Observations on boat prices

[Daydream believer]

In this month's YM there is an interesting article about the final demise of Westerly in 2000 and the extraction of a part finished 33 Ocean by its buyer. Much has been written about the reasons for the collapse of the British boat building industry around that time and the article is a useful reminder of what buyers were facing then if they were buying new.

The owner had ordered the new boat at the boat show for a price of £100,000. I bought a new boat that year as well, and as I have just sold it, I was clearing out the original paperwork so refreshed my memory of prices at the time. My first choice was a Bavaria 34 which was then priced at around £78k in the UK for a fully commissioned, good spec example, but there was a long waiting list. So, instead I bought a 37 which to a similar spec was around £85k. Both of course substantially cheaper and probably better specced than the Westerly. As my boat was for use in the Med for charter the final price, delivered and coded was the equivalent of £97k including VAT - the coding and charter spec added over £13k to the basic price.

Fast forward to today, as many know I have just bought a new Bavaria 33. It has a far better spec than the earlier boat, particularly electronics, autopilot and a bow thruster and the price was approx £100k. Inflation since 2000 has been averaging 2.9% pa so an inflation adjusted price for a 34 from 2000 would be £117k, so in real terms the price of a similar boat has fallen by nearly 20%.

This illustrates the power of mass production. In 2000 a British boat with similar materials (both by weight and type) was 20% more than a mass produced boat - but the builder still could not make money. Since then further advances in production technology have reduced costs by a further 20% or so in real terms, and improved quality.

An argument often made for buying a "quality" boat - ie not mass produced is that they hold their value better. A quick check on the current asking prices for these late 1990s early 2000s boats does not bear this out. Asking prices are roughly 50% of the list prices when new - so Bav 34s are around £40k and the few Westerly 33s that have come on the market are asking £50k.

Whilst not disputing your figures-- have you taken in to account the current exchange rate for €'s which may be distorting the current price of a new boat from the EU

 

[Daydream believer]

But on a very serious note: the UK is NOT doing enough to support its base industries to remain competitive in terms of productivity which will in time drive real wages Some of the money being paid out by corporates should also be reinvested to this end. Not doing so won't have a good ending.

Why do you make that claim?
Apart from restrictive EU rules which it might be suggested are not entirely the government's fault
I have never found the government to be a restriction on any of my companies.
We have, at present, an expanding economy, cheap finance ( provided one can put up a decent business case) & plenty of opportunity, with a free market and excellent access to europe. true these things change but only in sinque with the world markets so it is the same for all.
What we do have - and i have found this as a consultant since partly retiring- is absolutely useless management abilities. Some of the things i have seen are unbelievable examples of shear incompetence
If the government is to blame it can be to allow our education system & professional bodies to dumb down training so much that idiots get qualifications
Westerley failed due to poor management ----no other reason
Just as some of our other poorly managed non professional outfits in the sailing sector have

 

[dom]

Why do you make that claim?
Apart from restrictive EU rules which it might be suggested are not entirely the government's fault
I have never found the government to be a restriction on any of my companies.
We have, at present, an expanding economy, cheap finance ( provided one can put up a decent business case) & plenty of opportunity, with a free market and excellent access to europe. true these things change but only in sinque with the world markets so it is the same for all.
What we do have - and i have found this as a consultant since partly retiring- is absolutely useless management abilities. Some of the things i have seen are unbelievable examples of shear incompetence
If the government is to blame it can be to allow our education system & professional bodies to dumb down training so much that idiots get qualifications
Westerley failed due to poor management ----no other reason
Just as some of our other poorly managed non professional outfits in the sailing sector have

I broadly agree with your sentiments, with the caveat that anecdotal evidence is just that. However, if one looks in Germany, and to a lesser extent France, one finds a complex tapestry which interweaves targeted academic grants, export support, subsidised funding, technical support (DE Trade & Invest, Fraunhofer), etc, into the fabric of German industry. In addition During the 2008-11 downturn the German Kurzarbeit programme provided state subsidies for workers to stay in their jobs. It all helps, quite a lot in fact and produces many secure and well paid jobs.

I also agree with you comments re UK managers, but would very much include some of the cost-cutting, money grabby types in this category. Businesses are essentially long term affairs and must be seen and managed so or they tend to disappear.

 

[Tranona]

Whilst not disputing your figures-- have you taken in to account the current exchange rate for €'s which may be distorting the current price of a new boat from the EU

Just to clarify and to answer some of dom's points. I used the Bank of England inflator to adjust prices. This shows an increase in prices of just over 50% from 2000 2014.

With regard to exchange rates, most current prices (and the ones I used) are based on 1.2 euros to the £. I know this from my research into buying my new boat. By the time my boat was due for final payment the rate was 1.35 and part of this gain was reflected in the final price I negotiated. Expect to see prices for next year change very little or go down either in lower list prices or increased incentives to reflect the strong £.

Going back to 2000/1, this was before the introduction of the Euro, and the £ was then strong against the FF and DM. This, in part explains some of the price advantage over UK builders at the time. The exchange rate I got for most of my payment was 3.23DM to the £ when the UK prices were based on 3.05 which further reduced my sterling spend (which I promptly spent on extra instruments, one of the few bits of kit that turned out to be unsatisfactory!).

The fluctuations in exchange rates do not always feed quickly into changing prices for several reasons. First the builder tends to fix prices for a year at a time, second dealers often limit their risk by buying forward and third some of the material cost is purchased in £s. Add to that, only around 80% of the final price of the boat in the UK is actually denominated in euros (the rest is UK costs, dealer margin commissioning and locally fitted extras). So a movement of 15% in the exchange rate as in the last 6 months might only result in a fall in the £sterling price of 8 or 9%.

None of this alters the basic point I was trying to make, and that is the steady decline in real costs of mass produced boats to the advantage of new boat buyers.

 

[JumbleDuck]

None of this alters the basic point I was trying to make, and that is the steady decline in real costs of mass produced boats to the advantage of new boat buyers.

I think you could well have written

None of this alters the basic point I was trying to make, and that is the steady decline in real costs of mass produced anything to the advantage of new anything buyers.

A side effect of this is that the price of non-mass produced stuff appears to shoot up, particularly since the mass produced stuff keeps the RPI down.

 

[Daydream believer]

I broadly agree with your sentiments, with the caveat that anecdotal evidence is just that. However, if one looks in Germany, and to a lesser extent France, one finds a complex tapestry which interweaves targeted academic grants, export support, subsidised funding, technical support (DE Trade & Invest, Fraunhofer), etc, into the fabric of German industry. In addition During the 2008-11 downturn the German Kurzarbeit programme provided state subsidies for workers to stay in their jobs. It all helps, quite a lot in fact and produces many secure and well paid jobs.

I also agree with you comments re UK managers, but would very much include some of the cost-cutting, money grabby types in this category. Businesses are essentially long term affairs and must be seen and managed so or they tend to disappear.

I think you might find that in the UK there are lots of subsidies and grants that do not necessarily come direct from the government but never the less are available to industry. By co incidence i have just been reading an article in which Skansca has received a £500,000 uk inovation grant to introduce supply chain tagging in the building industry
I think the perception about " money grabbing" types is really media led. A few do have what in some instances seem high salaries or bonus however, the percentage of the overall is really quite insignificant. What it does do is attract top management to the uk because we may e perceived as a country that really does reward our top management
I do accept that our "free market" does lead to speculation & selling off of assets etc where in other countries it has been said they tend to look at the long term. I do not think i have noticed any indication of that in the marine industry , unless by marine industry you include wind farm support & the like. If you do then i suspect our marine industry has actually done very well
Venture capatalists operate the world over. Does one really believe that the company that took over huge loss making Hanse will not sell again once they have recovered their investment & eeked out as much as they can.
One has to remember that Beneteau went onto the hands of a large investment co & once Jeneau hit the wall they went with them to the same company i believe. The only difference between uk and eu is that they managed to make the foreign firms look more attractive with fairly good management. Something i suspect was lacking at, say, northshore & westerly

Apologies to the op for thread drift from what was an interesting thread

 

[dom]

One has to remember that Beneteau went onto the hands of a large investment co & once Jeneau hit the wall they went with them to the same company i believe. The only difference between uk and eu is that they managed to make the foreign firms look more attractive with fairly good management. Something i suspect was lacking at, say, northshore & westerly

Don't agree with your post re UK business support but probably shouldn't overly drift this thread. What you say about Beneteau is however news to me. If I remember correctly at least up until a couple of years ago the family holding company owned a little less than 55% of the share capital, with remaining 45% listed on the French stock exchange. Happy to be corrected if family have recently sold up

 

[pvb]

Fast forward to today, as many know I have just bought a new Bavaria 33. It has a far better spec than the earlier boat, particularly electronics, autopilot and a bow thruster and the price was approx £100k. Inflation since 2000 has been averaging 2.9% pa so an inflation adjusted price for a 34 from 2000 would be £117k, so in real terms the price of a similar boat has fallen by nearly 20%.

One thing you haven't considered is that most AWBs are priced in euros. In 2000, the exchange rate was about 1.25, whereas today it's about 1.41 - so your £100K today buys a lot more euros than it would have in 2000.

Regardless, though, the fact that Ben/Jen/Bav have embraced automated production with a fervour is no doubt instrumental in their ability to offer outstanding value. I've had my Bavaria Cruiser 37 for a year now, and have been hugely impressed (and I previously owned a Hallberg-Rassy). The Bavaria's fit and finish is to automotive standards. I continue to marvel at the skill which went in to planning the mouldings. The electronics all work seemlessly. Nothing rattles or creaks or leaks. It's a very good product.

Years ago, I bought 3 new Westerly boats, and visited the factory to see the first two being built. It was a scene of barely controlled chaos. Even if they'd had the money to invest, I can't imagine the management would have understood the concept of efficiency.

Incidentally, reminiscing about boat pricing, in 1978 we bought a new 31ft Westerly Pentland ketch for £24K. At the same time, we moved house to a new-build 4 bedroom detached house in Essex for £23K. Yes, I do have an understanding wife!

 

[Strolls]

I continue to marvel at the skill which went in to planning the mouldings.

Is there any chance you could expand on this a bit, please? I'm very curious what exactly you mean.

 

[pvb]

Is there any chance you could expand on this a bit, please? I'm very curious what exactly you mean.

General attention to detail in designing the overall mouldings. As an example, the whole coachroof is lined with GRP mouldings which are beautifully finished, with matt and gloss surfaces, and include provision for conduits for electrics and electronics. It's a world away from the stuck-on vinyl linings of yesteryear. The one-piece moulded heads/shower compartment is also very clever.

 

[Strolls]

Thanks.

 

[Tranona]

Is there any chance you could expand on this a bit, please? I'm very curious what exactly you mean.

Agree with pvb. I shall be picking my new Bavaria up tomorrow. One of the reasons for choosing it was the superior fit and finish compared with its competitors - not that they are bad and light years ahead of the more labour intensive boats of 20 years ago. Suggest you go on the bavaria Yachtbau site and look at their Youtube tour of the factory. Jeanneau and Beneteau have much the same set up.

 

[Strolls]

I wasn't questioning his general sentiments - I was just curious what specifically about the mouldings impressed him.

 

[Daydream believer]

Agree with pvb. I shall be picking my new Bavaria up tomorrow. One of the reasons for choosing it was the superior fit and finish compared with its competitors - not that they are bad and light years ahead of the more labour intensive boats of 20 years ago. Suggest you go on the bavaria Yachtbau site and look at their Youtube tour of the factory. Jeanneau and Beneteau have much the same set up.

Got to admit , when looking for a slightly larger boat at the LIBS a couple of years ago i thought the Bav finish, layout etc was far better than the Hanse. Just could not persuade myself to own a Bavaria though

Cannot help thinking that it is a bit like buying a Skoda . I offered to buy my daughter a new Skoda last year & she turned her nose up at it --because Skoda ruined her street cred. Daft thing is it is a good car. Same sort of thing goes with the Bavaria

 

[Way]

They look really nice Tranona. looking at the figures (and referring to one of my other posts) I would say 5,200kg certainly isn't light. And 1,300kg slung right down at the bottom of a long Fin seems like a decent amount of ballast. My perception of and attitude towards newer boats has changed over the years...I think I'm less prejudiced. Are you happy with both boats, and have you been out in blows and felt secure?

Congrats on the purchase

Agree with pvb. I shall be picking my new Bavaria up tomorrow. One of the reasons for choosing it was the superior fit and finish compared with its competitors - not that they are bad and light years ahead of the more labour intensive boats of 20 years ago. Suggest you go on the bavaria Yachtbau site and look at their Youtube tour of the factory. Jeanneau and Beneteau have much the same set up.

 

[doug748]

General attention to detail in designing the overall mouldings. As an example, the whole coachroof is lined with GRP mouldings which are beautifully finished, with matt and gloss surfaces, and include provision for conduits for electrics and electronics. It's a world away from the stuck-on vinyl linings of yesteryear. The one-piece moulded heads/shower compartment is also very clever.

Very ingenious.

It all comes down to bottom line I guess. It would be grand if instead of trying to make cheaper boats each manufacturer had a shot at making one or two better ones. Just one model in each range, maybe.

 

[davidej]

I broadly agree with your sentiments, with the caveat that anecdotal evidence is just that. However, if one looks in Germany, and to a lesser extent France, one finds a complex tapestry which interweaves targeted academic grants, export support, subsidised funding, technical support (DE Trade & Invest, Fraunhofer), etc, into the fabric of German industry. In addition During the 2008-11 downturn the German Kurzarbeit programme provided state subsidies for workers to stay in their jobs. It all helps, quite a lot in fact and produces many secure and well paid jobs.

I also agree with you comments re UK OKmanagers, but would very much include some of the cost-cutting, money grabby types in this category. Businesses are essentially long term affairs and must be seen and managed so or they tend to disappear.

I would not disagree with any of this. But having just been in Brittany, I realise what a huge home market the French manufacturers had at a critical moment when grp moved from a man with a bucket of resin to a properly engineered product.

 

[Tranona]

They look really nice Tranona. looking at the figures (and referring to one of my other posts) I would say 5,200kg certainly isn't light. And 1,300kg slung right down at the bottom of a long Fin seems like a decent amount of ballast. My perception of and attitude towards newer boats has changed over the years...I think I'm less prejudiced. Are you happy with both boats, and have you been out in blows and felt secure?

Congrats on the purchase

Actually just got all the detailed paperwork for the boat and the brochure figures actually understate the design displacement using the ISO standard for design calculations. "Light craft mass" for the shallow keel my boat has is 5737kg, actually 200 kg more than the deep fin. Presumably the extra 200kgs is in the keel to keep the stability the same. This gives a ballast ratio of 33% which is higher than many of its competitors. Perhaps explains in part the stiffness I reported in the post on the hand over. Have been advised that it will carry full sail in up to 20 knots and was certainly very comfortable in the 15 knots we had at times yesterday.

Interesting to compare with the Westerly that started this thread which has a lower displacement at at 5000kg and slightly higher ballast at 2020kg.

 

[Tranona]

Very ingenious.

It all comes down to bottom line I guess. It would be grand if instead of trying to make cheaper boats each manufacturer had a shot at making one or two better ones. Just one model in each range, maybe.

Perhaps you could define what you mean by "better"?

 

[Daydream believer]

Interesting that some have suggested that we in the uk do not have the economies of scale to compete.
It has just occurred to me that Colvic was the largest GRP moulders in Europe at one time & that companies like Tyler were nearly as big. Westerly and Sadler must have been up there as well
But even the resin makers such as Beetle and Scott Bader do not seem to have survived