Are boats really more expensive these days?

[henryf]

20 or 30 years ago not many boats were sold so the use market was next to non existent. These days "modern" boats have been produced for over 20 years with most still around. For that reason prices have softened. These days boats are produced in volume, not necessarily by the UK 2.5 but in Europe. Those boats influence the used price of the UK boats. A used Prinseeker or a new boat from Europe?

Re: the Princess line up at Swanwick, I don't think they are suggesting Uk buyers want 56-98 footers, I suspect they are displaying what will be available at the time. I guess all the P39, 43, 48, 52 are sold and there aren't any stock boats around at that time. Not everyone wants people clambering over their new purchase. Whilst Swanwick is a superb show it doesn't have the clout of London or Southampton in terms of demanding a full model line up.

It may also be that Princess are using the event to sell to non UK buyers. You get excellent access without the crowds and sea trials are easily arranged should the need arise.

Henry

 

[gordmac]

Ok, cos I had nothing better to do and using some figures found in the internet that may or may not be accurate. In 1986 you would need 19.8 average sallies to buy the 1986 boat mentioned in the OP. In 2016 you would need 37.7 average salaries to buy the 2016 boat mentioned in the OP.

On the subject of Range Rovers, using the OPs figures you could have bought one with 1.5 average salaries in 1986 but would now take 4.2 average salaries in 2016.

So it looks like in real terms both princess boats and range rovers have become even more out of reach of the average person.

Not sure using average salaries to compare is reasonable, may be a better guide to use say top 5 or 10% salary.

 

[Tranona]

Not sure using average salaries to compare is reasonable, may be a better guide to use say top 5 or 10% salary.

That is an important point. What is relevant is the price of the product in relation to the income of the target market. As we have seen over the last 20 years the average size (and spec) of boats, particularly motor boats has risen as the wealth of the target market has grown faster than the average. That is more rich people are buying boats. It is the middle income bracket that used to buy boats that has suffered the hit in disposable income. Recent thread on builders neglecting the "ordinary" boater illustrates this perfectly.

The causes of this are not difficult to identify - high housing costs and low real growth in wages hit the salaried middle classes, particularly the younger ones.

In terms of prices, though, like for like (as near as is possible to make such comparisons), my new 33 sailboat I bought last year was roughly 20% cheaper than its equivalent in 2001 in real terms using the RPI index and less than 10% more than the 37' of the same make I actually bought new in 2001.

 

[Deleted User YDKXO]

Princess 61 in 2002 cost £578580.00 exc vat

Bank of England Inflation Calculator - £849016.83

Princess 60/102 £ 1,049,000.00 exc vat – base price when launched was £962650.00

So£200K more than inflation.

Late to this thread because of my temporary absence but IMHO this is the only way to analyse prices of mobos. Making comparisons with Range Rovers is just fatuous. I might as well cite the example of a BMW I bought in 1996 for £26500, the equivalent model of which costs less than £40000 now which would show that the price inflation of mobos is far higher. Equally fatuous

The question really is why mobo prices have outstripped inflation over an extended period. They're still made of plastic and iron much as they ever were. They haven't got any heavier, in fact quite the opposite, so the quantity of materials hasn't increased. Yes there is a bit more in the way of equipment on board but you would think that any increase in cost due to that would be more than offset by what should be a continual drive for production efficiencies generally. Lastly there hasn't been an enormous deterioration in the value of Sterling which would make the cost of imported materials significantly higher. I am at a loss therefore to explain why mobo prices have exceeded inflation for so long. Maybe an industry insider could explain?

One thing is for sure. The fact that the new mobo prices are rising faster than inflation means that there is an increasingly smaller number of potential buyers who can afford to buy them. Not only that but when these new mobos find their way on to the secondhand market, there is an increasingly small number of buyers willing to pay anywhere near the new price to buy them. So there is a double whammy for new boat buyers; they must pay an inflated price to buy them and then they have to take a huge hit when selling them on. Its no wonder that boat manufacturers have to heavily discount their products to shift them and make no profit as a result

 

[BartW]

The question really is why mobo prices have outstripped inflation over an extended period. They're still made of plastic and iron much as they ever were. They haven't got any heavier, in fact quite the opposite, so the quantity of materials hasn't increased. Yes there is a bit more in the way of equipment on board but you would think that any increase in cost due to that would be more than offset by what should be a continual drive for production efficiencies generally. Lastly there hasn't been an enormous deterioration in the value of Sterling which would make the cost of imported materials significantly higher. I am at a loss therefore to explain why mobo prices have exceeded inflation for so long.

how about labour cost ? I'm not sure if the increasing labour cost in your country is in line with average inflation.
Most consumer products prices haven't increased a lot due to better and more efficient production methods,
imo boat manufacturing is still very labour intensive, may I say old fashion.

there are a few exceptions (not in UK Afaik) who are able to produce with modern techniques at lower labour cost, and that reflects in lower prices for the customers or better margins for the factory
(all imho)

 

[Markergi]

I guess the efficiency gains in most manufacturing has helped offset rising labour costs and keep inflation lower than if those gains weren't found, but boat building (at least in the UK) being more of a cottage industry, hasn't been able to do the same.

 

[Anders_P42]

Perhaps Prinseeker charge a premium because they can get away charging one? Clearly there are enough punters willing / able to pay above inflation prices, or their sales would dry up and they would be forced to lower prices again?

Anders

 

[MapisM]

They haven't got any heavier, in fact quite the opposite, so the quantity of materials hasn't increased.

Lighter constructions as such can actually be a plus in planing boats, and sometimes it implies higher costs - as with carbon fiber and other hi-tech materials.
Not that I think it's the case with the latest boats construction trends, at least not with the type of boats which are being discussed.
Otoh, rather than from lower weight and/or poorer materials, a more relevant part of the cost reductions which surely all builders have adopted in the last decade comes from style changes.
I mean, there's no boatbuilder on this planet that adopted the minimalist/squared design just because it was fashionable.
It was strictly a cost-driven choice, and there's no doubt that all the boat interiors built up to the early years of the last decade were more expensive for the builders - and only marginally because of heavier materials, but mostly because they required more (and more skilled!) manpower.

 

[Deleted User YDKXO]

how about labour cost ? I'm not sure if the increasing labour cost in your country is in line with average inflation.

Its stating the obvious really but generally speaking labour cost inflation in the UK tends to increase a bit faster than price inflation during boom times and lag behind price inflation during recessionary times. Overall I guess over an extended period of time labour cost inflation will increase slightly faster than price inflation but IMHO not by enough to account for the inflation in mobo prices that admillington calculated. Also as we said, productivity efficiency gains should be offsetting some of that labour cost inflation

Yes boat building is not a modern manufacturing industry but IMHO you would have expected prices to have increased broadly in line with inflation

Btw this will please henryf. I received an email newsletter from Ferretti today clearly quoting prices for some of their new boats and amazingly for Ferretti, some of those prices actually look quite competitive. £770k for a Pershing 54 which makes £1m for a Targa 53 look a tad optimistic

 

[MapisM]

Btw this will please henryf. I received an email newsletter from Ferretti today clearly quoting prices for some of their new boats and amazingly for Ferretti, some of those prices actually look quite competitive. £770k for a Pershing 54 which makes £1m for a Targa 53 look a tad optimistic

I guess that's for the IPS version, which unless I'm mistaken is a new entry for Pershing, obviously meant to attract newcomers.
As much as I like Pershings in general, if you're saying that because you think henryf might be interested, I'd rather suggest him to consider the proper version, i.e. the one with Cats+surface transmissions.
Did they give you also the price of that one? She's bound to be more expensive for good, I suppose...

 

[Deleted User YDKXO]

I guess that's for the IPS version, which unless I'm mistaken is a new entry for Pershing, obviously meant to attract newcomers.
As much as I like Pershings in general, if you're saying that because you think henryf might be interested, I'd rather suggest him to consider the proper version, i.e. the one with Cats+surface transmissions.
Did they give you also the price of that one? She's bound to be more expensive for good, I suppose...

Yup the Arnesen drive version was something like £880k. Also btw the new Ferretti 450 has a price tag of £500k. I'm guessing these prices are ex VAT and bare bones spec ie no steering wheel! But all the same it seems that the Ferretti group has got the message that punters are no longer willing to pay stupid prices for new boats and then watch 50% of that stupid price get burnt in depreciation in the first 5 yrs

With regard to henryf I wasn't suggesting that he might be interested in the Pershing. I was more referring to his opinion that boat builders are up front about pricing

 

[wakeup]

Its stating the obvious really but generally speaking labour cost inflation in the UK tends to increase a bit faster than price inflation during boom times and lag behind price inflation during recessionary times. Overall I guess over an extended period of time labour cost inflation will increase slightly faster than price inflation but IMHO not by enough to account for the inflation in mobo prices that admillington calculated. Also as we said, productivity efficiency gains should be offsetting some of that labour cost inflation

I suspect if you were to compare man hours of a boat built in 1980s with one today there would be a significant difference. Despite gains in 'efficiency', most modern boats have so much kit, wood and leather that you no longer see any grp and that can only be done by a bloke with a drill, glue and staple gun. So I suspect that the cost of labour per hour has leapt up and the number of hours to build a modern boat has near doubled.

 

[Anders_P42]

Yup the Arnesen drive version was something like £880k. Also btw the new Ferretti 450 has a price tag of £500k. I'm guessing these prices are ex VAT and bare bones spec ie no steering wheel! But all the same it seems that the Ferretti group has got the message that punters are no longer willing to pay stupid prices for new boats and then watch 50% of that stupid price get burnt in depreciation in the first 5 yrs

With regard to henryf I wasn't suggesting that he might be interested in the Pershing. I was more referring to his opinion that boat builders are up front about pricing

That could be an inc VAT price for the 450...Princess 43 base price £427 + VAT when I asked at last show.

Anders

 

[MapisM]

So I suspect that the cost of labour per hour has leapt up and the number of hours to build a modern boat has near doubled.

'Course the hourly labout cost went up, but I wholeheartedly disagree with the "and" part of your statement.
Aside from knowing first hand (i.e. having been told by a friend who happens to be a builder) that it's exactly the other way round, do you really think that "modern" boats require more manpower because of their kit, wood and leather, compared to those built 10 or 20 years ago?
Kit: ok, for electronics particularly, modern boats are indeed more sophisticated. But neither the components cost went up a lot, nor the time required for installation - if anything, the opposite.
Leather & wood: you must be joking. Name me two boats of similar size, built by the same yard, where you can find more wood and leather (not to mention better selected/worked/fitted!) in their current models, compared to 20 years ago. I can't think of one single example, whilst I can think of many (and I'm talking of mainstream builders, like Ferretti, Sanlorenzo, Sunseeker, Azimut, Princess, to name but a few) which are exactly the other way round.

 

[wakeup]

where you can find more wood and leather (not to mention better selected/worked/fitted!) in their current models, compared to 20 years ago. I can't think of one single example, whilst I can think of many (and I'm talking of mainstream builders, like Ferretti, Sanlorenzo, Sunseeker, Azimut, Princess, to name but a few) which are exactly the other way round.

Not suggesting the very big boats have more leather and wood, however try comparing a 1990 Targa 34 with a Targa 38 of today or a Princess V40 with a V39 of today. Plus I would add that the quality and therefore cost of fittings has improved significantly. You are obviously in the know about man hours and I can't contradict that and I did use the phrase that I 'suspected that' in other words no empirical evidence.

Why do you suppose boats are so much more expensive if there is now less leather and wood being lavished on them? Clearly the boats companies are not raking in massive profits so where is the cost burden?

 

[MapisM]

Why do you suppose boats are so much more expensive

That's the million $ question.
If I should name the most relevant factor, at risk of making a sweeping generalization, I would say the inability of the industry to take the opportunity of the post-crisis shake-out to conglomerate, restructure, and eventually become more industrialised/efficient.
Actually, this is something that did happen to some extent, but there's still way to go.
As a result of not having been able to do so (or not enough), builders are faced with the dilemma of still having too much overhead costs on one hand, and otoh a shrinked market that can't help absorbing them with high volumes. So, they try/hope to deal with that by increasing prices.
But of course, that's easy to do while printing the price lists, and not so much when looking for someone actually willing to pay...

 

[Deleted User YDKXO]

Leather & wood: you must be joking. Name me two boats of similar size, built by the same yard, where you can find more wood and leather (not to mention better selected/worked/fitted!) in their current models, compared to 20 years ago..

Agreed. There are definitely fewer labour intensive decorative wood and leather components on modern boats these days. In fact whenever you go on to a boat at a boat show, you can pretty much see how the builders have shaved costs in these areas. in fact as I understand it, interior furniture is one area where the boat builders have improved their efficiency by going from entirely hand built in situ to CAD built off site assemblies.

It would be very surprising if the number of labour hours to build a mobo had increased over the years. In pretty much every industrial process, the target is always to reduce the number of labour hours because labour hours is one element of the process you can control whereas the cost of materials is largely outside your control

 

[henryf]

Definitely not in the market for a Pershing !

What a terrible website by the way. All I can get is a splash video and some boats scrolling across the bottom of the screen. Clicking on "models" or any of the scrolling boats does nothing, so no idea what they sell.

Maybe their IT dept just haven't come across iPads yet

Henry

 

[MapisM]

Where did you find "models"? You're maybe meaning "yachts", at a guess.
Regardless, it's working just fine both on my poor man Windows PC, and also on SWMBO MacBook, that I checked just in case.
So, you'd better blame Apple for their lousy cross-platform compatibility, I reckon!

That said, if you never tried a Pershing on Arnesons, you definitely should (but sorry, can't offer that myself ATM, before you ask!).
If your cars preferences are anything to go by, you might well sign on the dotted line just after the ride, suddenly becoming FORMERLY "known for your love of Princess"...