Fairline to loose 85 jobs

[jfm]

Must say I agree with Ari on his 2 posts above. There are plenty of products where you only "enter" the brand at a high level. Porsche is a good example: many people will only enter the brand at 911 and above and haven't any interest at all in a Boxster

 

[Deleted User YDKXO]

But the boats are very different aren't they? Bigger (for the same length), better finished, better equipped.

You're right in what you say about the prices but they haven't kept building the same sort of fifty footer (for instance) and flogged it for more and more money (ahead of inflation). They've improved the boats massively over the years in terms of what they offer.

No don't agree with that. I've said before on this forum that manufacturing efficiencies should have far outweighed any increase in specification over time. They have in many other manufacturing industries. Taking the car industry as an example, in 1996 I bought a BMW 528i for £28,000. 18yrs later, I can buy a similar car but with a much better specification and much better safety equipment for less than £40k and thats despite an overall detioration in relative exchange rates. New boat prices have probably risen by a factor of 3 over the same period. Why?
I also take issue with 'bigger' as well. Loa used to mean from the bow to the transom; nowadays it means from the pulpit to the very edge of an enormous bathing platform. Boats might be a bit taller these days but they're certainly not longer.
Sorry but IMHO some European manufacturers have lost touch with any concept of affordability

 

[rafiki_]

No don't agree with that. I've said before on this forum that manufacturing efficiencies should have far outweighed any increase in specification over time. They have in many other manufacturing industries. Taking the car industry as an example, in 1996 I bought a BMW 528i for £28,000. 18yrs later, I can buy a similar car but with a much better specification and much better safety equipment for less than £40k and thats despite an overall detioration in relative exchange rates. New boat prices have probably risen by a factor of 3 over the same period. Why?
I also take issue with 'bigger' as well. Loa used to mean from the bow to the transom; nowadays it means from the pulpit to the very edge of an enormous bathing platform. Boats might be a bit taller these days but they're certainly not longer.
Sorry but IMHO some European manufacturers have lost touch with any concept of affordability

Mike, I'm not sure you can compare the cost base in boat and car manufacturing like this. Yes, the price of the 5 series has not grown much over the years, and the cars offer more and better features. However, the feature improvements have come from electronics developments, which are costly to develop, but cheap to manufacture. BMW/Daimler etc biggest costs are in the powertrains. Modern diesels are relatively expensive. Meantime, over the past few years, there has been a huge investment in manufacturing techniques, which have taken huge cost out of the product, sometimes to the detriment of the business. Look at the previous generation E Class, where the electrical systems were a basket case.
Volumes for 5 Series/E Class etc are 100,000 plus per year. You cannot compare the economies of scale with boat building. Highly successful boats like the SC35 are less than 100 units per year.

If you compare boats with top end cars, then their prices too are going north. Bug Veyron, Lambo etc are getting more expensive rapidly.

If you consider the newish McLaren, it is selling 1000 units a year at circa £200,000. It is designed to live for 10 years, and be used simarlarly to a boat, say 100 hours a year. The cost to Macca will be circa £80K ish, s a reasonable mark-up if they sell to the dealer at £120k. What does an SC35 cost to build? Probably nearer the £120, and at 80 units a year, nothing like the return. How many Squad 78's does Fairline sell? A handfull. Cashflow nightmare though

Apologies for the ramble.

 

[ari]

If you compare boats with top end cars, then their prices too are going north. Bug Veyron, Lambo etc are getting more expensive rapidly.

If you consider the newish McLaren, it is selling 1000 units a year at circa £200,000. It is designed to live for 10 years, and be used simarlarly to a boat, say 100 hours a year. The cost to Macca will be circa £80K ish, s a reasonable mark-up if they sell to the dealer at £120k. What does an SC35 cost to build? Probably nearer the £120, and at 80 units a year, nothing like the return. How many Squad 78's does Fairline sell? A handfull. Cashflow nightmare though

Apologies for the ramble.

Yup, look at the "mid range" Ferrari 458. Wasn't that long ago you'd see V8 Ferraris around the £100K mark. Now they're £200K. The Porsche 911 has just jumped from a circa £60-£70K car to nearer a circa £90-£100K car too I believe.

Talking of Ferrari, does anyone think they should be making a £20K sportscar to help people enter and grow through the brand?

 

[vas]

I do wonder if brand loyalty is a tangible issue and serious argument as far as boats are concerned (I mean as far as hundreds of thousands are concerned)

I can be loyal to Ericsson/Sony-Ericsson and now plain Sony as far as my 400-600euro mobile phone is concerned, but I'm actually more loyal to Android as it stands.

I could possibly be loyal to Fiat for my car (especially after the ordeal with my shiiity BMW...) but I'll be mostly loyal to the design/inspiration/style/way Italians work, so I may buy an Alfa or Lancia...

I may be loyal to Phillips for AV/micros/whatever hardware but I may get a samsung after all if the quality of the display/sound plus design is right (or if I'm in a hurry...)

you get the point, I doubt many (OK jfm, henryf and possibly couple of more excluded) would need an awful lot of convincing to jump from one brand to another for the .5M + bracket.
Obviously I'm not counting favourable trade back price as brand loyalty!

V

 

[david_bagshaw]

Seems like it's time for some consolidation in the industry.
spite of a good reputation, fine products, and a band of loyal customers. Sometimes they just don't keep up with the changes in their industry and then can't match their peers/ the competition.

Cheers

Garold

is that what happened to Broom ?

 

[Deleted User YDKXO]

Yup, look at the "mid range" Ferrari 458. Wasn't that long ago you'd see V8 Ferraris around the £100K mark. Now they're £200K. The Porsche 911 has just jumped from a circa £60-£70K car to nearer a circa £90-£100K car too I believe.

Well thats not quite true. £70-80k will still get you into a brand new latest model 911 but agreed a 458 is nudging £200k which probably explains why Porsche will sell loads of 911s and Ferrari only a few 458s

 

[Deleted User YDKXO]

is that what happened to Broom ?

Yes, good point. Broom is a classic example of a company that made excellent products but failed to realise that it's target market was shrinking

 

[jfm]

Well thats not quite true. £70-80k will still get you into a brand new latest model 911 but agreed a 458 is nudging £200k which probably explains why Porsche will sell loads of 911s and Ferrari only a few 458s

Thing is that the market is tiny for £200k cars compared with £90k, and it's not al to do with the number that can afford it. There are loads of reasonably affluent folks who always buy a car in the £60-90k bracket, because it feels about right for a nice car and they can afford it. Whereas even very rich folk who could buy 10 x £200k cars without noticing it will not spend that because they feels it is daft. They dont love cars enough. So if there is one person able to write a car cheque for £200k for every 10 who can write a £100k car cheque, the buyer pool of £200k cars is much less than 10% of the pool for £100k cars.

Erm, I have no idea what his has to do with boats though

 

[Portofino]

Hi , over the past 27 years I have been through the Porsche range ,Starting with what I could afford 924 as I grew up so to speak - 968 clubsport 2x 911's then family Cayeene s . When the kidds go to Uni I can see myself in a Panamera .
I have had forays into BMW, Merc ans R Rover, but the Porsche product speaks for itself, It's as if there is Allways a modal brought out to suit me at the right time. Cayeene is the biggest seller and most profitable - that's worldwide .
Porsche bought Audi/VW a few years back for cash no bank involved .
So are their customers loyal? Or is it clever marketing .
Aston cygnet- its th do with some EU forward C02 emission Law ,to get the "average" down across the range . They manufactor it's who cares if they sell only one ,or none , it counts in this test. Porsche produce hybrids to meet the low average C0 2 .Its got nothing to do with saving the planet, that a co- incidence . It allows then to make large engined cars to sell them.
Ferrari , we are getting in a muddle here , they have a waiting list production is limited to around 8000. Units worldwide - they can keep raising the price until demand drops . I waited 4 years back in 2002 to take delivery of a new 360
The then entry level car.
They have been lucky in recent times insofar as any drop off in western markets has been taken up by the Chianese , now accounts for around a third of production 10 y ago zero.
BOAT,s therein lies the solution to Fairprinseeker and sealine( uk builders)
Build an entry range ( I,ll let you all decide how to define that)
Introduce this to new upand coming markets at a price that the market can stand ,
Then like Family owned Porsche bring the market on ,with new modals as it the ecomonic prosperity increases .
Sunseeker I understand have allready sold about a year and a half or build slots for the Portofino 40 ( entry) @ about delivering 1 per week .I think the the first few are about to come off the production line any time now Sub 400k fully speced inc Vat
They have 5 firm orders inc Eddie,s for the 155
Think of a Pyramid A layer of P 40,s at the base and a small no of 155 up top with the rest or the range in the middle , like Porsche .
Loyalty - I think it's stronger in boats than cars , ( not sure why)? So if that's correct then each builder need to have a into modal ( even as a loss leader ) to catch em young . If I were to change boats being Med based there is a modal in the SS range , in fact right up to 155 .
If fairline got the pyramid shape right and the emerging market issue correct they would not be laying off 85 people .

 

[Quest]

It seems to me that the likes of jeanneau and beneteau, who traditionally build small and entry level, are expanding their ranges into the mid range territory and are doing so with some success. Certainly the recent top end Prestige models and Flyer range have been very well regarded in the boating press. surely, this represents sound business planning, to spread themselves into other markets and broaden the footprint of the business.

Whilst I understand that bigger boats will mean bigger profits from those builds, Are those at the top end not taking a big risk in the longer term by ignoring what is going on beneath them?

 

[jfm]

Hi , over the past 27 years I have been through the Porsche range ,Starting with what I could afford 924 as I grew up so to speak - 968 clubsport 2x 911's then family Cayeene s . When the kidds go to Uni I can see myself in a Panamera .
I have had forays into BMW, Merc ans R Rover, but the Porsche product speaks for itself, It's as if there is Allways a modal brought out to suit me at the right time. Cayeene is the biggest seller and most profitable - that's worldwide .
Porsche bought Audi/VW a few years back for cash no bank involved .
So are their customers loyal? Or is it clever marketing ... .

Thing is, for every claimed marketing success there is an equal and opposite. Like people who would never buy a Porsche precisely becuase certain other people do buy them. Tis a complex thing all this brand image stuff.

Anyway, your statement "Porsche bought Audi/VW a few years back for cash no bank involved " is the funniest thing I've read in years and deserves a special forum prize of some sort for its lack of connection with the actual facts.

The detail is hugely complex but Porsche played what looked like a master stroke a couple of yrs ago in buying options over 30-odd% of VW and removing the supply of liquidity to hedgefunds who had sold short. Porsche made billions out of this clever but sneaky trade and were that year a pure hedgefund with an irrevant sideline in making cars for their fans. They built their actual VW stake to 50% using a pile of bank debt which currently is still >€10bn, which is why your statement about no banks being involved is so funny. Then it all went sour: they burnt that windfall financial profit in a couple of years of bad sales after Lehmans weekend, and surprise surprise multiple billions of lawsuits arrived following their VW options trade which while arguably legal in Germany is widely regarded as not cricket and ciminally illegal in most other markets. Porsche now don't have a spare penny to build their VW stake beyond its current non-controlling 50% level and meanwhile VW hold about 50% plus another 20% options of Porsche the carmaker (which is valauble) as opposed to Porsche holding company that owns the 50% of VW and is saddled with the debt and the lawsuit exposure

All complex stuff and can only happen in German but the picture you paint of Porsche as a corporate success buying VW without debt is just plain untrue. Anyone buying Porsche shares today is buying a small slice of carmaker that will soon be VW controlled and a large slice of bet on the outcome of the litigation, all leveraged by €10bn of bank debt. A nice little financial cocktail with a rahter modest connection with cars!

 

[z1ppy]

Thing is, for every claimed marketing success there is an equal and opposite. Like people who would never buy a Porsche precisely becuase certain other people do buy them. Tis a complex thing all this brand image stuff.

Anyway, your statement "Porsche bought Audi/VW a few years back for cash no bank involved " is the funniest thing I've read in years and deserves a special forum prize of some sort for it's lack of connection with any actual facts.

The detail is hugely complex but Porsche played what looked like a master stroke a couple of yrs ago in buying options over 30-odd% of VW and removing the supply of liquidity to hedgefunds who had sold short. Porsche made billions out of this clever but sneaky trade and were that year a pure hedgefund with an irrevant sideline in making cars for their fans. They built their actual VW stake to 50% using a pile of bank debt which currently is still >€10bn, which is why your statement about no banks being involved is so funny. Then it all went sour: they burnt that windfall financial profit in a couple of years of bad sales after Lehmans weekend, and surprise surprise multiple billions of lawsuits arrived following their VW options trade which while arguably legal in Germany is widely regarded as not cricket and ciminally illegal in most other markets. Porsche now don't have a spare penny to build their VW stake beyond its current non-controlling 50% level and meanwhile VW hold about 50% plus another 20% options of Porsche the carmaker (which is valauble) as opposed to Porsche holding company that owns the 50% of VW and is saddled with the debt and the lawsuit exposure

All complex stuff and can only happen in German but the picture you paint of Porsche as a corporate success buying VW without debt is just plain untrue. Anyone buying Porsche shares today is buying a small slice of carmaker that will soon be VW controlled and a large slice of bet on the outcome of the litigation, all leveraged by €10bn of bank debt. A nice little financial cocktail with a rahter modest connection with cars!

well i didn't know that!! amazing the things you can learn no here!!

Think i will hold off ordering my new 911 turbo then!

 

[jfm]

It seems to me that the likes of jeanneau and beneteau, who traditionally build small and entry level, are expanding their ranges into the mid range territory and are doing so with some success. Certainly the recent top end Prestige models and Flyer range have been very well regarded in the boating press. surely, this represents sound business planning, to spread themselves into other markets and broaden the footprint of the business.

They have, incidentally, been doing that for years. It's not a new thing. BenJen group has had CNB for years, but kept quiet about the fact it is one of their companies, rather as Bentley don't shout about the fact they're owned by VW etc

 

[ari]

The bit about the Aston Martin Cygnet being "to do with some emissions law" is, whilst a commonly held belief/justification, completely untrue also.

Aston thought they could make a fast buck re-trimming and re-badging 1 litre Toyotas and flogging them for the price of a Porsche Boxster. They foolishly had the commonly held belief that "rich people will buy anything", when actually, rich people generally get that way by not doing so.

 

[Quest]

They have, incidentally, been doing that for years. It's not a new thing. BenJen group has had CNB for years, but kept quiet about the fact it is one of their companies, rather as Bentley don't shout about the fact they're owned by VW etc

Excuse my ignorance, CNB?

 

[AdeOlly]

Excuse my ignorance, CNB?

I think he means these guys

 

[grumpy_o_g]

I can't see that you can compare even a fairly high end car with a high end boat. I don't know how many 5 series or A6's are made each year but I bet it's a fair few and, with the exception of the M5 and RS6, they're turned out by highly efficient factories with a fortune invested in the machinery. Process and QC are paramount but the labour has been reduced to a minimum, parts are shared across thousands of models a year with the price driven right down to clever negotiating from a position of strength, and, because of JIT, inventory is kept to a minimum. Compare that to say the Targa's below 60' and we're looking at maybe managing to use a few tricks to make things more efficient but basically it's nearly all skilled or semi-skilled labour and specialised parts. Even things like door handles tend to be produced in very small quantities and there has to be room for some customisation even at this level. The customer won't just tick the air-con box for example; he might take the default or he might even specify a particular genset and air-con. I'd have thought a huge amount of the reason cars have got comparatively cheaper whilst boats have got more expensive is down to a simple inability to utilise modern mass product manufacturing techniques.

 

[jfm]

I think he means these guys

Yup, sorry, yes I did. CNB is now a very serious super yacht builder. Their Hamilton 2 (for Charles Dunstone, Carphone Warehouse) is a gorgeous and successful maxi racer, and Chrisco is very special and made even Huisman take notice (I've had the pleasure of a tour on board with the CNB CEO, last year, and it really is a thing of beauty). They also make the Bordeaux 60 semi custom, which Magnum of this parish has the nicest one of. Anyway, it's part of Beneteau and has been for years

 

[Quest]

I think he means these guys

Thanks