Fairline Factory Visit (aka Jolly Boys Outing)

[KevB]

Before it goes off topic on the second page, this current thread is a perfect example.

http://www.ybw.com/forums/showthread.php?449920-50ft-or-62ft-Is-bigger-than-50-really-too-big-for-the-uk

 

[MapisM]

take the biggest boating scene in the world, the Solent as an example.

Mmm... Are you sure it is, really?
I don't have any numbers in mind, and I'm aware that there's plenty of boats in the Solent area.
But have you ever driven along the Ligurian+SoF coast?
No matter how many time I've been there, I always discover a new marina.
There's literally hundreds, not dozens, in a relatively small area.
And in that area, for some vessels, 50' is the size of their tender(s)!

 

[Cheery]

Aston Martin tried to do it the other way around with the Cygnet. That went well didn't it. If you are known for a quality item in your profession let the others chase the smaller margins and larger build numbers. On the Sunseeker programme they stated that they could sell 4 of the 131' for the same value as 40 smaller yachts. Yes, the buyers may be more 'focussed' but you too can focus on those few customers.

IMHO

 

[jrudge]

I appreciate that Fairline want to be a global player but take the biggest boating scene in the world, the Solent as an example. 50' + isn't turn up on your boat and go, you have to book into a marina well in advance and many will only be able to accommodate you on a hammer head. It's like ford saying we can't compete with the French on small cars so we'll start at the Mondeo and let others have the most popular end of the market.

This is perocial to the solent which I would be surprised is the biggest boating scene in the world. The Balearics is a hugely bigger cruising ground and I just turn up in a 65 ft and have been turned away once ( and then just went to the next marina down the coast) so it is horses for courses. But if you have to book, then you book I can't see that would stop you buying a boat.

Also from my own personal view point I cannot see the benefit in a large boat in the UK given the investment required and the generally poor weather - the brochure dream is of sunny days and warm water. As far as I know the majority of large boats ( I said majority mind not all) are sold by the UK dealers to brits who then stick it on a ship somewhere sunny.

Remember we are talking NEW boats. New boats are expensive. The people that buy them are in general terms ( its is actually not so general) are either wealthy in the first place, have sold a business or have retired. There will be exceptions but talk to the dealers - it is pretty accurate. So why not buy a 50 ft + boat? Whilst with any boat you need instruction there is nothing inherently different to helming a 40, 50 or 65 foot boat. In all honesty it get easier - hydraulic bow and stern thrusters, cameras etc. Play flash harry and you will probably prang it, but that is the same for a smaller boat as well.

Fairline are at present going down to 38 feet - but the issue there is how do you make money - mass produced competition is everywhere. They have sold 2 x squadron 65s in the three months since they started. There are 5 current model s65s in Cala Dor - dont think they dont sell as this is simply not true.

My view - a well designed well built boat will sell. An old model ( many fairlines are either dated or well on the way to it) simply wont. This is what they are investing in to put right.

 

[KevB]

Aston Martin tried to do it the other way around with the Cygnet. That went well didn't it. If you are known for a quality item in your profession let the others chase the smaller margins and larger build numbers. On the Sunseeker programme they stated that they could sell 4 of the 131' for the same value as 40 smaller yachts. Yes, the buyers may be more 'focussed' but you too can focus on those few customers.
IMHO

Aston Martin didn't try anything, they have to produce a small car to stay within the european motoring rules/laws. Not sure which rule it is though

 

[henryf]

I appreciate that Fairline want to be a global player but take a tiny boating area within the world market, the Solent as an example. 50' + isn't turn up on your boat and go, you have to book into a marina well in advance and many will only be able to accommodate you on a hammer head.

Edited for accuracy

You have to understand that the Solent is massively different to parts of the world where Fairline can potentially make money. People aren't just coming in at 40 or 50 feet as a first boat, they are looking at 70 or 80 foot boats. There is no historic boating infrastructure, no middle class, just wealthy people looking to buy into boating and take advantage of an emerging infrastructure of marinas.

Whilst in Singapore at the boat show I spoke to several people who would like to get in at the 70-80 foot range but who are hampered by a lack of facilities in their part of the world. Even somewhere like Singapore is a very young and naive scene when it comes to private boats.

To be profitable in small boats you need to do huge numbers and none of the UK builders are geared up to that. What they can do though is use the cache of UK design and build together with experience gained over the years to deliver a world class product which sells.

Have a look at the Med / SoF boating scene and tell me that 50 foot is too large. My boat would be smaller than many of the tenders !

Henry

 

[Portofino]

This thread going all over the place.

Solent is a fraction of SOF or western Italian coast in boating terms ,really guys its tiny .Guess less than 1% - that low in terms of £ -or Euros spent, supporting, marinas etc -whole boating economy >

Car industry analogies keep cropping up -easy hole to get sucked into - People NEED cars and the price ranges from guess £7999 VW "UP" to £1.2M Buggati veron -with many permutations between , very congested around £20K mark + or - £5K, where millions are sold in the EU .
Aston cygnet was a stool pigeon to balance emission reg @ the time ( bring down fleet average ) -never a serious attempt to conquer any low end market.

Boats , are a discretionary item esp @ high end and made in v tiny numbers for the few prepared to buy .
The boat market is cut throat ,a few extra sales (or not in the case of "old FL" ) can make a huge difference.

like others wish FL well etc ,but those numbers worry me 7 or was it 10 boats eek !!
Land locked still -Hmm how can they -- or propose to
"build 4x 121,s" like SS and turn over £80M ? any time soon ? that's the $64000 Q tapping into the market above where they have been stuck for over a decade - @ 78ft .
Other wise the current backers when the honeymoon is over will lose interest and we are back to Sq 1-insolvency

 

[jrudge]

like others wish FL well etc ,but those numbers worry me 7 or was it 10 boats eek !!
Land locked still -Hmm how can they -- or propose to
"build 4x 121,s" like SS and turn over £80M ? any time soon ? that's the $64000 Q tapping into the market above where they have been stuck for over a decade - @ 78ft .
Other wise the current backers when the honeymoon is over will lose interest and we are back to Sq 1-insolvency

They have been running for 3 months since they bought it from the adminstrators. To have one boat in build would be an achievement - they have 7 odd ( pete may have more fingers than me!) all bar 2 are brand new orders with people paying deposits etc. I think that is outstanding - how many did you have in mind?

There has been debate in the past about Fairline going big. For me they might do it one day but the risks are huge, and the rewards - well one could question that as Sunseeker and Princess are losing money. The size argument is a red herring in my view and for well rehearsed reasons is not going to happen in the forceable future.

To build boats you need a skilled workforce and that they have in Oundle. I appreciate Princess and SS have chosen to go bigger but that does not make it the only way to survive or something to copy at all costs.

 

[henryf]

In the world market 78 feet isn't huge and there is a definite problem as owners want to trade up, hence Sunseeker and Princess made the move to larger vessels.

I'm not convinced FL's demise was down to that ceiling though, I think it was more to do with lack of investment in new designs and being weighed down by large overhead costs.

Having larger boats to boost turnover and hopefully profit is a bonus but as Princess have discovered developing them is costly. You also have a surplus of staff once building gets underway and the build process is fine tuned. It was suggested to me that the first Princess 40 took about 140,000 man hours to build. Currently I think they take around 80-90,000 hours. Bearing in mind they do a 30, 35 and 40 meter boat you can see the magnitude of the task.

Henry

 

[rafiki_]

Aston Martin didn't try anything, they have to produce a small car to stay within the european motoring rules/laws. Not sure which rule it is though

They built the Cygnet, not to appeal to a wider market, but to have something new for their (then) current clients, when AML had no money to finance a proper new car. Town car for London that you could park when going to the Theatre. It looked awful, cost a fortune to build, and appealed to nobody. The regs you are referring to are the Eu 95g/km target for 2020. Cygnet was launched too early to impact this. There will be fines for manufacturers who miss this corporate target, as there are in the USA. Doesn't amount to a hill of beans though.

 

[Whitelighter]

Oops, late to this thread.

Firstly, thanks to PeteM for organising ant to Fairline for letting us through the door. It was a very interesting day, and answered a lot of questions though some of what we were told cant be shared on here.

I got the messgae from Fairline that they WANT to offer boats in the 30-40ft bracket, but it how to do it successfully that is the headache. Its a supoer competitive market and if they go down the route of a two cabin, 1 heads sports cruiser then there is not much slack with Beneteau, Jeannaeu, Bavaria, Sealine, Sessa, Windy, etc etc already occupying that space and making it very competitive. They dont see that the mid-budget product is bad and even Windy have hgad to move small boat construction to poland to stand a chance of keeping the price where buyers of even the top end 30-40ft stuff want to to be price wise.

Fairline have said if (when) then venture back into the 30-40ft segment it will have to be with something different. Now I dont know what that means, and they have no fixed plans but it wont be an updated T34 or P38, that much was pretty clear. They were quite resistant to outsourcing production - they really feel a brand value is being British and want to keep prodction here.

Overall I was very impressed with what I saw - even if it means Fairline will for the time being not be producing boats in the bracket I could expect to afford - though in 10 years time I might be ready to go bigger so if they pull their finger out there may well be some spectacular seconf hand choices around...

 

[MapisM]

Car industry analogies keep cropping up - easy hole to get sucked into

I couldn't agree more.
It strikes me that whoever compares automotive and boating industries must have never seen a car plant AND a boat yard (or neither).

Of course, in a sense, it's an attractive comparison, because we are all boaters (since we are here) and (obviously) drivers as well.
Besides, as the old saying goes, anyone is genuinely convinced to be a better than average driver...
But really folks, it's a comparison that doesn't make any sense.
Not any more than comparing Buccellati jewelry with T-shirts made in the People's Republic: you can wear both, but that's it.

That aside, there are two points you are making that I'm not sure to agree with:

One is about boats being discretionary items "esp @ high end".
As much as I wouldn't live without a boat as long as I can afford it, pleasure boats are all discretionary items period, imho.
Small or large, new or used, it's all a matter of proportion with anyone's disposable $$$.
There's much more than that to differentiate automotive and pleasure boat industries, anyway.

The second is re. 7 or 10 boats being a problem bound to lead to insolvency.
We had several small yards in Italy, widely recognised by connoisseurs as among the best boatbuilders of the planet in their own segments, who used to make money and progress even with such small numbers.
Of course, when the situation changed overnight from having a 3 years order book for those 10 boats to zero new orders - which is what happened after the global financial meltdown - anyone would have had a problem.
And it's not like those who were much bigger, with a financial leverage exploited beyond reason, eventually got much better results - aside from finding some Chinese folks with more money than sense willing to rescue them.... :ambivalence:

In fact, if there's one thing of what Pete told us about new FL strategies that I found a bit weird, is that they are already aiming at reaching a 3 digits number of boats per year.
What for, I wonder? If industries didn't learn a lesson about sustainable growth after 2008, I'm afraid they never will...

 

[petem]

MapisM, as I understand it, the factory units that they have can handle 100 units a year and they think that's a doable number to sell. Of course, the break even point may be below that. Assuming they've done their sums correctly that doesn't sound like a bad strategy to me.

 

[stelican]

What a load of tosh
You should ask to be allowed to visit the Fairline plant it would educate you in boat building

ref Kev b to Fairline being Ford of the boat world.


]

 

[KevB]

I'm probably not a boat builders dream customer as I bought my current boat new 14 years ago and still have it, but.. As the youngest kids get older we've recently had urges to look at bigger boats but I don't think even a massive lottery win would make me buy new again when there are such bargains on nearly new. Tough old business selling luxury items. Good luck to Fairline.

 

[PowerYachtBlog]

I couldn't agree more.
It strikes me that whoever compares automotive and boating industries must have never seen a car plant AND a boat yard (or neither).

Of course, in a sense, it's an attractive comparison, because we are all boaters (since we are here) and (obviously) drivers as well.
Besides, as the old saying goes, anyone is genuinely convinced to be a better than average driver...
But really folks, it's a comparison that doesn't make any sense.
Not any more than comparing Buccellati jewelry with T-shirts made in the People's Republic: you can wear both, but that's it.

That aside, there are two points you are making that I'm not sure to agree with:

One is about boats being discretionary items "esp @ high end".
As much as I wouldn't live without a boat as long as I can afford it, pleasure boats are all discretionary items period, imho.
Small or large, new or used, it's all a matter of proportion with anyone's disposable $$$.
There's much more than that to differentiate automotive and pleasure boat industries, anyway.

The second is re. 7 or 10 boats being a problem bound to lead to insolvency.
We had several small yards in Italy, widely recognised by connoisseurs as among the best boatbuilders of the planet in their own segments, who used to make money and progress even with such small numbers.
Of course, when the situation changed overnight from having a 3 years order book for those 10 boats to zero new orders - which is what happened after the global financial meltdown - anyone would have had a problem.
And it's not like those who were much bigger, with a financial leverage exploited beyond reason, eventually got much better results - aside from finding some Chinese folks with more money than sense willing to rescue them.... :ambivalence:

In fact, if there's one thing of what Pete told us about new FL strategies that I found a bit weird, is that they are already aiming at reaching a 3 digits number of boats per year.
What for, I wonder? If industries didn't learn a lesson about sustainable growth after 2008, I'm afraid they never will...

Post of the month. I keep on saying this from the mid-nineties, but you wrote it much better then I could ever say it.

 

[KevB]

I couldn't agree more.
It strikes me that whoever compares automotive and boating industries must have never seen a car plant AND a boat yard (or neither).

My analogy wasn't to compare boats to cars per se but any manufacturer turning away from the most popular end of the market because someone is already there. It's almost like saying they can do it better than us so we'll leave them to it.

 

[MapisM]

MapisM, as I understand it, the factory units that they have can handle 100 units a year and they think that's a doable number to sell. Of course, the break even point may be below that. Assuming they've done their sums correctly that doesn't sound like a bad strategy to me.

Yep, nowadays overcapacity is THE problem of many industries, and generally speaking I can see why infrastructures capable of handling 100 (or whatever) units can lure the management to try to achieve that number - overhead absorption and all that, I could write a book about it.
But what I was trying to say is that boatbuilding is one of the few industries (in sharp contrast with automotive, just to confirm my previous reasoning!) where by and large this is NOT such a critical element of the complex success equation imho, as some small builders has proved for decades.
That's why in FL boots I'd rather aim at niche than volumes, regardless of what sort of infrastructures they already have, which economically speaking are sunk costs anyway.
But hey, I never ran a shipyard, and I'm not Russian, so what do I know...?

 

[Deleted User YDKXO]

Probably because of different data protection laws (or interpretation) in Italy? The new FL is a different company, so, although it seems stupid, I can understand that they won't have access to the old data base. Data protection is a hot potato in the UK right now.

If there was a choice between losing my existing customer base and notionally transgessing UK data protection laws, I know what I'd do. The fact is that there are a few seriously pissed off Fairline owners around who feel that they should have been the first point of contact for the new company

 

[rafiki_]

Probably because of different data protection laws (or interpretation) in Italy? The new FL is a different company, so, although it seems stupid, I can understand that they won't have access to the old data base. Data protection is a hot potato in the UK right now.

My understanding from yesterday is that the dealers hold the client data. Until very recently EBY/BoatsUK was by far the biggest dealer, and hence will hold the relevant client data. However, they are no longer trying to sell new Fairlines, and their client listing is very precious to them. New Fairline Co is going through the process of appointing (or re-appointing) new dealers under new terms, so access to the right data should improve. As JRudge has pointed out, this business is about 3 months old, and is sorting through its priorities. One step at a time.