THE INDUSTRY IS ENJOYING DRAMATIC GROWTH

Since 1997, the global market for luxury yachts (over 80 feet) has more than tripled.
The luxury yacht business evolves hand in hand with the world socio-economic climate: if the wealthy become wealthier, shipyards receive orders for even bigger yachts (averaging 35 metres in length).
The question is whether or not supply will be able to keep up with the pace of what is becoming increasingly personalised demand.

UNDERSTANDING THE REASONS

While the numbers speak clearly enough for themselves, understanding exactly why such dramatic growth is occurring in the industry is not so simple.

Continued economic growth in the US, Europe and Asia is a contributing factor, as is the extraordinary level of new large-yacht orders from the Russian market. But perhaps the most important factor is the stability of the euro/US dollar exchange rate.

Although it has stabilized at a higher level than many European builders would have wished, Italian shipbuilders and semi-custom shipyards have managed to increase their efficiency - thanks to recent investments in their manufacturing infrastructures - and can therefore price their yachts competitively and still retain adequate profit margins.

Top 20 BUILDER

It is to be noted that most of the top 20 shipbuilders in the international luxury yacht market regularly participate in the Monaco Yacht Show.

TOP 15 CUSTOM BUILDERS

TOP 10 BUILDERS BY AVERAGE LENGTH

TOP 10 BUILDER NATIONS

ITALY STILL IN THE LEAD

Italy is up 32% on 2004 with 249 units and 5.2 miles of total boat length under construction. Its title of leading luxury-yacht-building nation remains unchallenged. The world's largest builder, the Azimut-Benetti Group, today has 64 yachts over 80 feet under construction and on order, up 14% on 2004 in terms of unit production. The Ferretti Group (including Ferretti, Pershing, Custom Line, Riva and CRN) is ahead of Azimut-Benetti in unit production with 69 yachts, but remains in second place in the overall builder rankings due to 291 fewer linear feet under construction. The Rodriguez Group is showing growth, posting a 96% order increase compared to 2004.

The United Kingdom recorded a strong 75% increase in orders. Sunseeker International boasted the biggest hike among the industry's major manufacturers with a 116% boost this year.

Although Germany only ranks 6th with just 17 projects underway - far behind the three front runners - this is due to the country's policy of specialisation. Germany constructs the biggest luxury yachts in the world. Lürssen, for example, leads the field in terms of yacht length (234' per vessel on average with plans to produce a 532' yacht in the spring of 2005).

ASIA ON THE RISE

One of the more dramatic ascensions in the builder nation charts comes from Asia. Taiwan's and China's joint production increased by 217% compared to 2004 (calculated in linear feet). Taken together, the Taiwanese/Chinese order book would earn third place in terms of unit production, and fourth on the basis of linear feet.

RUSSIAN INFLUENCE

Without question, the most meteoric consumer market is Russia. Yachts have become the highest symbol of wealth among Russia's small but ultra-wealthy elite.

TYPE OF YACHTS BEING BUILT

SAILING IS SOFT

The only segment of the market showing any weakness for 2005 is sailing yacht construction. Overall, the segment has fallen by 5%. Expedition-style yachts, which had enjoyed a steady increase in popularity in recent order books, remain constant in 2005 at 20 orders.

To customise or to semi-customise - that is the question!

According to the socio-economic principle established above, the bigger the vessel ordered by a wealthy international client, the more demanding the specifications. Up to 30 metres, boats are semi-customised, designed on the basis of a chassis that already exists. Above the 31 metre mark, however, 71% of yachts are entirely customised and designed completely from scratch.

ORDERS BY LENGTH & YEAR

SIZE MATTERS

Despite the launch of numerous enormous yachts (including several 230-foot-plus vessels), the 59% increase in the 80'-89' motor yacht segment goes some way to explaining why the average size of yachts under construction in the global order book fell from 122.4 feet to 116.7 feet, i.e. by 4.7%.