Brian Peters, who runs one of the biggest British motor yacht distributors, says the main problem selling boats in the UK is the number of used ones put on the market by finance houses at half the new price or even lower. The boats, seized after owners have failed to keep up marine mortgage payments, drag the whole market down. It all provides a sombre backdrop to the London International Boat Show, which opens at Earls Court today.
But it is not quite as bad as it looks. Power boat builders have been insulated from the worst of the recession by strong exports. At home, equipment makers have found that owners who cannot afford a new boat spend lots of money pampering their old ones with add-on gadgetry and replacements. It is the sailing boat builders that have been by far the worst hit by the recession.
Mr Peters' firm in Chichester markets about 40 per cent of the output of Fairline, the quoted Oundle power boat builder that recently announced a pounds 500,000 loss. Though the home market has been devastated, 90 per cent of his sales go overseas, particularly to Continental Europe.
A year ago, BA Peters had a grand total of two orders. By yesterday it had 38. 'The interest after the pound's devaluation has been quite incredible,' Mr Peters said. There are worries about the effects of a German recession, but so far it has not killed off the revival in power boat sales, even to Germans (who usually base them in the Mediterranean).
Most of the other big names in power boating are also export-oriented. Robert Braithwaite, managing director and co-owner of Sunseeker, which exports 98 per cent of production, sold pounds 36m of boats last year and is still making a profit, albeit a reduced one. He has been jetting after orders as far afield as Malaysia and South America.
A better picture of the whole industry comes from Dave King, managing director of Plymouth-based Marine Projects, builder of the Princess power boats and the Sigma and Moody sailing yacht ranges. Marine Projects' sailing yacht production has collapsed from 400 to about 140 a year as the UK market has shrunk. But 80 per cent of power boats against 20 per cent of sailing boats are exported, and the end result was that the company's sales by value were roughly the same last year as in 1991, helped by increasing interest in more expensive boats. The company is displaying the biggest boat at the show, a 65ft power yacht costing more than pounds 500,000.
'The nadir of the market was in the second and third quarters of 1992. We have seen some recovery in sailing boat sales in the last three months and UK inquiries about power boats have increased 25 per cent,' Mr King said.
At the smaller end, Hunter Boats has survived much better than many of its rivals. 'We are not especially clever,' said Peter Poland, managing director. 'We just do a good job of work in a good factory with a good workforce and produce a good product.'
Times have been tougher at another famous name, Westerly, which has been through receivership and out again. Peter Thomas, the sales director, describes Black Wednesday as a godsend.
Two weeks later he was at the Hamburg Boat Show with products still at the 1992 price and in effect devalued by 20 per cent. He sold six of his bigger boats and now says there is increasing interest in Belgium and the Netherlands as well as Germany. At home, lower interest rates have helped, but more importantly customers see their jobs as less under threat than a year ago. But the home market has had a terrible time. Westerly's workforce has been cut from 400 to 100, the number of plants from 13 to three and capacity to 180 boats a year from 300. Output is running at about half capacity.
The boat equipment industry is bigger than boatbuilding and has had an equally hard time, with clothing and chandlery sales sharply down from their peaks in the late 1980s. Henri-Lloyd, which makes sailing clothes, says people are trading down in price, with a pounds 99 jacket now a psychological barrier. The firm has high hopes for a new survival suit and expects to benefit from the pound's devaluation in Europe.
Musto, one of the fashion leaders, sounds more cheerful after an 'exceptional year' in 1992 when it moved to new headquarters and recruited staff. Exports were up 28 per cent, with particularly high gains in the US and Scandinavia.
Elsewhere, an export niche is the key to success. Brookes & Gatehouse, which makes sophisticated boat electronics - heavily used by America's Cup and Whitbread round-the- world race contenders, as well as by spare-time sailors - exports 80 per cent of production and increased sales in 1992. Ian Godfrey, of rival Autohelm, claims the same export percentage and says firms are doing well in the recession because 'owners are giving their old boats a birthday because they aren't buying new ones'. Both firms have been snapped up by large US companies in the past two years.
In another development to parallel the housing market, prices have fallen. Boats are probably cheaper now than they will be for years to come, so the conditions for recovery are there if only people become confident enough to spend. The costs of keeping a boat in a marina are also falling sharply in real terms. Marina Developments, operator of a string of marinas, was vilified by the yachting press in the 1980s for the speed at which it raised prices during the boom years. This year it has frozen berthing rates for the second time while occupancy has continued to sag from 85 to 80 per cent.
There are people now willing to bet on recovery. John Dean, formerly in charge of MD's marina operations, has launched a new venture, Dean & Reddyhoff, which is about to start the first phase of a 600-berth marina at the entrance to Gosport. 'You could argue it's not the right time to start, but it's a long-term thing and within five years I am sure all the berths will be full,' Mr Dean said.
He is keeping a tight lid on costs and not relying on property, which has proved the Achilles' heel of many 1980s marina developers.
In this embattled atmosphere the industry is defensive about the outlook for 1993. In the words of Tony Beechey, head of the British Marine Industries Federation, it is all about 'not how badly we are doing but how well we are surviving'.
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