davids0865
Well-Known Member
Oh, so so true.
Fairline Boats purchased
- Thread starter stelican
- Start date
Oh, so so true.
crustysailor321
Member
Quite true, but that situation is not necessarily unique to the UK. German auto makers like Mercedes, BMW and VW also face pressure from their investors to make a good return ASAP. And so are the French, Beneteau is listed on Euronext after all, they certainly face demands to produce quick returns for minimal cost. So how come us Brits seem to fall down when it comes to investing, either not enough of it, or using it for the wrong purposes (i.e. making incorrect predictions and produce products that don't meet the demands of the market)?
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henryf
Well-Known Member
I'm not sure I agree with your "Price Bloodbath". I know you live in hope that prices will halve, as do we all, but as things stand it will merely be business as usual. Fairline boats will be cheap because they are a couple of generations out of step with the market leaders. Buyers will be offered huge discounts on list price and / or generous part exchanges but only because the true value of the boat is considerably less than RRP.
For me it's the setting of retail prices at the same level as their more modern rivals which makes the brand untenable. Lose the whole underground wheeling and dealing thing, be sensible and open. Then you can appeal to buyers who feel left behind by the stratospheric prices demanded of the latest and greatest designs.
Henry
admillington
Well-Known Member
I'm not sure I agree with your "Price Bloodbath". I know you live in hope that prices will halve, as do we all, but as things stand it will merely be business as usual. Fairline boats will be cheap because they are a couple of generations out of step with the market leaders. Buyers will be offered huge discounts on list price and / or generous part exchanges but only because the true value of the boat is considerably less than RRP.
For me it's the setting of retail prices at the same level as their more modern rivals which makes the brand untenable. Lose the whole underground wheeling and dealing thing, be sensible and open. Then you can appeal to buyers who feel left behind by the stratospheric prices demanded of the latest and greatest designs.
Henry
Totally agree - but I fear that Fairline will want to keep a build to order model and that the dealers will want to make a decent profit on each deal - As Essex Boatyards (boats.co.uk) are out of the Fairline game, the huge discounts on stock boats and part exchanges are out of the window - As they are now they are dealing with Princess!
D
Deleted User YDKXO
Guest
Well thats my definition of a price bloodbath. Huge discounts on RRP implies that the dealer margin is cut to the bone and the factory has to chip in with extra discount to the dealer to make a deal fly so nobody makes an acceptable margin but at least the product goes out of the factory gate. I know how it works because it happens in my industry and we all do it to protect market share and retain key customers
If Fairline have to go down this route to gain market share because their products are no different to Princess and Sunseeker, then in a few years time they will be back in the poo. The key to success for a smaller manufacturer like Fairline is not to try to compete head on with the likes of Princess and Sunseeker but innovate new products which don't have to be discounted so heavily to sell. Of course that's very easy to say but a lot harder to do and it takes a big investment to get there
Cheery
Well-Known Member
Is that not a strong argument for better designers then? If you are buying a boat and are looking at very similar models it becomes a Dutch auction. If, on the other hand, you are innovative and can offer some measure of bespoke element into smaller models you don't have to lop a chunk of the RRP.
rafiki_
Well-Known Member
Of course all businesses need to be commercially and fiscally adept, delivering to a recognized business plan, and hitting key metrics. In my experience the German manufacturers have a strong 21 year model cycle, which is why you can easily recognize the developments on cars like the Golf, 3 Series and E Class. The business really knows how to do these cars well, and invests considerably in product development to do so. The Brit car companies never had a cycle plan for their models, and product planning was all over the place. What you are seeing now at JLR is a proper cycle plan, clearly visible progress and development in their defined segments, and new segments being opened and exploited, based on current floorpans and powertrains. This delivers long term fiscal success. Even the Germans get it wrong at times, when the bean countres get too much influence. The E36 was a dog initially, the previous generation E Class had poor electrical reliability for ages, but being product led, the Germans kept investing till they got it right. Back to UK boatbuilders. Sunseelers shareholders have deep pockets. Sunseeker has a strong product plan, and the new management board will get them rapidly back to the black. Princess has made some changes recently, but their product line up needs some attention. Too many models. I hope that Fariline's new investors have a good business plan, with sufficient funding to make it work.
Portofino
Well-Known Member
All this comparison with the motor industry is pretty pointless
people need cars they do not need a pleasure boat ? floating apartment of ever increasing complexity -with that finished costs increasing - to as said £1.2 M for a 50 ish ftr?
The pool of buyers has shrunk and is still shrinking -so unable to support our "big 4 "
lowest quality small range dies first Sealine
next -dullest oldest modal line up -unable to max over 78 ft land locked -FL
mean while other 2 mop up -supported by deep pocketed owners .
How ever the accounts may be misleading in the sense of group one can trump up one or two off payment(s) for
"consulting " or" loans" to move money into another more tax efficient arm -so,s to to appear to make loss in the UK .
How ever I suspect the Russian owners will find out there s not enough home buyers -period -to support a 3rd .
Other 2 have established Med and foreign markets ,
people need cars they do not need a pleasure boat ? floating apartment of ever increasing complexity -with that finished costs increasing - to as said £1.2 M for a 50 ish ftr?
The pool of buyers has shrunk and is still shrinking -so unable to support our "big 4 "
lowest quality small range dies first Sealine
next -dullest oldest modal line up -unable to max over 78 ft land locked -FL
mean while other 2 mop up -supported by deep pocketed owners .
How ever the accounts may be misleading in the sense of group one can trump up one or two off payment(s) for
"consulting " or" loans" to move money into another more tax efficient arm -so,s to to appear to make loss in the UK .
How ever I suspect the Russian owners will find out there s not enough home buyers -period -to support a 3rd .
Other 2 have established Med and foreign markets ,
PowerYachtBlog
Well-Known Member
That's very well said Mike.
I would also put in the mix how effort to customization, will be put into the design of new Fairline's will also play a big part.
Many low volume builders (10 to 20 boats a year) have always survived and lived well for making a tailor made product to client's need.
Knowing a reply to a question before it is asked, instead of talking to your design studio back and forth can win customers a certain type every day.
But if they want to go 100 units I am not sure this is feasible at those nos.
Princess and Sunseeker are currently selling just above 100 and they don't customize much even on the bigger models.
jrudge
Well-Known Member
I depends I suppose on what you call customisation ....
Some is pretty simple to achieve - think of it as a longer list of factory fit options, willingness to take customers fabrics, customised AV system etc, customised finishes, choice of appliances, choice of light fittings etc which depending on your option list and the work you do upfront ( will a Miele xyz fit or not) you could offer alot of things to make a boat very different without getting that radical. Even if this seems quite tame remember that most builders are not interested in anything that is not in the catalogue.
Some falls into a middle category - I want a different shape sofa - nothing structural but it needs to be changed.
Then some clearly is difficult as you get to the core of the boat - move bulkheads, add in extra stairs and so on where I would imagine the production delays etc could get out of hand very quickly.
Boating as we all know is a compromise .... if your model can handle say 2 or 3 flavours of the customers compromise you are more likely to sell your boat if there is nil compromise solution.
Some is pretty simple to achieve - think of it as a longer list of factory fit options, willingness to take customers fabrics, customised AV system etc, customised finishes, choice of appliances, choice of light fittings etc which depending on your option list and the work you do upfront ( will a Miele xyz fit or not) you could offer alot of things to make a boat very different without getting that radical. Even if this seems quite tame remember that most builders are not interested in anything that is not in the catalogue.
Some falls into a middle category - I want a different shape sofa - nothing structural but it needs to be changed.
Then some clearly is difficult as you get to the core of the boat - move bulkheads, add in extra stairs and so on where I would imagine the production delays etc could get out of hand very quickly.
Boating as we all know is a compromise .... if your model can handle say 2 or 3 flavours of the customers compromise you are more likely to sell your boat if there is nil compromise solution.
rafiki_
Well-Known Member
Apologies, but we were discussing the merits or otherwise of management in British manufacturing, as one of the causes of the demise of UK boatbuilding. I introduced the auto sector to challenge this view. I don't think it wildly off topic, but apologise if you do :encouragement:
Portofino
Well-Known Member
No need to apologies -I,am with you on your pionts .re Uk
If I can add UK folks seem to me rarther myopic .Theres a big wide world outside the tiny island perched on the edge of EU
german / Japanese have been building and designing cars far better than BL ever did .-
Italiens build better boats and design -well streets ahead boats and cars .
Re customisation - ITAMA they made approx 20 hulls badged 42 /48 No 2 fitted out the same -each a slight variation in interior fit out and lay out .But at a price -customer can have what he wants .
If I can add UK folks seem to me rarther myopic .Theres a big wide world outside the tiny island perched on the edge of EU
german / Japanese have been building and designing cars far better than BL ever did .-
Italiens build better boats and design -well streets ahead boats and cars .
Re customisation - ITAMA they made approx 20 hulls badged 42 /48 No 2 fitted out the same -each a slight variation in interior fit out and lay out .But at a price -customer can have what he wants .
petem
Well-Known Member
I'm with you Portofino, I'd see ANY customisation request from a client as a revenue earning opportunity, it's not not like they're building a million boats a year FFS.
JumbleDuck
Well-Known Member
"We" don't build cars in the UK. Foreigners build cars in the UK, and they do it jolly well.
JumbleDuck
Well-Known Member
The UK car industry designed some cracking good cars - Jaguar E-Type was a game-changing sports car and the Rover P6 was one of the fiew cars which could technically challenge the Citroẽn DS. Even the smaller manufacturers had some very respectable line ups - very few manufacturers at the time had a range as good as Triumph: Herald / Vitesse / Spitfire / GT6 / Toledo / Dolomite / 2000 / Stag covered everything and did it pretty well. It's just a shame that quality control across the industry was lousy. The infamous "Friday afternoon" cars from Cowley, which had their body shells left outside in the rain between fabrication and painting. Jaguar E-Type bonnets which had to be made unfinished at the rear end because the chassis length could vary by an inch each way from spec.
Conversely, some British cars were beautifully made but terribly designed. When Rolls bought Citroën hydraulic system they tried to design their own brake valve rather than use the French one. They never, ever managed to stop it leaking, and in the end simply specified a child's disposable nappy placed under it and changed at each service. The Citroën version - I have one - never leaks a drop.
If only the UK car industry could have brought excellence in design and excellence in manufacture together, but sadly it rarely did.
Some years ago a friend of mine was called in to investigate persistent quality issues a Large, Prestigious UK Car Maker. He soon found the problem. The night shift would carefully make one bodyshell to spec and then keep it aside to run repeatedly through the quality control metrology system while sending everything else up the line unchecked. Well, that was the secondary problem. The main problem was that not a single manager deigned to be in the factory at night, let alone walk the floor. If they had, the problem would have cleared up at once.
Oops. Bit of a digression there.
jimmy_the_builder
Well-Known Member
grumpy_o_g
Well-Known Member
UK workforce great,UK owners/management woeful?
Still a hell of lot of truth in that unfortunately (and I'm a UK manager).
crustysailor321
Member
British management under foreign ownership seems to work for manufacturing. But not British management under British owners. So there is a hint of something rotten with the management culture in the UK if left to their own devices. That is the key difference. For a long while, I thought the boat building industry would escape this trend, as Sunseeker, Princess and Fairline were doing well under British owners. But I was proven wrong in recent years as they were all bought up.
Now this could be a reflection of the brand's inherent success, since for foreign owners to buy them, they must find it attractive in some way. So in that sense you could regard those British-owned brands as a success. But, Sunseeker was enduring losses before Wanda Group bought them out, so even if they have strong brand equity, the profit/loss spreadsheets look decidedly less appealing.
Truth be told, Princess hasn't done all that well in the last year and neither has Sunseeker. But they can rest easy because their French and Chinese owners have the money to support them.
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rafiki_
Well-Known Member
As stated previously, I don't think there is an awful lot wrong with British management these days, the biggest challenge is British investment, which seeks a very short term return. Some foreign ownership is happier to invest for the future, rather than seeking an immediate return. That is what Wanda is doing with Sunny. Unfortunately for Fairline, their VC investor wanted a decent return in 3-5 years, which is standard practice for a VC, but the business was unable to achieve this, hence the exit. Same thing happened with Sealine. In fact one could criticise Brunswick (US Management) for the failure of Sealine. I really don't get this British obsession of self flagellation. There are many things we are good at, some we are not so good at. Most countries could say the same.
benjenbav
Well-Known Member
I wonder if the following would work as a business model for F/L:
Build to order.
Offer range of customisations of existing models, like Overfinch.
Invest in computer modelling of options rather than new designs.
Cut out dealer network.
Bond unit-purchase risk.
All of the above could be achieved with relatively low investment, a small workforce, minor cash-bleed.
Downside would be the boats would be "old design". But who are we kidding here. So long as the thing floats and has nice cushions it's really as up to date as anything offered by anyone else, except in the world of the emperor's new clothes.
Build to order.
Offer range of customisations of existing models, like Overfinch.
Invest in computer modelling of options rather than new designs.
Cut out dealer network.
Bond unit-purchase risk.
All of the above could be achieved with relatively low investment, a small workforce, minor cash-bleed.
Downside would be the boats would be "old design". But who are we kidding here. So long as the thing floats and has nice cushions it's really as up to date as anything offered by anyone else, except in the world of the emperor's new clothes.
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