As China’s Yacht Market Grows, Chinese-Built Yacht Companies Emerge
This week, Bloomberg reported on the burgeoning China yacht market, as China’s billionaires delve into the secondary luxury market and turn their eye towards “Made-in-China” yachts. As Jing Daily recently pointed out, impending luxury taxes for heavily polluting items like private jets and yachts, which will levy a premium of anywhere from 400-2,000 yuan (US$62-308) per meter, could potentially slow the development of China’s yacht industry. Upon the imposition of these taxes, the resulting price difference could see aspiring yacht owners turning towards Chinese-built yachts and international luxury brands eager to launch joint ventures.
Many international brands have entered the China market only within the last year, meaning Chinese brands are entering the luxury yacht market very early on. As Gordon Hui, managing director of Sunseeker Asia, told Bloomberg, the early entry of these brands, and their deeper understanding of the way Chinese buyers actually use their yachts, may prove to be key advantages. As Hui points out, whereas Western buyers tend to spend days on their yachts, Chinese use their boats “no more differently than they would a karaoke lounge in the city.” As boat owners are restricted to China’s coastal waters, since traveling between provinces requires special permits, Chinese yachting enthusiasts generally use their boats for a few hours on weekends to entertain friends and business acquaintances, installing karaoke machines and mahjong salons rather than large sun-decks.
Growing confidence in China’s industrial capabilities is seeing more Chinese yacht companies cropping up, such as the Xiamen Hangsheng Yacht Building Co. Ltd. in Fujian province; Hong Kong-based Kingship Marine Ltd.; Sunbird Yacht Co. Ltd.; and Xiamen Hudson Yacht & Marine, each of which is ambitiously pursuing the Chinese market as well as overseas markets. With yachting culture still in its infancy in China, some of these manufacturers have looked to recruit foreign expertise in building authority within their company. Recently, Hangsheng collaborated with the U.K.-based design expert Bill Dixon, Sunbird debuted boats designed by Seattle-based Brian Holland, and Qingdao Nauticstar Marine Co. Ltd went the M&A route, acquiring the Italian yachtmaker, Cantieri Navali de Lavagna late last year.
While most Chinese-made yachts are of comparatively moderate size, Kingship Marine Ltd. is currently building the largest Chinese-built boat, a 45-meter (144- foot) vessel with a price tag of almost 175 million yuan (US$27 million), two-thirds of what it would have cost if it were built outside of China, according to Bloomberg. Also with an eye to the global market, Sunbird Yacht Co. Ltd. is currently building two vessels that will eventually be shipped to Italy and unveiled at the Genoa boat show in October.
While there is still a “made-in-China” bias to overcome in the international market, Peter Johnstone, a Xiamen Hudson Yacht & Marine customer in Newport, Rhode Island, is confident in Chinese companies, saying that “the quality and detail is on par with any of the top yards in the world.” Until quality perceptions outside of China can match that of major manufacturers, Chinese yachtmakers look to have no qualms about trying to tap the domestic market.