Superyacht

Starring in the prestigious Monaco Yacht Show at the end of September 2015, the world leading China-based superyacht manufacturer Pride Mega Yachts highlighted the innovation and luxury behind China’s yacht industry, as the Chinese company is launching a new 88.8m superyacht called Illusion.

China has earned its reputation for its production of luxury superyachts. Its market production and exports have been steadily growing over the years.

While Europe is still the leading region for superyacht building, China’s yacht manufacturers in Guandong and Shandong. And this shows the potential to increase its share in the global production.

But while its superyachts are splashing a display abroad, China’s super rich have slowly begun to turn their eyes to sailing back home. However, it appears that it could take a while for yachting to truly take off in China as a luxury past time.

Luxury on Dry Land vs. Luxury Yachts

While the world’s largest economy with over 1 million millionaires and 67,000 citizens who can be classified in the ultra-wealthy bracket with assets of over $US16 million or more, only 0.3 percent of China’s rich own a yacht. Elements of Chinese culture, like the tendency to avoid the sun and the foreign concept of down time. Thus it has meant the yachting trend has been slow to start.

“The Chinese are not used to the idea of time away from it all, especially not European style,” said Colin Dawson, chairman of the Asia-Pacific Superyacht Association. “They tend to take a very different approach to yacht ownership – it’s a business tool, not a leisure item.”

But beyond the fact yachting has been primarily a Western past time, the luxury good import tax of 43% has also dampened the yachting market, not to mention the lack of experienced crews. This means Chinese superyacht owners not only need to relocate European crewmembers, but also obtain work visas.   

Plus there is the elephant in the room – the fact that China simply has few key marinas and also lacks the infrastructure for supporting yachts. In fact, when China’s ultra-wealthy do buy and keep yachts, it’s usually maintained in Europe, the US and elsewhere in Asia. However, the future might be bright for the yachting industry in China.

Slow Growth

The superyacht and luxury yacht market is growing in China, albeit very slowly. Especially since China is gaining a steady reputation as a luxury yacht builder.

“Chinese looking into superyachts may buy in Europe and elsewhere in Asia,” said Nigel Stuart. And he is the managing director of yacht building company Spirits Yachts.

The appeal of yachting may take Chinese consumers overseas, with dreams of sailing around the Mediterranean or with Asian destinations like Thailand or Malaysia. However, closer to home, the Chinese yacht-building market has began to rank up within the industry.

China, according to Boat international, ranks eighth in the top ten superyacht building nations. While it still pales in comparison to countries like Italy, the growing interest in yachting combined with a 43% import tax on luxury goods could mean that China’s yacht-building market will grow with the demand.

Will China Become a Driving Force in yachts?

China has not been written off as a market. However, it will take time for luxury super yachts to become a driving force in the industry. In nearby Singapore or Hong Kong, yachts have already begun to gain traction in popularity.

London-based Burgess Yachts expanded to include a division in Singapore earlier this year. Thus, placing its foothold in Asia anticipating the take off of the Chinese market. 

“We are slowly preparing for when China comes on stream – when it does, it will come big,” said Jonathan Beckett, chief executive of Burgess, “Is China the new market for superyachts? Not yet – is the answer. North America, Europe, the Gulf and the Middle East are still the markets of today.”

However, the interest in yachting is there. A survey by Shanghai-based research firm Hurun found that more than half of the Chinese from the mainland with a worth of over $1.5 million. Or more have expressed an interest in owning a yacht.

“We are taking a long-term approach to developing the market in Asia,” continued Burgess CEO Jonathan Beckett, “We don’t expect to gain immediate traction and are realistic about the investment in time and resources required for success. We believe in the importance of this market and are committed to introducing superyachting to a completely new customer base.”

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