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Deleted User YDKXO
Guest
Ah yes sorry I forgot. We're changing our economic model
Sales Order book
- Thread starter Powersalt
- Start date
Ah yes sorry I forgot. We're changing our economic model
Powersalt
Well-Known Member
So why cant the big 3 build boats and make money???, they control their overheads, they control the selling price and they should be as good as any overseas yard.
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Deleted User YDKXO
Guest
One of the main reasons I have always bought secondhand
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Deleted User YDKXO
Guest
They don't, the market controls the price and the big 3 builders don't build boats that command enough of a premium price to give them an acceptable profit. But you could say that about many manufacturers in many different industries. As my old boss used to say, manufacturing is a mug's game
Powersalt
Well-Known Member
Mike, I too am in manufacturing and yes its hard work says I as I look across at traders and web marketers who have it relatively easy.
But my business makes money in a fiercely competitive arena because we keep it very lean, buy wise and sell to make money.
Are we then saying boat manufacture in the uk is not as efficient as the rest of Europe?
But my business makes money in a fiercely competitive arena because we keep it very lean, buy wise and sell to make money.
Are we then saying boat manufacture in the uk is not as efficient as the rest of Europe?
stelican
Well-Known Member
Yes
Certain builders Jeanneau Prestige, Bavaria Cranchi would appear to spend less man hours per boat albeit without such intricate detailing as our big three
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Deleted User YDKXO
Guest
No we're saying its a lousy industry to be in generally! Mature industry with flatlining sales. Not big enough for major economies of scale or significant R & D spend. Hugely working capital intensive. Very much a discretionary purchase and therefore highly subject to economic fluctuations. Far too many competitors with lack of market consolidation. Oh yes and no future unless somebody invents a propulsion system with vastly improved fuel consumption and emissions
TwoHooter
Well-Known Member
Is that how it works? If so, that's awful. In the case of a loss-making boatbuilder it almost sounds like a Ponzi scheme. In our little business all pre-paid deposits were held in a separate bank account and released to the main account after delivery. If we had gone bust the deposits would technically have gone into the same pot as everything else and the people who had paid them would have been unsecured creditors but in practice if we had seen the bust coming (which we would) the deposits would have been repaid before we pulled the plug. Why can't boatbuilders put deposits and stage payments in escrow? Obviously that would put prices up a bit because it would increase the amount of borrowed money being used to pay for building the boats but it would remove risk from the buyer. I'm amazed the buyers don't demand this because they must be savvy people to be in the game in the first place. Surely they must read the accounts of the boatbuilder before they sign the contract?
Bouba
Well-Known Member
The easiest way for them to increase sales is to get into the marina business. Down here in the SoF I think you could double sales if you doubled places. Buying a big boat is only your first problem, parking is the biggy
NGM
Well-Known Member
I think on the whole your stage payments go towards your boat. The first significant (30%) payment is due when engines are ordered, along with other components and cabinetry is started. I see this period as your likely main risk. Once the boat has started to be assembled you are reasonably safe imo; because whatever has caused the company failure it's usually in the best interest of everyone to get part built boats finished and full payment received. This has happened to me in the past.
So in reality your risk window is relatively small (6-8 weeks) whereby you would have paid 30% but have nothing that is economically viable for the firm to finish.
Boat2016
Well-Known Member
Is it something to do with the amount paid for the businesses in the first place ? After all the investors want a return on their investment, I seem to remember the big 3 have all had new owners at some point and it seems more was paid than what they can earn so you will only head one way.
rafiki_
Well-Known Member
I don't think it is the ownership taking cash out, as this isn't the case with Sun/Prin/Fair. There is no cash to take a dividend. All three were very successful until the GFC in 2007/8. Orders crashed, leaving all 3 with overheads they couldn't afford. None of the businesses were optimised for efficiency, they didn't need to be. When the crash came, cash leaked so quickly there was insufficient to invest in modern production facilities or processes, insufficient investment in new product, and over supply. The rest is history.
Boat2016
Well-Known Member
I wasn't referring to the owners taking money out it was more a case of paying back the loan as I would expect that to be a big overhead that they could do without
Powersalt
Well-Known Member
What about this risk window as a forumite said the first few weeks and 30% deposit?
rafiki_
Well-Known Member
Don't think that has factored. VC's tend to want a return by increasing the asset value and selling off in 3-5 years.
MAFWeiss
Well-Known Member
If you buy a Prestige, it's just a 10% deposit and the 90% balance only due when the boat is completed.
Nick_H
Well-Known Member
As a casual observer, that doesn't appear to be the case. There seems to be a never ending flow of new models from Princess and Sunseeker, at least on a par with the mainsteam French and Italian builders?
I think there's evidence that things are looking up for the UK builders. Competitive exchange rates, full order books, and sales back at pre-2008 levels, mean higher sales and less discounting, which is a bottom line double whammy for the builders. Sunseeker reported that they went back into profit at the end of last year, and that's a quick turnaround from heavier losses than Princess reported.
PowerYachtBlog
Well-Known Member
Yes that is correct. Though remains to be seen how many of these are actual complete new models, then make up improvements on the lower deck a new flybridge, new windows etc.
For example the new Princess V40 is just a make up improvement of the V39 after four years of production for the later. This goes on and on, on bigger models across various builders.
Some make up changes are very evident (model will look the same to the untrained observer), others a more difficult to detect because the builder will do less subtle changes.
The Sunseeker 66 Manhattan for example is a complete new boat, not based on the 65 it will should replace.
TwoHooter
Well-Known Member
That strikes me as much more sensible from the buyer's perspective but presumably the boatbuilder has to do due diligence on the buyer to avoid the risk that the buyer doesn't have the money when the 90% comes due.
My only experience of buying bespoke big-ticket items is building houses and commissioning expensive machinery. In both cases there is a large initial deposit to pay for materials and then stage payments which have to be authorised by an independent third party (architect usually in the case of a building, consulting engineer if the machinery job is large enough). Provided that all payments are made as they come due the buyer has ownership of both the design and the part finished job and if the builder fails it is possible to get another builder to finish the job. Despite the fact that big motorboats are more expensive than anything I have ever commissioned the whole process seems much more casual.
Portofino
Well-Known Member
The depo /balance risk or stage payment for part complete is what you have to accept in each individual case be it boat ,property , or even car .
If you want NEW built to your spec .
Otherwise buy a ready made -done one -all of the above ,but somebody else has specced it .
I once many years ago placed 10% depo for a Ferrari ,just to get on the then 3 YEAR wait for a Bulid slot .A 6 figure mrrp
How ever the law of supply and demand plays a part .At the time the UK dealers were getting ONE car /month each .
The W/L was 36 months for a build slot
There's a twist here the factory enforced then strict mrrp on new cars ,so the dealer has to let you have it at the mrrp.
If you wanted you could and were pested to sell your build slot ,place on the waiting list for a premium .
Then on del having paid mrrp re -pested to sell it with 10 miles on back to the dealer for a premium without actually seeing the car - who would then be free of the factory pricing regime and mark it up by 25 % -as technically it's now used car ! - stick it in the showroom and be able to supply ,meet the demand of a second waiting list of people who want one NOW and are not repaired to pay a depo and wait .
But as I say the driving dynamic is supply does did not meet demand
So with Jeanneau if they are happy with only 10 % ,then they must be confidant ,like Ferrari dealers of finding s home if the buyer cocks off or jiggle the build slots .
And importantly be cash rich ,not worrying about cash flow .
If you want NEW built to your spec .
Otherwise buy a ready made -done one -all of the above ,but somebody else has specced it .
I once many years ago placed 10% depo for a Ferrari ,just to get on the then 3 YEAR wait for a Bulid slot .A 6 figure mrrp
How ever the law of supply and demand plays a part .At the time the UK dealers were getting ONE car /month each .
The W/L was 36 months for a build slot
There's a twist here the factory enforced then strict mrrp on new cars ,so the dealer has to let you have it at the mrrp.
If you wanted you could and were pested to sell your build slot ,place on the waiting list for a premium .
Then on del having paid mrrp re -pested to sell it with 10 miles on back to the dealer for a premium without actually seeing the car - who would then be free of the factory pricing regime and mark it up by 25 % -as technically it's now used car ! - stick it in the showroom and be able to supply ,meet the demand of a second waiting list of people who want one NOW and are not repaired to pay a depo and wait .
But as I say the driving dynamic is supply does did not meet demand
So with Jeanneau if they are happy with only 10 % ,then they must be confidant ,like Ferrari dealers of finding s home if the buyer cocks off or jiggle the build slots .
And importantly be cash rich ,not worrying about cash flow .
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