Boating/Pleasure Boating/Yachting Industry & its Evolution in India Italian Trade Commission, Mumbai

Boating/Pleasure Boating/Yachting
Industry & its Evolution in India
Italian Trade Commission, Mumbai
INDIA OVERVIEW
•
•
•
Total Area : 3.28 million sq km
Land Boundaries : 14,103 km
29 States & 6 Union Territories
•
Long coastline of 7,517 kilometers
(4,671 miles)
– Indian Ocean on the south
– Arabian Sea on the west
– Bay of Bengal on the east
•
The mainland coast consists of
– 43% sandy beaches
– 11% rocky coast including cliffs
– 46% mudflats or marshy coast
GEOGRAPHY AND COAST LINE
Geography








India is second most populous country in the world with a population of 1.17 billion
Population growth rate is 1.548%
Young country - 35% population under 15 yrs; 75% under 40 years
Gender ratio- 933 females to 1000 males
Literacy rate is 64.8% (53.7% for females and 75.3% for males).
About one-fourth of the population (0.28 billion) lives in urban areas.
National Language : Hindi, spoken by 33% population; 14 officially recognized languages
English: widely used in business and everyday life
Age Group
Population (est. for 2010)
% share
0-4
126,352,821
10.74%
5-9
146,795,878
12.47%
10-14
142,826,236
12.14%
15-19
114,648,126
9.74%
20-24
102,691,195
8.73%
25-29
95,436,173
8.11%
30-39
165,707,919
14.08%
40-49
118,001,662
10.03%
50-59
73,492,332
6.25%
60+
90,789,656
7.72%
Total
1,176,742,000
Source: Census of India
POPULATION AND DEMOGRAPHICS
Population and Demographics
In millions
2005
2015
2025
320
280.5
280
244.4
240
206.9
200
160
120
94.9
80
40
0
91.3
106
93.1
55.5
Globals
Annual household
income of Rs 1
million and above
(> US$ 22,000 in
nominal terms,
and $ 115,000 in
PPP terms)
2.4 5.5
Strivers
Annual income
ranging from Rs
0.5 to Rs. 1
million (US$
11,000 to 22,000
in nominal terms,
and $ 58,000115,000 in PPP
terms)
74.1
49.9
33.1
1.2 3.3 9.5
101.1
10.9
Seekers
Annual income of
Rs 0.2 -0.5
million (US$
4,500-11,000 in
nominal terms,
and $ 23,00058,000 in PPP
terms)
Source: NCAER - India’s premier economics research agency
Aspirers
Deprived
Families living in poverty
conditions, with very low
disposable income
Total
INCOME GROUPINGS
Income wise distribution of households
300000
250,909
250000
200000
152,515
150000
100000
115,439
109,061
71,717
50000
0
Hyderabad
Delhi
Bangalore
Mumbai
Pune
High Net worth Individuals (HNIs)
→
India has over 120,000 HNIs
→
The average net worth of the Indian HNIs has gone up
to $3.6 million, compared to the global average of $4
•
Per capita income in 2008-09 - Rs 31,278.
•
Wealthiest cities: Mumbai, Delhi, Kolkata
Chennai and Hyderabad / Bangalore
•
150,000 households with annual income >
Rs. 5 mn (75,000 euros)
•
25% of population is below poverty line
million.
→
India recorded the fastest growth in the HNI population
worldwide in 2007-08, growing by more than 23%.
→
India also has over 1,080 Ultra-High Net worth
Individuals (individuals with an investible surplus
exceeding US$30 million), whose combined wealth was
estimated to be $ 116 billion at the end of 2007
Source: Skyline India, World Wealth Report, prepared by Merrill Lynch and Cap Gemini
INCOME GROUPINGS
No. of households with income > Rs. 1 million (in major cities)
Services
56%
Industry
27%
GDP growth average 8.8%
from 2003-04 to 2007-08
(over 6% in 2008-09)
•
Increasing importance of
trade and external capital
inflows.
The
share
of
merchandise trade increased
to over 35% of GDP in 200708 from 23.7% in 2003-04.
•
The 11th five year plan
(2007-12)
targets
8-10%
growth per year for Indian
economy.
Economy Profile (2008-09)
GDP at Factor Cost
(current prices)
Forex Reserves
Exports
Imports
FDI inflows
US$1.072 trillion
US$ 252 billion
US$ 185.3 billion
US$ 303.7 billion
US$ 35.18 billion
INDIAN ECONOMY
% contribution by sector
Agricultu
re
17%
•
PLEASURE BOATING & YACHTING INDUSTRY
A yacht is a recreational boat that covers two different classes of watercraft:
→Sailing Yachts:
• Sailing Yachts range in overall length from about 20 ft (6 m) to well over 100 ft (30 m).
• The motive force being the wind which makes sailing more economical and environmentally
friendly
→Power Yachts:
• Motor yachts typically have one or two internal combustion engines that burn diesel fuel
making it more expensive to operate than sailing yachts.
In western markets, yachts are classified
according to 5 major categories:
Particulars
Length
Top speed
Sports & Utility
Boats
Small Yachts
Up to 40 ft
40 knots
40-80 ft
25-30 knots
Super Yachts
100-200ft
15-40 knots
Mega Yachts
200-300ft
20 knots
Giga Yachts
>300 ft
Due to the unorganized nature of the
Indian yacht industry, the
classifications are different:- Small
Boats, Dhow class, Sail boats,
Large Motor Boats, Speed motor
Boats, Sailing yachts
PLEASURE BOATING & YACHTING INDUSTRY
Yachts Nomenclature
1830s
Yachting was introduced in the 1830s by the erstwhile Maharajas, Nawabs and Governors. The first recorded
race sailed on 06 Feb 1830 in Bombay (now Mumbai).
1950
Till 1950s, the five active sailing clubs were based at Bombay, Madras, Bangalore, Barrack pore and Nainital
1960
The Yachting Association of India (YAI) was constituted in 1960 for promoting the sport. It is affiliated to the
International Sailing Federation (ISAF). There are currently 40 clubs affiliated to the YAI, spread over the
various parts of India
1990s
Prior to 1990, imports of personal boats was banned in India. After 1990s imports were allowed, but was too
tedious. Government allowed manufacturers to import wood which promoted boat building in India in a big
way.
2000s
India included in premiere international yachting
events - Volvo Ocean Race 2008-09, Vasco da Gama
International Ocean Race 2010
India’s first marina inaugurated in Kochi
PLEASURE BOATING & YACHTING INDUSTRY
Origin & Evolution in India
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As of 2008, 300 boats were registered in India:

120 luxury yachts & 150 speed boats

Almost 200 boats and about 50 yachts in Mumbai and Goa

Foreign brands had a dominant share
Now, approximately 120 boats are sold every year, of which more than 80% are
speed boats

Popular sizes range from 15ft to 35 ft in overall length.

Wide price range - from Rs 3 million for speed boats to over Rs 1 billion for super
luxury yachts
Current revenue estimated to range from Rs 1.5 billion to Rs 5 billion
per year, depending on which types of luxury yachts get sold in the year
For instance, in 2007-08, a single Ferretti accounted for almost 50% of the
value of boats sold in India
The industry is growing at more than 100% p.a. in value terms
- Share of luxury yachts expected to increase over the years
PLEASURE BOATING & YACHTING INDUSTRY
Market size
IMPORTS
Imports of Yachts and Other Vessels for
Pleasure/Sports
(Value in US$ million)
2006-07
2007-08
2008-09
US$ 20.96
million
US$ 2.66
million
In 2007-08, Italy was by far the leading
source of imports (with 24.4% share),
followed by USA, UAE and other European
countries.
Italy
0.06
5.07
11.18
UAE
0.23
1.16
0.49
USA
1.01
2.54
2.38
France
0.22
0.85
1.62
UK
0.14
0.78
0.25
Germany
0.01
0.57
-
Others
0.99
9.99
1.82
Total
2.66
20.96
17.72
Above data also supports the industry feedback that the demand for
yachts in India has increased exponentially in the last two years
Source: Ministry of Commerce and Industry
→ Location is a key element and constraint in the development of yachting as a
national phenomenon in India
→ At present, Mumbai, Goa and Kochi are the only yachting destinations in India
Kochi
Mumbai
• Biggest location for yachting in
India.
• Has a strong boating heritage with
three sailing clubs
• Natural harbor with miles of
sheltered coastline
• The maritime gateway for peninsular
India and one of the best ports in
• Strategically located on the busy
international sea route
• Geographical proximity to another
yachting hub, Dubai
• Prior to the boat show in
February/March 2007, there were
around 20-30 pleasure boats but
since then the number has increased
to more than 100.
11 nautical miles from the GulfSingapore-Far East route
•
• Goa is known as a “Tourist
Paradise",
• A firm favorite with travelers
Asia.
•
Goa
70 nautical miles off SuezSingapore-Far East
• During 2009-10, more than 50 luxury
ships touched Kochi
around the world - 12% of all
foreign tourist arrivals in India.
• Close to Mumbai
PLEASURE BOATING & YACHTING INDUSTRY
Major destinations
YACHTING DESTINATIONS IN INDIA
Absence of marinas is the biggest challenge and constraint before the Indian yacht
industry.
Uneven sea and high concentration of pollutants, particularly sulphur, has made potential coastal
suburbs devoid of any docking facilities for large ships or even water sports.
High political sensitivity, greater priority always given to fishermen for allocation of harbor space.
→The best waters around Mumbai city have already been taken over by local fishermen and would
require huge compensations to be taken over for marinas
No national or state level policy for marinas, anywhere in India, presents major risks for
entrepreneurs who wish to develop marinas in India.
People didn’t buy yachts
because they never had a
proper docking place for their
yacht
Vicious
circle
While no developer wanted to
develop marina as they never
saw enough demand from
boat owners.
PLEASURE BOATING & YACHTING INDUSTRY
Marinas
FACTORS FOR GROWTH
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India's first ‘world class’ Marina commissioned at Kochi in April 2010
Located between Kochi Marine Drive and Bolgatty Island
Built at a cost of Rs 82 million, designed and developed by Ocean Blue Marinas
Capacity: Currently, it has docking, storage, maintenance and other facilities for berthing
34 yachts. In the second phase, to be expanded to accommodate 50 yachts
Other facilities: Marina house (with 24 rooms, including 4 suites), a health club, caféteria
and recreation facilities, and a golf course
Some serious recent attempts have been made to set up marinas in India
 Maharashtra Maritime Board has come up with a draft legislation on regulatory framework
required to set up a marinas in the state of Maharashtra.
 The naval base off the Mumbai harbour may soon have a marina. The total cost of the project is
estimated to be Rs 18 billion.
 Ocean Blue Marinas, which had set up a modern marina for the Mumbai boat show, has 15
projects in Goa, Kochi, and Chennai and along the coasts of Maharashtra and Gujarat.
 A business tycoon from Goa is planning to build a 300-boat marina in Sancoale village, in
Mormugao Taluka, at the mouth of the Zuari River in Goa with an investment of Rs 1 billion.
MARINAS AND OTHER INFRASTRUCTURE
The Kochi International Marina
•
•
Tourism being aggressively promoted by Govt.
Foreign Tourist Arrivals (FTAs) increased from 2.38 million in 2002 to 5.11 million 2009
Foreign Exchange Earnings (FEEs) from tourism increased from Rs. 150 billion in 2002 to Rs.
549 billion in 2009
Niche tourism like heliport tourism, medical tourism, wellness tourism, adventure tourism,
cruise tourism and caravan tourism have been on the rise
Decline in FTAs in 2009 by 3.3% over previous year (world average decline 4.6%)
Year
2000
Foreign Tourist % Change Over Foreign
Arrivals (in
Previous Year Exchange
million nos.)
Earnings (Rs.
In Billion)
2.65
6.7
156.26
Percentage
Change Over
Previous Year
20.6
Foreign
Exchange
Earnings (in
Million US$)
3,460
Percentage
Change Over
Previous Year
15
2001
2.54
-4.2
150.83
-3.5
3,198
(-)7.6
2002
2.38
-6
150.64
-0.1
3,103
(-)3.0
2003
2.73
14.3
207.29
37.6
4,463
43.8
2004
3.46
26.8
279.44
34.8
6,170
38.2
2005
3.92
13.3
331.23
18.5
7,493
21.4
2006
4.45
13.5
390.25
17.8
8,634
15.2
2007
5.08
14.3
443.6
13.7
10,729
24.3
2008
5.28
4
507.3
14.4
11,747
9.5
2009
5.11
-3.3
549.6
8.3
11,394
(-)3.0
TOURISM PROMOTION
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•
•
•
•
•
•
•
The Cruise Shipping Policy (Ministry of
Shipping) was approved on 26th June,
2008, aimed at
– making India a cruise tourism
destination with state-of-the-art
infrastructure and other facilities
– to attract the right segment of the
foreign tourists
– to popularize cruise shipping with
Indian tourists;
Tax exemptions for the cruise operators
The Ministry sanctioned Rs.145 million in
2008-09 to Cochin Port Trust for Cruise
Tourism infrastructure development at
Cochin Port
increase in Cruise Arrivals
Mumbai Port handled 66,681 domestic
and 24,400 international tourists for
cruise shipping in 2008
Over 48% increase in international cruise
vessels at Indian ports, and a hike of 28
per cent in cruise liners which operate
only within Indian ports, catering mostly
to domestic tourists
Year
No. of cruise tourists
2003-04
2004-05
2005-06
2006-07
2009-10
(target)
28,000
27,760
1,52,827
2,40,307
600,000
Cruise arrivals in India
140
Mangalore
Mormugao
Mumbai
Kochi
120
100
38
43
31
26
32
31
18
17
2006
2007
80
60
40
19
22
20
16
11
8
18
10
3
2005
0
2004
CRUISE TOURISM
•
2006
250000
2008
224,000
→ Number of salaried taxpayers earning
200000
more than Rs 10 million has grown at a
150000
100000
CAGR of 65% over the past two years
87,000
touching 5,000 in fiscal 2008.
50000
4,400 10,500
2200 5000
Rs 5 to 10 million
Rs. 10 million
0
> Rs 1 million
Income per annum
→ High rate of growth of High Net Worth
individuals
RISING INCOME LEVELS
Rising Income Levels
 The popular Volvo Ocean Race stopped by at Kochi for a fortnight, Dec 1-14, 2008
 Vasco da Gama Rally 2009-10: The last leg from Mumbai to Goa was flagged off on 26th of April
2010. The rally starting from Alanya Marina in Turkey in October 2009, has yachts varying in size
from 9 m to 17 m from Holland France, USA, Italy, UK, Germany, Belgium, Switzerland, Italy and
France
 People have spent close to Rs 4 billion on pleasure boats since Mumbai hosted India’s first
international boat exhibition – signifying the influence these shows have had in India
 The makeshift marina near the Gateway of India which had 20-30 boats earlier now has 100
boats.
 Events such as the Volvo Ocean Race 2009, the boat India 2008 have done a great deal in
enhancing India’s position as a major shipping destination
HIGH VISIBILITY THROUGH MAJOR EVENTS
 The Boat India Show 2008 was held at Kochi
OWNERSHIP PROFILE
Individuals
→ 50% of the owners are in the age
group of 40-60 years while another
33% are 60 years +
→ With fractional ownership concept
gaining ground, bulk of the owners
are CEOs/Partners/Owners of
companies
→ Speed boats with overall length less than
31 ft are most preferred
→ 95% of boats are purchased as luxury
boats; only 5% are ‘utility boats’ – mostly
in and around Mumbai
→ 25% boats owned by corporates (UB
group, Indiabulls Financial Services, Ispat
Inc (L N Mittal), Essar Steel, RelianceADAG…)
Source: Royal Bombay Yacht Club, Interviews
OWNERSHIP PATTERN
→ Majority of the boats (75%) are owned by
Vijay Mallya Chairman, UB Group
Owns India’s first indigenously designed yacht—MY
Ashena, a tri-deck luxury yacht. It’s one of the few in
the world that is entirely made of wood.
Gautam Singhania CMD, Raymond
Purchased a 34 meter super luxury yacht from Italy,
costing approx. Rs. 4 billion. The yacht has about
5500 sq.m. area across upper and lower decks.
Anil Ambani, Chairman of Reliance- ADAG
This famous celebrity recently bought a private
yacht worth Rs 2.5-3 crore.
Salman Khan, popular Bollywood star
Sold a 50 footer Sunseeker, which he picked up in
London in 2008. He also bought another 84 footer
(The Sunseeker 80)
Riyhad Kundanmal Director, Ocean Crest Marine
Yachts one can order in India
UTILITY BOATS
INDICATIVE
PRICES*
Lancer 21
Rs. 1.7 million
Monterey 18
Rs. 2.0 million
Silver Craft 31 SF (Dolphin Rs. 4.5 million
31)
Sea Ray 350 Sundancer
Rs. 10.5 million
Regal Sports Boat 3050
Rs. 8.2 million
Larson Cabrio 310
Rs. 8.4 million
Touring 36
Rs. 6.1 million
YACHTS
Majesty 44
Rs. 30 million
Azimut 43
Rs. 45 million
Princess 42
Rs. 38 million
Sunseeker 45
Rs. 45 million
Ferretti 460
Rs. 48 million
Majesty 66
Rs. 100 million
Azimut 68 E
Rs. 190 million
Princess 67
Rs. 180 million
Sunseeker Manhattan 66
Rs. 185 million
Ferretti 681
Rs. 210 million
MEGA YACHTS
Majesty 101
Rs. 240 million
Azimut 103 S
Rs. 480 million
Ferretti 110 CL
Rs. 600 million
SUPER YACHTS
Custom Line 112
Rs 940 million
Pershing 115
Rs. 1.28 billion
Alibi
Rs. 4 billion
*Prices are inclusive of import duties
Source: Industry
THE INDIAN ‘YACHT CLUB’ (WHO’S WHO)
Owns the 95 m long (311 ft) Indian Empress costing
approximately Rs 4.43 billion. Indian Empress is largely
used for his private parties.
→ Mumbai accounts for 60% of the
pleasure boats in India. The Gateway
of India in Mumbai, caters to almost
200 boats of various sizes and
shapes.
→ Besides Mumbai, Goa and Kochi, the
number of yachts owners in noncoastal cities like New Delhi and
Hyderabad is increasing
Usage Pattern
→ Luxury boats are valued and fully utilized by their
owners.
→ Boat owners who don’t use the vessels often,
offer their boats on charter in order to cover
maintenance costs.
Source: Field Survey interview
provision as their top selection priority.
→ Pleasure boats particularly super luxury
products have a high maintenance cost,
generally ranging from 5 to 15% of the
price tag.
Source: Field Survey interview
MARKET SEGMENTATION: DEMAND SIDE
→ 30% of the owners rate maintenance
→ Time sharing is a membership based system in which members are allocated specific
number of usage hours during the assigned period.
→ These memberships are not transferrable and non extendable and have no right on
the yacht
Club Privada, with 48 members, is India’s first luxury boat club to launch the time
sharing concept. The Club offers time share options with a choice of yachts, including
super luxury $2 million Azimut 50 and Larson Cabrio 350.
The Azimut 50 costs
Rs. 3.1 million for 30
days over three
years
Cabrio 350 costs
Rs. 1.6 million for
13 days every year
for three years
The club recently initiated a Points
System wherein 500 points are given to
the members for Rs 0.5 million lump sum
payment, which in turn can be redeemed
on an hourly basis as per requirement.
Source: Field Survey interview, Yachting Association of India Joint Secretary General, Commodore Ajay Narang
FORMS OF OWNERSHIP
Time Sharing
The yacht is shared typically 5-6 persons, one ‘owner’ member and other ‘sharer’
members
Aquasail is a company that promotes fractional ownership. The contract
between Aquasail & an Owner is typically for a 5 year period. Aquasail manages all
the maintenance and running costs for the boat through the period of the contract
while customer also receives annual payments.
Many dealers have started approaching clients with this proposition.
Benefits of fractional ownership:
Problems faced under fractional ownership:
→ The member gets to use high quality boat without
paying full purchase & maintenance costs.
→ Diverging budgetary preferences
→ Free riding among the members
→ No hassles of maintenance, servicing since all are
taken care of by the maintenance company.
→ Members also have the right to sell their share at
any point of time.
→ Simplistic and inflexible scheduling agreements
→ Differences in willingness to do maintenance
→ Poor asset care and use
→ Together owners can rent the yacht during extra
days too and share profit.
→ Lack of communication between owners
FORMS OF OWNERSHIP
Fractional Ownership
→ While investing in a yacht, one important factor to bear in mind is its potential for charters
→ By chartering a yacht for about 10 weeks a year, the owners can pay operating expenses for a
full year
→ Club Privada has entered into charter market, by renting yacht facilities for Rs.150,00 Rs.30,000 per hour for 8-12 people occupancy.
→ Vijay Mallaya, of UB group, charters his mega yacht, which costs about $700,000 a week.
→ License to charter can only be obtained at the time of purchase of the yacht when it is registered
with the concern authorities in India
Financing & Insurance
→ Indian financial institutions have not yet adopted marine financing options.
→ The only bank active in this field is Yes Bank, where in a dedicated team is handling this.
→ Usually all insurance companies provide marine insurance
→ Hull insurance policy in India is not too much conclusive, it has been taken from Europe but
when compared to environmental variance and sea conditions in Europe and India, there is a
vast difference
FORMS OF OWNERSHIP
Charter Services
SUPPLY SIDE SCENARIO
→ Dealers are usually people well renowned in sailing circles and their
. own links and contacts play an important role in lead conversion
→ The scenario is no different in India where almost all foreign
manufactures have a presence through dealers, and operate on multi
brand models
→ The absence of multiple dealers of a particular brand and the fact that
the market is value driven enables the customer to enjoy a good
scope of bargaining
Recently, dealers have started giving discounts and reducing their margins to increase
sales. Starting from a target margin of about 30%, the dealers usually settle for a
margin as low as 8%, depending upon the client’s bargaining power and the dealer’s
urgency to make a sale
MARKET SEGMENTATION: SUPPLY SIDE
→ Most yacht manufacturing companies operate through a dealer model
→ Word of mouth publicity is the most effective
method of sales generation, accounting for 49%
of the sales.
→ Exhibitions and Boat Shows are a recent
development in India and are likely to emerge as
an important avenue for sales generation.
Key Attributes in a Dealer
→ 50% of the customers identify dealers according
to the brands that they deal in
→ Only 20% choose on the basis of the
maintenance and services offered.
Source: Field Survey interview
MARKET SEGMENTATION: SUPPLY SIDE
Key tactics – Sales generation
MARKET PRESENCE OF MAJOR MANUFACTURERS
Although the official import statistics indicate that Italian companies have about 25%
market share, the feedback received from industry players during primary research,
puts the share of Italian companies at a dominant 45% in value terms.
Source: Field Survey interview
Maxum
•
•
•
•
•
•
•
Operating since 1982 in UAE, the company holds a preeminent position in the global leisure marine market
offering a wide array of products.
Six sales were recorded through them during 2007-08.
Manufactures high speed boats and yachts, ranging from
30 – 140 feet, with an annual production of 600 boats.
Exports more than 70 % of its output and its super-luxury
vessels are to be found in virtually every major harbour of
the world.
Gulf craft has product range under 3 distinct brands - the
Majesty, SilverCraft and Oryx range of boats and megayachts.
West Coast Marine is their exclusive dealer
•
•
A Brunswick Corporation brand and a member of the
Brunswick Boat Group, Maxum is the acknowledged
leader in recreational boating for more than 15 years.
Maxum boats pass through the popular PRO® System
which ensures highest quality parts and manufacturing
processes at the best prices.
Maxum is known for manufacturing the following types
of yachts:
– Speed boats
– Sport Cruisers
– Sport Yachts
Sealine
Ferretti
•
•
•
•
Founded in 1972, Sealine is currently one of Europe's
largest luxury boat builders, producing over 300 boats
a year.
Its product range comprises Sports Cruisers (25’-47’)
and Fly bridges (34’-60’).
– T series
– F series
– S series (entry level S25 to the commanding
SC47)
With international sales and dealer network comprising
over 40 dealers, Sealine has representation across the
globe.
•
•
•
With a current production run of around 60 units, this
Italian group is focusing on top-end yacht including Fly
bridge.
460 (46’) and 550 were the first two motor yachts
delivered by Ferretti and were the first luxury motor
yachts to arrive In India.
Recently set up shop in India through Marine
Solutions, India’s premier yacht retail company.
Group consists of about 10 design and production
companies including Pershing S.p.A, Itama Cantieri
Navali S.p.A, Riva S.p.A. among others.
PROFILING OF MAJOR MANUFACTURERS
Gulf Craft Inc.
•
•
•
•
•
Azimut which is positioned as the epitome of luxury ,
has a range of around 300 nautical miles
Amerglass, a modern Dutch shipyard producing boats
in fiberglass are their dealers. Products consisted of
sailing boats, motor cruisers and finally motor yachts
from different makers: British Powles, Westerly
The product of a joint-venture with Amerglass, the first
fiberglass motor cruiser developed, the AZ 43 BALI,
was an instant success.
Models available are: Fly- 39E, 42E, 43, 46E, 47, 50,
55E, 62E, 68E, 75, 80, 85, 98, 105,116; Open- 103S
Sorenstam Ventures and New Wave are two among
few dealers of the yacht manufacturer.
Nautilus Yachts
••
Kochi
company
manufacturing
Kochi based
basedyacht
yachtmanufacturing
manufacturing
company
high-powered air-conditioned single cabin boats of 16 feet
•
It
manufactures high-powered air-conditioned single
costing Rs.1-2 million as well as ones costing more than
cabin
boats of
16 more
feet costing
Rs.1-2
millionfish-finders.
as well as
Rs.20 million
with
cabins and
electronic
ones costing more than Rs.20 million with more cabins
and electronic fish-finders.
Grady White Boats
•
•
Princess Yachts
Aicon
•
•
•
•
British motor yacht maker based in the city of
Plymouth, Devon, England.
Founded in Plymouth in 1965 as Marine Projects
(Plymouth) Ltd, it was bought in 1981 by South African
businessman Graham J. Beck, who sold the business to
French businessman Bernard Arnualt's investment
group, L Capital, a division of LVMH for £200million in
June 2008.
Their current model program includes a series of
flybridge yachts ranging from the Princess 42 at 44
feet, 3 inches (13,5 metres) to the Princess 95 at 95
feet 3 inches (29,3 metres), and a series of sporting
yachts, designated as V-Boats and ranging from 42 to
85 feet.
•
•
•
One of the most successful boatbuilding companies in
the world since 1959, Grady-White Boats has a
legendary reputation for designing and producing
outstanding fiberglass boats.
Dealer: New Wave takes care of its sales in India.
The Aicon Group is one of the most dynamic operators
in the design, construction and commercialization of
Fly bridge and Open yachts, both in Italy and abroad.
Launched only on 1999, Aicon has established itself as
one of the major Italian operators in this sector with a
strong presence in Europe, and, more recently the
United States and China.
Dealer network covers the USA, the EMEA countries
(Europe, the Middle East and Africa), Russia and Asia
Available in India in open boats and flybridge version.
PROFILING OF MAJOR MANUFACTURERS
Azimut
New Wave
•
•
•
•
Leading manufacturer of recreational boats established
in 1957.
company operates as a subsidiary of Brunswick
Corporation, which acquired Bayliner's former parent
company US Marine in 1986.
Bayliner facilities are located in Pipestone, Minnesota,
Roseburg, Oregon, and Cumberland, Maryland, in the
United States; and in Reynosa, Tamaulipas, in Mexico.
•
•
•
Sunseeker International
•
•
UK luxury motor yacht manufacturer. .
Their headquarters and assembly factory is in Poole
Harbour, at Poole in Dorset, England. The company has
been making motor boats since 1979.
•
Deals with yachting, power boats or water sports from
various brands like Azimut, Cobalt boats, Larson,
Grady white.
Assist customers with certification by authorities,
insurance, transportation to India, customs,
commissioning and other regulatory issues.
tied up with Ocean Blue Boating Services Pvt. Ltd.
(OBBSPL) for servicing and maintenance
OBBSPL currently is based out of Dharamtar, Alibaug,
with a 10,000 sq/ft waterfront, all weather workshop
and storage facility with capabilities to perform the
basic services to a full yacht refurbishment.
OBBSPL offers a 24-hour call service for Break Down
and towing Service around the Mumbai area.
M&M Yachts:
Aquasail
•
•
Exclusive dealers to Riva yachts, often known as ‘pride
of Ferretti group.
Sea Ray
•
•
•
A brand of pleasure boats owned by the Brunswick
Corporation.
It was founded as an independent company, Ray
Industries, in 1959 in Detroit, Michigan by C.N. Ray.
That company was bought by Brunswick for $350
million in 1986.
At the time, the purchase made Brunswick the largest
pleasure boat producer in the world.
•
•
•
Founded in 2004 by Shakeel Kudrolli, India’s premier
yachtsman.
Aquasail has established itself in the market by forging
several tie ups with some of the world’s best brands,
bringing a range of dinghies, power and sail boats to
India.
The brands that Aquasail represent are the World’s
leaders in their categories like Laser Performance,
Hobie Catamarans and Kayaks, NeilPryde Windsurfing
and Cabrinha Kiteboarding. T
he highly desirable Beneteau with its sleek French
design and luxurious interiors is the ultimate style
statement in sailing yachts & powerboats.
PROFILING OF MAJOR MANUFACTURERS
Bayliner
West Coast Marine
•
•
•
•
•
Established in 2001, Marine Solutions is India's first
professionally managed company dedicated to the
leisure boating industry.
Represents premier international brands in every
category of the boating business in India. Some models
include Ferretti Yachts, Custom Line and Mochi Craft
among others
Marine Solutions has sales and service offices in
Mumbai, Goa and Kolkata; engine workshop in Cotton
Green, Bombay; and boat yard in Mora, 15 minutes by
speed boat from Mumbai.
Offers clients exclusive service at the Panjim Yacht
Station in Goa and at moorings off the Gateway of
India in Mumbai.
The company started in 1994, it has 156 employees,
enjoys 75% market share in servicing the yachts and
30% in sales.
The company focuses more on service as they are
managing 110 yachts as of now in Mumbai.
Company operates on backward integration model i.e.
they create their brand name through after sales
service they provide to their customers.
They also provide yacht financing in association with
Yes Bank. Majesty Yachts, North Star, Hanse, Silver
Craft are few brands which the dealer caters to.
•
•
•
Aquamarine Services
Infinity Yachts
•
•
•
•
•
The company is exclusive distributors of U.K based
Princess Yachts in India.
Provides a seamless ownership experience for
customers including boat selection with tailor made
specifications, registrations, crew, management and
maintenance.
Offersluxury charter services on Princess Flybridge
yachts and fractional ownership programs on a range
of Princess Yachts.
Infinity Yachts is a division of Infinity Group.
The Group, through its division Infinity cars has a
proven expertise in dealership and services for high
end, lifestyle vehicle brands.
Infinity Yachts represents Maxum (entry level sports
cruiser) and Sealine (sports cruiser & flybridge) which
belong to Brunswick and Aicon (luxury motor yacht)
from Italy. These brands are among the global leaders
in their size segment.
•
Larson Boats
Ocean Crest Marine
•
•
•
•
Larson Boats founded in 1913 deals in the manufacture
of the most affordable and dependable boats.
Larson offers 24 models ranging from 18' to 37'.
Sorenstam (Dadar, Mumbai) is the dealer taking care of
its sales in India.
•
Ocean Crest Marine currently has outlets in Dharamtar
creek and Revas port in Mandwa.
A showroom in South Mumbai is also in the offering.
LEADING YACHT DEALERS
Marine Solutions
REGULATORY FRAMEWORK
→ Indian Pleasure boat industry is covered by Inland Vessels Act
→ As there are no specific rules and regulations designated for pleasure boats in
India, the owners face regulations applicable to carriers or cargo vessels.
→ The Cruise Shipping Policy (Ministry of Shipping) was approved on 26th June,
2008, aimed at
• making India a cruise tourism destination with state-of-the-art infrastructure and
other facilities
• to attract the right segment of the foreign tourists
• to popularize cruise shipping with Indian tourists;
Registration
→ Registration is one of the most important aspects of yacht ownership,
mandatory for motor boats
→ Any vessel which has provision for sailing does not require registration by
law, however registration is practiced in all cases for easy navigation.
→ Vessels under 15 tonnes have been exempted and thus do not require
registration with any authority.
→ Commercial liners are registered with the Director General of Shipping and
smaller coastal or inland water vessels are registered with the respective
State Maritime Boards
According to Daily News Analysis the total no of boats registered till 2007 was 269 an increase
of 73 over previous year’s 196. However primary sources estimate that approximately 120
boats are sold every year, which shows that not all are registered.
REGULATORY FRAMEWORK
Government policy
→ Maharashtra Maritime Board is the nodal agency that takes care of the
regulatory and developmental framework of the state's maritime activities.
→ The board has taken a number of initiatives - development of the marine front
including setting up of several cargo jetties, ferry wharfs, larger port terminals,
inland water transport system, shipyards etc
→ MMB ports which are supported by 400 employees across five regional
offices. presently handle 10 percent of the total cargo handled by minor ports in
the country.
→ As boats are not compulsorily registered with any authority, there is no
checking of the log books, verification of the men working on it.
REGULATORY FRAMEWORK
Maharashtra Maritime Board
→ Imports of Yachts and other vessels for pleasure or sports attract
Custom Duty at a rate of 34.13%.
→ However, when the owner shows it as a tool to business, the custom
duty is zero.
Taxes
→ Mumbai, which has the highest concentration of yachts in India, levies
5.5% Octroi on yachts and pleasure boats.
→ There is no Octroi in Goa.
REGULATORY FRAMEWORK
Import Duty
→ Formally constituted on 15 May 1960
→ Recognized as the governing authority for sailing, windsurfing, motor boating,
powerboat racing and personal watercraft, at sea and on inland waters in India
→ Affiliated to the International Sailing Federation (ISAF), which is recognised by the
International Olympic Committee (IOC) as the governing authority for sailing
worldwide
→ Currently 14 class associations affiliated to the YAI
→ Currently 40 clubs affiliated to the YAI, spread over the various parts of the
country.
Indian Olympic Association
→ IOA the apex Sports Organization of Olympic Sport in the country
→ Each Olympic and Non-Olympic Sport has a Federation at the National level
and is affiliated/recognized to/ by IOA.
INDUSTRY BODIES
The Yachting Association of India (YAI)
→ Founded in 1846, holds its importance in terms of the registrations and services
offered.
→ The total no. of boats registered with them was 185 of which speed boats were the
dominant category
Till April 06
April 06-Dec 08
80
70
60
34
50
40
30
20
10
15
38
17
0
Sailing Yachts
Speed Motor
Boats>31 ft
29
9
10
12
Speed Motor
Boats<31 ft
Large motor
Boats
20
3
Dhow Class Sail
Small boats
→ The RBYC has what's called a Seabird Class of Boats and their sister club,
the Colaba Sailing Club has a Lightning Class of boats..
Source: Royal Bombay Yacht Club
REGULATORY FRAMEWORK: INDUSTRY BODIES
The Royal Bombay Yacht Club (RBYC)
DEMAND POTENTIAL
→ The potential demand for yachts and pleasure boats in India over the next 10
years is estimated by two methods:
→Growing universe of the individual buyers
→Yachts as a part of the expanding luxury market
Growing universe of Individual buyers
3 crucial components comprising the universe:
→HNIs
The HNI population as of December 2007 stands at 0.12 million, growing at a CAGR of 19% p.a
→CEOs/MDs
Universe is limited only to the CEOs and MDs of top 100 BSE listed companies earning over Rs
10 million a year. This segment has been growing at 22%p.a. since last three years (2006-08).
→BOLLYWOOD CELEBRITIES & SPORTSPERSONS
This section of the universe is pegged to grow at a CAGR of 20% p.a.
DEMAND POTENTIAL
Demand according to the present scenario
0.1% of the universe buys boat every year.
HNI
(growing at a
CAGR of 19%)
CEOs/MDs
growing at a
CAGR of 22%)
Bollywood
celebrities &
sportspersons
(growing at a
CAGR of 20%)
Total size of the
universe
(No.)
2008
120,000
77
288
120,365
2009
142,800
94
346
143,240
143
2010
175,644
115
415
176,174
176
2011
216,042
141
498
216,680
217
2012
265,732
171
597
266,500
267
2013
326,850
209
717
327,776
328
2014
402,026
255
860
403,141
403
2015
494,492
311
1,032
495,835
496
2016
608,225
380
1,238
609,843
610
2017
748,116
463
1,486
750,066
750
2018
920,183
565
1,783
922,532
923
Total market potential over 10 years
Market size in
No. of Boats
each year (0.1%
of universe
buys boat every
year)
4,312
The yacht industry would be able to sell approximately 4300 boats over a decade
(2008-2018).
UNIVERSE OF THE INDIVIDUAL
Year
DEMAND POTENTIAL: GROWING
→ According to industry sources, approximately 120 boats are sold every year, indicating that only
BUYERS
→The total size of the universe as of 2008 was 0.120 million.
→ Luxury goods market in India was pegged at USD 4.35 billion in 2006 which is expected to triple
to 14.35 billion in 2010.
→ According to Daily News Analysis the total no of boats registered till 2006 was 196.
→
As per primary research 95% of the boats are sold for luxury purposes, which mean that 186
boats cater to the luxury market.
→ Given the value of the luxury goods market in 2006 and assuming the average price of boat to
be Rs 5 million, the share of the yacht industry in luxury goods market is estimated to be
0.54%.
2006
No. of boats in the market
until 2006
Yacht industry
186
Luxury goods market
(Source: The Economic
Times ATKearney India
Luxury Review 2007)
Share of the yacht industry in luxury goods market (%)
Value in Rs million (taking
average price to be Rs 5
million)
931
Value in USD million
(taking average exchange
rate as 40 Rs per US$)
23.275
4,350
0.54
DEMAND POTENTIAL: YACHTS AS A PART OF THE
EXPANDING LUXURY MARKET
Yachts as a part of the expanding luxury market
Using the share of the yacht industry in luxury market as obtained from 2006
data
The estimated size of the luxury yacht market in 2010 would be US$ 71.75
million, which translates into a total of 574 boats in 2010
Assuming a similar trend to continue
for the following eight years, the
total no. boats in the market is
projected to touch approximately
4,800
Year
Total no of boats in
the market
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
196
256
334
437
574
750
979
1,279
1,670
2,181
2,848
3,720
4,858
Considering both the methods, an average figure of 4500 boats seems
to be a realistic estimate for the year 2018.
DEMAND POTENTIAL: YACHTS AS A PART OF THE
EXPANDING LUXURY MARKET
The luxury goods market is pegged to reach US$ 14.35 billion in 2010
Assuming that the industry is no longer constrained by infrastructure and regulatory issues,
Given the assumptions and taking into account increasing awareness, a realistic estimate
of at least 0.3% of the universe buying a boat every year seems possible.
Year
HNI
CEOs
Bollywood celebrities
& sportspersons
Total
2006
79,318
52
200
79,570
2007
97,561
63
240
97,864
2008
120,000
77
288
120,365
2009
142,800
94
346
143,240
430
2010
175,644
115
415
176,174
529
2011
216,042
141
498
216,680
650
2012
265,732
171
597
266,500
800
2013
326,850
209
717
327,776
983
2014
402,026
255
860
403,141
1,209
2015
494,492
311
1,032
495,835
1,488
2016
608,225
380
1,238
609,843
1,830
Total number of boats (2009-2018)
No. of Boats
likely to be sold
each year
12,935
Accordingly, the Indian market offers a potential for sales of around 13,000
boats over the next ten years.
DEMAND POTENTIAL
Potential demand
CONCLUSIONS & RECOMMENDATIONS
→ Indian Pleasure boating and Yachting industry is still in a nascent stage of development, with
only about 300 boats registered
→ Currently reported to be growing at more than 100% per year, both in volume and value terms
→ The main factors driving the growth of the Indian market are rising income levels and the
increasing number of high/ultra-high net worth individuals in India; increasing popularity of cruise
tourism, and organization of boat shows, exhibitions and other promotional events.
→ Several new marinas are in planning/implementation state, which will a large extent address
the problem of inadequate infrastructure,
→ In terms of market presence of manufacturers, Italian companies have a 45% market share,
followed by UAE based companies (25%) and other European companies.
→ The growth of the market is constrained to an extent, due to lack of regulatory framework,
both at the central as well as state level.
→ Based on the present market scenario, with estimated sales of about 120 boats a year in the
recent years, the demand for additional boats over the next 10 years, i.e. 2009 to 2018 is
projected to be about 4500 numbers.
→ However, in a likely scenario of regulatory and infrastructure issues being adequately addressed,
the total potential demand could be 13,000 boats over the next 10 years.
CONCLUSIONS
Conclusions
→ Selection and appointment of dealers is the key to success
→ High visibility in the market, through active participation in boat shows, exhibitions
and trade promotion events is extremely important to create brand awareness.
→ While having a presence in key locations like Mumbai, Goa and Kochi is essential, it
is also important target non coastal cities as well
→ Offering a package of fractional ownership options or financing tie-up with a bank
can be a strong USP.
→ Provision of maintenance and boat management services
→ Developing the pre-owned yacht market could be a unique niche in the Indian
market. In world boating industry, about 42% of all new boats are sold by the first
owner within seven years.
RECOMMENDATIONS
Recommendations