What is the Fairline situation?

BartW said:
Raf, you're probably right about location, but I've alway's been intrigued how we boatowners do our "armshair management " (me included)
while there are some clever and specialised Guy's paid to do that ;-)

last winter I visited the Monte Carlo Yacht factory in Monfalcone, and the MD mr F.i. gave us a tour there,
I was abosolutely inpressed with there new and modern approach to MY building right in the segment where Fairline is,
never ever have seen a similar thing here on this forum,
and I'm convinced that MCY is probably the biggest growing and most proffitabel company in this segment and in this challenging economic climate (stand to be corrected)
and that is what should happen IMO, thinking out of the box, and consider MY building from a completely different approach,

I prepared a thread at that time a report after my visit, but I didn't post it because I dind't have pics (where not allowed to make them)
might find the tekst on my computer if someone 's interested.
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Bart, there are some armchair observers on this forum who know as much if not more than the "professionals". I do not include myself, but am regularly amazed at the quality of info shared on this site. I'm intrigued to hear about your MCY experience, and a thread would be good please?
 
rbcoomer said:
This seems to come up regularly, but I don't get that argument. If all the cars on the road were Range Rovers and Landcruisers because all the makers of smaller vehicles couldn't make money then I could believe it, but surely there will always be a bigger market for <78 than >78? On that basis, they simply need to be much better in the existing markets than the other two to maximise their share. They're all above my budget, but from my own impressions at SIBS etc, they do - the quality and finish stand up very well to the other two.

Many luxury car makers went through the phase where they thought they must offer an SUV, but Ferrari didn't and are still here! It sometimes seems that the big corporates think they have to offer something for every segment of a market just to please investors, but in reality success often comes from simply doing things better rather than bigger :)
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"don,t get the argument "
Here it is on a plate -----
Differences are based on need and want

1- People need cars -( westernised + Europeans )

2- People do not need boats or other lux none essential items -( I would put a Ferrari in this category too even if it looks like a car ) -but may " want " one
Marketing , manufacturing, and buying dynamics are totally different .

With boats and ferraris there is more profit in the more expensive modals .
Ferrari limit production to les than 6000 units /year .
Boats -with a given floor space - raw materials ,workforce and a few ,only a few customers you are better knocking up a bigger one over lots of small ones if you can find or choose the punters ,even if it means less units .
 
Thanks both :-) I do get the differences and was reluctant to use the motor industry as a comparison, but knew of Paul's interests :)

I guess I was bemused in part by the o/p's comment/suggestion that the succession of CEO's meant they were in some way 'in trouble'. I probably didn't make the argument very well, but it is perfectly possible to produce a quality product for a limited market and make money. Apple can sell a $40 product for $400 so there must be some middle ground in the marketing game! Someone has to be a leader in the <78 sector in the UK and I don't personally believe the fact that Fairline can't produce bigger vessels should preclude them from that role. IMHO Sunseeker and Princess have stronger 'brand' image, but there was a time when Microsoft had a stronger brand than Apple too... I'd invest in current product, brand and marketing to grow share before thinking bigger!

Is the succession of CEO's due to a similar dilemma perhaps? The common view seems to be that Fairline are too constrained by the location, but as I understand it, to make bigger vessels Fairline would have to move or expand by building extra facilities? This would require vast investment and if margins on the existing range are so limited then this would surely transform a profitable and viable business into a mortgage/loan heavy one? Investors usually want returns quite quickly and an expansion route would seem a high-risk, slow return route to me?
 
rafiki_ said:
However Fairline can only look on as SS and Princess build bigger and higher margin products, as they are land locked.
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If you refuse to think outside the box; then yes..... nothing to do! But why not think outside the box? MCY was mentioned, owned by Beneteau, named after a part of a micro-nation and built in Italy. What about some cross-border thinking? Who said a Fairline by necessity has to be built in the UK? Fairline could join forces with other builders to produce bigger boats almost anywhere.... if only the desired level of quality can be assured.

Which reminds me of Delta Power Boats. A small outfit allegedly building 25-30 boats per year.... spread on no less than 8 models ranging from 26' to 88'. Considered a Swedish premium builder - and prices are thereafter. But hold on a sec.... all boats are built in Delta's own state of the art facility in Estonia..... not in Sweden. And it doesn't seem to harm Delta's reputation.

Delta's facility is capable of producing boats up to 100' and their website strongly indicates it might not stop there (in Swedish). I wager Delta would be interested in utilizing their advanced production facility a bit more if they received an inquiry from a premium brand. Why not 80' and 100' carbon hulled Fairlines built in Estonia? Sunseeker and Princess could soon enough have some new worries
 
Hugin said:
If you refuse to think outside the box; then yes..... nothing to do! But why not think outside the box? MCY was mentioned, owned by Beneteau, named after a part of a micro-nation and built in Italy. What about some cross-border thinking? Who said a Fairline by necessity has to be built in the UK? Fairline could join forces with other builders to produce bigger boats almost anywhere.... if only the desired level of quality can be assured.

Which reminds me of Delta Power Boats. A small outfit allegedly building 25-30 boats per year.... spread on no less than 8 models ranging from 26' to 88'. Considered a Swedish premium builder - and prices are thereafter. But hold on a sec.... all boats are built in Delta's own state of the art facility in Estonia..... not in Sweden. And it doesn't seem to harm Delta's reputation.

Delta's facility is capable of producing boats up to 100' and their website strongly indicates it might not stop there (in Swedish). I wager Delta would be interested in utilizing their advanced production facility a bit more if they received an inquiry from a premium brand. Why not 80' and 100' carbon hulled Fairlines built in Estonia? Sunseeker and Princess could soon enough have some new worries
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Yes, I don't disagree with this option. Pearl build boats up to 60' at their Stratford HQ. The hulls for the 65 & 75 yachts are moulded overseas, then brought to the south coast for assembly. No reason F/line couldn't do the same.
 
rafiki_ said:
Big is where the best margins are. Fairlines fixed costs are probably too high to make small boats at a sensible margin.
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Small boats is where Sealine, Sunseeker, Fairline and Princess all started off and made the money that got them where they are now, if they could make money on smaller boats 25 years ago why should it be so difficult to do now?
 
rafiki_ said:
Big is where the best margins are. Fairlines fixed costs are probably too high to make small boats at a sensible margin.
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Small boats is where Sealine, Sunseeker, Fairline and Princess all started off and made the money that got them where they are now, if they could make money on smaller boats 25 years ago why should it be so difficult to do now?
 
So there is a market for small boats, but not at the price that can make a decent profit for the manufacturer ?

Isn't the reason money can't be made from small cars because to many are being made, thus driving the price down ? Not the situation in the boat market.


Martin
 
aquapower said:
Small boats is where Sealine, Sunseeker, Fairline and Princess all started off and made the money that got them where they are now, if they could make money on smaller boats 25 years ago why should it be so difficult to do now?
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Yes, but when they started, there was limited competition. Now the small boat market is mainly supplied by US boats and Ribs. When they started, these companies had little or no fixed costs, now they have massive overheads, facilities, equipment, aftersales and people. In their early days, they all started as 1 or 2 men bands. The Americans have a much bigger market base for small boats, with all the lakes in the US, so have the economies of scale, but even these have been struggling over the last 10 or so years, and several have gone bust. This always opens up the market for new small entrants. Look how well Williams have done. They are very clear on their sector, produce a premium product, and ensure they fit well with the motor yacht builders, who therefore do much of their marketing for them.
 
BartW said:
last winter I visited the Monte Carlo Yacht factory in Monfalcone, and the MD mr F.i. gave us a tour there,
I was abosolutely inpressed with there new and modern approach to MY building right in the segment where Fairline is,
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Agree 100%. It was a masterstroke to locate the company in Monfalcone which has a long history of boat and shipbuilding but is also a somewhat depressed area so the company could tap right into a readymade skilled workforce there who would demand lower wages than many other areas in Italy. By locating there, they can also claim to have Italian heritage and the position is virtually in the centre of Europe. They can ship boats worldwide from Trieste only a few kms away or truck them from Portoroz in Slovenia to avoid the stupid Italian trucking regulations. MCY have also come up with a very distinctive and attractive design language for their boats which will mean they don't have to compete head on with other me-too manufacturers. Yes I would be very surprised if MCY were not to become a profitable major force in European boatbuilding especially given that they're backed by the financial might of Beneteau. Praps a lesson for Fairline in that if you are a 'stuck in the middle' company (in the business sense) like Fairline, you have to do something really different to prosper but thats easy to say and really hard to do
 
Thanks for all the great responses.

As for people suggesting this is somehow an odd topic, I just wanted to know that Fairline is on stable footing, financially, so I don't have to worry about it if I decide to purchase a boat from them. Surely that is a reasonable to ask?
 
X
crustysailor321 said:
Thanks for all the great responses.

As for people suggesting this is somehow an odd topic, I just wanted to know that Fairline is on stable footing, financially, so I don't have to worry about it if I decide to purchase a boat from them. Surely that is a reasonable to ask?
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You don't buy direct from Fairline, but through a dealer, like Boats UK. Their financing is more important as your contract is with them.
 
jfm said:
There is no problem on that score at Fairline, and I speak as someone who has twice been an unsecured creditor to the tune of about £1.5m in recent years, in the form of stage payments before delivery.
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Sorry to change the subject
But isn't there some kind of bank guarantee that can be obtained to protect any stage payments?
 
rafiki_ said:
X
You don't buy direct from Fairline, but through a dealer, like Boats UK. Their financing is more important as your contract is with them.
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Yes, that is correct of course. But my issue is that the dealer won't do you much good if the manufacturer isn't stable. I was seriously considering a Sealine at one point only for it to surprised me when it went under. The dealer didn't help at all in that case. I don't want to be surprised again if I want to buy a new boat next time.
 
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