who is making the money?

[DepSol]

On brit boats they dont make as much as you think and once you have gone thru all the claims and customer service there aint alot in it but if you sell over 7 of these then you may make the boss smile as he will be into profit.

<hr width=100% size=1>Dom

<A target="_blank" HREF=http://www.soltron.co.uk>the website</A>

 

[hlb]

Still dont answer why a very nice new house can be built for a hundred grand. I'm not including the land here, cos they dont include it with boats!! Chuck in a couple of decent cars for the engines and bits and bats. And a boats still three times dearer. Why's that??

<hr width=100% size=1> <font color=blue>No one can force me to come here.<font color=red> I'm a volunteer!!.<font color=blue>

Haydn

 

[JMM]

Maybe the boat is more expensive because of the relatively skilled labour involved - plenty of brikies and labourers around these days to build a house, but i don't think there are that many that could make a good lay up or mould.


Regarding the Japanese entry to the market, I recall that Yamaha had a go at building sailing yachts a while ago. Although they were good boats, they didn't catch on for some reason.

<hr width=100% size=1>Jon M.

 

[martynwhiteley]

Still, the boats do come furnished.

Be quite a shock to buy a 42 ft Princess and open the cabin door to find bare glass walls and a ply floor. All that polished american cherry and fancy moulded tops in the heads must cost a bob or two.

Ah, but I bet it's cos they buy all the deck harware and nav lights from the local swindlery! Plus buy all the Volvo gear in separate spare bits ('cos after they've forgot to put in the engine before the top moulding, they must have to install them in very small pieces).

Must be somat to do with development costs.

Let's face it, the sea trials for yer average 4 bed detached wont cost a packet. Just wait for the Ouse to flood every other year.

Think about building one yourself.

The mouldings cost megabucks, the fittings, the furnishings. However there does not seem to be an ecomomy of scale in boating. At LBS this year, we puzzled over how a Sealine S28 could cost double an S23. Sure there's an extra engine etc. (say £15K), a bit more grp, and upholstery etc., but an extra £35K worth, I don't think so...



<hr width=100% size=1><font color=blue> <A target="_blank" HREF=http://www.mboat.org>http://www.mboat.org</A></font color=blue>

 

[EME]

Interesting pespective as mine is totally different. I see the boating industry as one which has never managed to capture the essence of 'The Brand' with the possible exception of 'Sunseeker'.

We all know that 'Brand value' is really the process of extracting more money for any product that it is really worth BUT is that really true in the boating industry? I wouldn't mind betting that profits are vary closely related to production cost i.e . consistent mark up.

Take an example :-

Car industry BMW 3 series v( 316) vs BMW 7 series. Four times the cost but for what? same manufacturing process but a few more goodies... fairline 37 vs 48..lot more boatt for your money.

In boat manufacture I wouldn't mind betting that cost and size are much more closely related. Less standardistaion of process, labour/effort/reduced demand a lot less linear relationship..

the manufacturers know the answer.. anyone out there who knows the answer want to comment?

<hr width=100% size=1><font color=blue>I am WHAT I say I am</font color=blue>

 

[martynwhiteley]

Just Bizzare isn't it.

Reading this forum, you'd think no one wanted to buy a brand new boat, so why aren't new prices dropping?

Perhaps all new boats ARE bought by people with more money than sense, so they don't know what is good value and what isn't, and are happy to pay half a million, cos that means they must have 'loadsa money'!

Difficult one is size and value. I know that a boat only 2 foot longer seems much larger, so I guess there is a lot more material in it. But do the extra quantities of material really cost that much?

Is it production volume, but do they really make loads more S23's than S28's?

Look at Bayliner pricing; £40K for a 245, £50K for a 265, £60K for a 285.

Looks a bit suspicious, exactly £10K more for each! Smacks of market forces and all.

Car pricing has much more to do with sales volume IMHO than most factors, and we know they only make a few hundred of each boat, and few of them will be exact twins, due to different layouts and engines. Most cars are made in the 100,000's.

I think 'brand value' is very much there in boats, and more like the UK car market 5-20 years ago, when most people would just buy Ford, Rover etc. regardless. In 1998 the list price of a Rover 416SE was over £16K, now they can't give them away for little over half that price! Why because Brits have finally recognised that buying a 'British' car from their local dealer without checking out the options was stupid.

I bet Galeon could sell their 330 Fly for much less than £100K if new boat buying Brits become more like the car buyers of today.



<hr width=100% size=1><font color=blue> <A target="_blank" HREF=http://www.mboat.org>http://www.mboat.org</A></font color=blue>

 

[Deleted User YDKXO]

Its simple. Japan has very high labour costs and could not efficiently manufacture a labour intensive low production run item like a pleasure boat. What the Japs do very well is manufacture things where there are economies of scale like engines, cars etc. Also there are other low cost countries in the Far East such as Taiwan, Singapore and China where boats are made efficiently and the Japs couldnt compete anyway

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[Deleted User YDKXO]

My impression is that nobody is making loadsamoney out of manufacturing and selling boats even though new boat prices seem to rise much faster than inflation. The big UK boat builders are only modestly profitable according to their accounts and, as you say, the smaller ones come and go. As for dealers, I guess that sales cost per boat is very high what with the necessity to keep new and part exchanged boats costing them finance and storage charges. I also believe that the dealers pick up most of the warranty costs as well. My guess would be that most dealers work on something like a 20% margin, of which 5-10% is given away in discount. Then consider the fact that most dealers have only a limited number of boats to sell per year because the manufacturers cant build them in sufficient quantities. I think if you looked at a boat dealer's business in terms of sales per employee or sales per sq ft or how many times they turned over their stock in a year, it would look very poor compared to other retail operations
Basically, boat building and selling is a cottage industry with huge inefficiencies and until these inefficiencies are addressed, boats wont get any cheaper


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[gonfishing]

Stage Payments

I believe that if you order a new boat you will be asked to make regular stage payments as the boat progresses.So the builder isn't even using their own money !!! So you subsidise the firms cash flow, to then be rewarded by a shoddily finished boat, with a snagging list as long as your arms, and a probable 2yr battle to get it sorted,and all this for an exhorbitant fixed price !!! We must have all been dropped on our heads at birth !!!!


julian

<hr width=100% size=1>man made it ,man can repair it, i think??

 

[kimhollamby]

Some thoughts

It would take a brave builder to post on here after events of recent days, so here are a few areas to consider:

a) a boat is not like a house...and judging from the build quality of my seven-year-old house I'm glad it isn't (okay, so I'm sore that the shower has decided to pee through the downstairs smoke alarm thanks to inane workmanship, one toilet is doing its best to divorce the wall with which it should be associated and I am having a love/hate relationship with the plumbing generally at present but the standards are rubbish, not one wall true to the other etc etc).

b) the design and tooling phase of a boat model's life history is horribly expensive. A production run of 100 examples of many models is considered successful in this day and age, especially as you move up the size range...each one of those sales has to carry a sizeable overhead before it is even built.

c) volumes are low and will continue to head even further that way thanks to market forces, environmental pressures and so on.

d) the continual drive for luxury (okay, you'd settle for flecked GRP linings and foot-pumped cold water but no-one else is at the moment) is in turn making boats even more horribly labour intensive and also expensive to equip and complicated to deal with warranty issues. The builders' buyers and suppliers are ranging well outside of the marine industry for some of this kit and there's a lot of rationalisation and vertical integration occuring in the supply chain right now, so it's not a simple issue.

e) raw material costs on the up; several resin suppliers have just announced further price increases. Also ways in which resin and other nasties being used requiring huge investment now to keep environmental issues in check compared to the slap it in the mould techniques of the 1960s, '70s and '80s. Ironically, some of the only things that seem cheaper now are the bits you buy afterwards such as lifejackets, handheld GPS units and so on.

f) there are techniques to make mass build possible but when builders employ them (Bavaria being a most recent prime case in point, many US builders being others) they get slaughtered by consumers and competitors as being cheap and nasty, which might not be fair at all but there it is. Bespoke build at Ford Model T prices not easy, well actually not possible.

g) boating as a hobby is not a registered charity. There are some sound arguments for dealers to make a greater margin than they do, provided reinvested in service. Undoubtedly the biggest problem area is service and there is ample evidence to suggest some of those issues come from under investment in staff and facilities. Some of the operating margins are very, very low.

h) boating in many regions horribly seasonal and while that reflects worst in localised marine businesses, who struggle to maintain a balance to deal with summer highs and winter lows, it has an effect right up and down the food chain.

++

None of this intended as a defence; neither is it a suggestion that things cannot be done more efficiently. But comparisons with the auto or house-building industries are horribly misleading for a whole bunch of reasons and in my view, not at all valid, other that to serve as a sharp reminder that consumer expectations have never ever been higher.

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[chippie]

Re: Some thoughts

Kim,Are you telling us you bought your house without a survey? yet another example of no crossover with the marine industry. ;-)

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[kimhollamby]

Surveys

Well, interesting point. Actually I bought it with the minimum survey needed for loan (it was about three years old and so supposedly covered by NHBC guarantee, which I later see might just kick in of the whole house falls down). Survey did not, of course, check the plumbing, so I had all that fun to come.

Shouldn't be surprised...a new neighbour took less than a week after we moved in to ask us 'was our shower okay...'!

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[tripleace]

Yamaha I think did go into boats but pulled out a couple of years ago

<hr width=100% size=1><A target="_blank" HREF=http://www.boating-ads.co.uk> Boating Website</A>

 

[ianainge]

Got talking to the sales guy at Fairline last year when i was looking at a used boat and the margin in a new Targa was 18% they aimed to retain 10%.

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