think the doom and gloom hanging over Europe will affect the European superyacht industry,” Hooning added. “The fate of the global economy does have the potential to affect the market but not [the Eurozone].”

The outlook for 2012 will be among the topics being discussed at the upcoming Superyacht Fiscal Summit, taking place at London's Glaziers Hall on 28 March.



Related Links

Global Services Profile | Global Services Website

SYBAss Profile | SYBAss Website

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