New build predictions
In line with the delivery of The Superyacht New Build Report, our editors share their thoughts…
Business Editor, Rory Jackson, shares his thoughts on the new build market in line with the launch of The Superyacht New Build Report. The read the full breadth of our Editors' Predictions, click here to download the report.
For the first time in my professional life, I can say with relative confidence that the superyacht market is looking strong and that its trajectory, at least for now, is heading only in one direction – up. However, remaining true to form, the booming new-build activity must come with a slice of cynicism and a word of warning.
What is perhaps most promising are the reports that this most recent period of new-build sales has also seen record new entrants to the superyacht market. Why this is the case can be argued ad infinitum. Did lockdowns push people off the fence? Was proof that working from a superyacht is possible enough to convince entrepreneurs it would not be detrimental to their business aspirations? Has money just been so freely available to the rich? Or do people consider superyachts safe-havens? Do I have the answers? No, but my least favourite theory is the last one. The chances are, however, that it is a mixture of a variety of factors, boring as that may sound.
The problem is that we are not an industry with infinite capacity. With reports suggesting that new-build contracts have been signed for beyond 2025 and that slots are filled at essentially all the reputable yards; a capacity issue is somewhat inevitable. Whether this relates to delays affecting future build slots or a lack of top-level subcontractors, the future is not going to be bright across the board – something has to give.
Consider this in line with the rapidly increasing raw material costs and various difficulties with costing superyachts and designing sufficient margin. My prediction is that those that are able to invest and increase capacity will shine and become stronger than ever before, but those who have signed contracts that they aren’t able to back up are going to seriously struggle when the reality of this situation comes to bear.
The superyacht industry is at an incredibly interesting juncture in its development, especially where technologies and materials are concerned. By this point, everyone is aware of the challenges associated with developing and introducing alternative propulsion systems and I am not going to labour point right now. What is worth saying, however, is that as superyachts become more complex, the less likely it becomes that shipyards will be able to retain all of the knowledge and expertise that they require for systems, propulsion and otherwise, in house.
The truth of this has already been proved within various other sectors. Consider, for example, the growing reliance on consultants and integrators within the AV/IT and cyber spheres. This is not, in and of itself, a bad thing by any stretch of the imagination, indeed a reliance on specialists rather than turnkey production is a fantastic way of increasing standards and streamlining costs. However, it does mean that the consultative, design and build processes become more challenging and complex. Variety, where propulsion systems are concerned especially, will only add to this burden and my prediction, therefore, is that propulsion preference will become a clear point of distinction between various shipyards.
There are a number of crucial sectors in the superyacht market that without which the industry would simply no longer function. None, however, can claim the primacy of the new build sector. Without new superyachts being delivered and ordered the market would become stagnant and flat. Within The Superyacht New Build Report, we explore in granular detail this most foundational of sectors by breaking down the market into nuanced subsectors and vitally, where possible, forecasting where the market is headed.
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