Boat price inflation

petem

petem

Well-Known Member
Joined
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Location
Cotswolds / Altea
www.fairlineownersclub.com
In the past ten years new car prices (from superminis to super cars) have remained virtually static. The prices of electronics have dropped. Yet I'm guessing that new boat prices have roughly doubled. Why is this? Is it because car manufacturing is now more efficient and most electronic items are produced in te far east? Whereas boat manufacturing has remained unchanged. Surely the likes of Fairline and Princess could offshore/sub-contract more work to places with cheaper labour markets and bring prices down. Other manufactureres do this e.g. Elegance and Trader with no loss in quality.

Pete
 
I would hazard a guess that transport is the big hurdle to overcome here... anything small-ish that fits into a container is fine and economic to transport, but once you get outside the standard sizes for freighting the costs shoot up astronomically. Just a guess....
 
If you compare like for like, easier at the small end of the market, then I don't think you will find anything like a doubling of the price. However even then comparison is a little difficult because what you are getting it's quite the same - on one level yesterdays GL is todays base model and on another you will now get viynlester resins instead of polyester from many manufactures. Finally 10 years ago the price advertised for new craft was closer to the price a normal buyer paid (there were deals but they were marketed rather than 'made'); today's retail prices apear pitched more with the expectation of 'negotiation'.

I agree with you that labour is a huge part of the costs but many larger craft are built int he far east already.
 
Don't think the comparison with cars and electronic goods is the right one Pete. The car industry was taking the P!ss with the UK market and got pulled up for it by the EU and had to take action. Car manufacturers have also achieved cost savings through squeezing their supply chain. In electronics the driver for price reduction had been improvements in technology and fierce competition in a mass consumer markets.

A fairer comparison would I believe be house prices. Boats are still a "niche" product (even companies like Brunswick don't produce in the sort of volume just a small car manufacturer does). So there is less price competition. Also the way boat purchases are financed is more akin to a house and we have enjoyed a long period of low interest rates.

In a nutshell, they have increased their prices simply because they can and people will still buy their boats.
 
Well I agree with you, Pete. In one sense its a reflection of what the market is willing to pay and also that there is'nt huge overcapacity in the boat building industry as there is in the car industry nor huge fixed costs which mean that car manufacturers have to make a certain number of cars per year to cover these costs and think how they're going to sell them later. Its also a reflection of the fact that boat building is very labour intensive and since labour costs are always going up, so do prices of boats
I also agree that builders should look at least at moulding hulls in lower cost areas. In fact, I do know of one builder who is having hulls moulded in Turkey where boat building skills are well developed. I'ts a general trend in the global economy for labour intensive jobs to migrate to lower cost areas and eventually boat building will go the same way
 
the boats themselves have changed too, surely. Now its luxurious galleys, flatscreen tvs, automated/electronic everything. And the engines cost a fortune in themselves. I wonder what the spread in prices is between the cheapest and most expensive 30ft for example. Id guess more than double. Then R+D is probably pretty heafty, all those regulations the boats now have to meet for various countries,liability.... I wonder how much of the cost of a boat is actually a direct cost !
 
Re: Boat price inflation - become a boat builder!

Despite not having my own MOBO I do like them and find that this forum (generally) has the more interesting threads (for me).

I have thought about becoming a boat builder over the years! Although perhaps to date daydream is more of an accurate description!

I am slightly handicapped by lack of practical skills - but from having followed the ups and downs of the Bristish boat industry via the pages of the various mags for 30 years, the fact that the boss can't cut a piece of wood in a straight line does not appear to be the cause of the demise of most businesses /forums/images/graemlins/grin.gif

I have spent a lot of time out in the Far East so the concept of setting up abraod although very daunting is not something which is completely off the radar and as already said the lower wages and skills available is an attraction - although also a handicap in places where to up productivity it seems it is often the most cost effective thing to throw another couple of bodies at the situation rather than having the option of bringing in the skills required - but that is another story.

Anyone else ever though to themselves "I would love to be a boat builder" (or is it just me?).

For me, I guess, it is the fact that you create / help create something that actaully exists - rather than (in my case) another bit of meaningless paper passing over my desk travelling from nowhere enroute to meaninglessness. (but it pays OK - so who am I to complain! - I have MET people smarter than me cleaning toilets........and far worse for a dollar a day........some of whom have ended up dead from it).

In addition to actually creating something real, it would also be nice that something you created gave enjoyment to folk and also looked after them. Of course their would also be teh enjoyment of the challenge of running a boat building business succesfully. although how much enjoyment this would be is arguable!

The question then is what sort of boat building should I start with? - maybe this deserves it's own thread? I was thinking start small, rather than with something to compete with a 50 foot fairline!
 
Re: Boat price inflation - become a boat builder!

I have done a Google and am guessing you are jesting! /forums/images/graemlins/laugh.gif /forums/images/graemlins/laugh.gif Unless their is some news I have missed.

Birchwood 290

Would be a bit ambitious me thinks for a start up anyway! and I was also (heresy!?) thinking of maybe something with sails, at least at first!

F#ck it, I will start a new thread.........."I want to become a Boat Builder - what should I make?"......... I think I will put it in PBO......because it crosses over from Mobo to Yachtie.

(Might take a little while to write /forums/images/graemlins/blush.gif)
 
Re: Boat price inflation - become a boat builder!

I had missed something then!

Bet it wasn't because the boss couldn't cut a piece of wood in a straight line /forums/images/graemlins/smile.gif /forums/images/graemlins/smile.gif
 
Re: Boat price inflation - become a boat builder!

Labour costs are part of the story, but boat building is a small, LOW volume business. The whole of Sealine is 700 people!! Even a popular boat like the S28 had only 400 or so built during its lifetime. Subcontracting can work well if your subcons are on your wavelength & timezone, else you will spend 2x as much on intercontinental flights, shipping costs, & troubleshooters instead.

If you were trying to build 10,000 boats a year, you wouldn't do it in-house, but the physical closeness of carpenters/upholsterers/sparkies etc. means that the low volume model of everything-around-you is much easier to manage.

And anyway, it would be self-defeating, cos if they sacked the workforce and built Sealines in Elbonia, I wouldn't buy one on principle.

dv.
 
Re: Boat price inflation - become a boat builder!

[ QUOTE ]
Subcontracting can work well if your subcons are on your wavelength & timezone, else you will spend 2x as much on intercontinental flights, shipping costs, & troubleshooters instead.

[/ QUOTE ]
I have a lot of experience in offshoring work to India. Believe it or not some of our projects are very successful. We have daily conference calls via internet lines and have no language problems (mainly because I interviewed everyone before they were taken on). However, the projects that work best are the simple repetitive mundane tasks. Typically a boat is made up of many fibreglass mouldings (I have 250 separate mouldings in mind for a 30ft boat). I might be talking complete rubbish here but surely the task of producing the mouldings for say 10 boats (i.e. 2500 pieces) could easily be offshored and shipped in a standard container(s) back to the UK for assembly.

[ QUOTE ]
And anyway, it would be self-defeating, cos if they sacked the workforce and built Sealines in Elbonia, I wouldn't buy one on principle.

[/ QUOTE ]
Bollox. If the Elbonians (Dilbert fan eh!) built Sealines to a better quality (not hard) and cheaper than Sealine themselves, I'm sure you'd buy one with no hesitation. After all, why should a boat be different to virtually any other consumer item is made in the Far East. Don't see many people complaining about buying Japanese cars or clothing or electronics.

Pete
 
Re: Boat price inflation - become a boat builder!

>
>If the Elbonians (Dilbert fan eh!) built Sealines to a better quality (not hard) and cheaper than Sealine themselves, I'm sure you'd buy one with no hesitation.

If I was a first time buyer, it wouldn't make much difference. But I'm not, and it does. You are assuming that a boat only has "utility" value, which isn't the case, apart from right at the bottom end of the market.

Not claiming my logic is in any way sound, but: A boat is several things:
- The design
- The parts (which come from disparate locations anyway). I don't particularly care if the shower tray is moulded in Elbonia or Kidderminster, but I do care about the quality of those parts.
- The hull & deck, cabinetry, electrics, plumbing, and final assembly of those parts. If this is done in Elbonia, then the boat is Elbonian, no way round it. As such, I'll consider it against other Elbonian built boats, and strike it off the list of British built ones.

I guess what I'm trying to say, badly, is that when I buy a boat, I'm investing a bit in the national characteristics of the country it was designed in and assembled in as well. It doesn't have to be British, it just so happens that the boats I'm prepared to make this investment in are either British or Italian, although in theory, any EU country would be a candidate.

Anyway, this is all irrelevant. Point is, if the outsourced model actually worked, then all boatbuilders would be doing it. But it doesn't, and I suspect the reason is that for a boat of any size, once you start putting stuff together, then it doesn't take long before you wind up with some quite large and fragile assemblies (e.g. the Galley ?) which aren't easy to pack or ship. I don't think the number of mouldings in your 30 footer is correct: I think there are fewer, larger mouldings...

dv.
 
Re: Boat price inflation - become a boat builder!

>
> I have a lot of experience in offshoring work to India.
>

I have worked alongside customers where this has both succeeded with flying colours, and failed in a miserable and expensive kind of way involving the Indian legal system. Not going in to details, but the successes were with the right people, tightly defined scope and specs, and good project management. Failures were where an initial small success was followed by an attempt to use the same model on something much larger, too quickly, with language problems, woolly requirements and a PM that couldn't organise his own funeral, although we did offer to help...
 
Re: Boat price inflation - become a boat builder!

>
>You are assuming that a boat only has "utility" value
>

What I mean by this, is that there is some sort of emotional attachment I have to the boat that I don't have with, for example, my Toaster. I don't subscribe to any Toasting internet forums, "Toasters Monthly" magazine, and certainly not "Practical Toaster Owner". There was a poor turnout at the last Breville club meeting, and at parties, it isn't the case that the Tefal owners won't be seen dead talking to anyone with a Kenwood.
 
What a brilliant question!!!

gigm - you said "what is the spread of cost between cheapest and most expensive 30 footer"

Well what a brilliant subject for MBM to cover. Take two cruisers of roughly the same proportions, one at the top and the other at the bottom of the price range and test report them.

I reckon all manufacturing prices have dropped - its just that the boat industry is still filling its boots right now.

How does any industry know when its prices are too expensive? When the customer waiting list starts to fade away! And as long as waiting lists for boats remains bouyant (excuse pun) you will see prices continue to outstrip inflation.
 
Re: Boat price inflation - become a boat builder!

[ QUOTE ]
Point is, if the outsourced model actually worked, then all boatbuilders would be doing it.

[/ QUOTE ]
Not convinced about this.

I'm encouraged by some of your comments. From what you say, a boat that was designed and assembled in the UK from foreign built components might be acceptable providing the quality was right.
 
Re: Boat price inflation - become a boat builder!

I think a mistake a lot of businesses are making is the complacent belief that cheaper labour markets=poorer quality, this is not neccessarily the case.

There is significant investment in the latest technology and processes going into low cost labour markets meaning that they are every bit as capable of producing a quality product as so called Western Industrialised nations.

The the old adage that "They are cheap but we compete by being clever" is no longer applicable, <u>They</u> are now Cheap AND Clever.

I think the big issue with split location boat manufacturing is the cost of freight between the various sites / countries which may well go a long way to wiping out any benefit. I think I'm right in saying that in the US Brunswick build Bayliners in several plants across the country but each plant buils complete boats, so if thats how the worlds largest production boatbuilder sees as the way to do it then there will be good reasons for it. I believe that some smaller Bayliners are now built in Mexico but not the larger cruisers (Also think some may be made in Eastern Europe but may be wrong).


Martyn
 
Re: Boat price inflation - become a boat builder!

"every bit as capable of producing a quality product as so called Western Industrialised nations."

It depends what products you are talking about. Flat Screen TV's, yes please. Chinese Automobiles ? No thanks.
 
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