Is there merit to moving superyacht production east?
Whilst a recent report suggests that investment in Chinese industry is continuing to falter, there are some who suggest that moving superyacht production to China and other emerging markets could be beneficial for the health of the industry.…
In ‘China: When Exports Decline’, part of Global Economic Outlook Q4 2012, written by Deloitte Research’s director of global economics, Ira Kalish, it has been purported that a perceived weakness of Chinese industrial output is having a correspondingly negative impact on Foreign Direct Investment.
Q4 represents the third consecutive quarter of negative capital outflow and is the result says Kalish, of “the declining profitability of Chinese companies and pessimism about the Chinese economy.”
This reticence to move production into emerging markets is certainly in evidence in the superyacht industry, where cheap labour costs have proved less appealing than the retention of expertise in traditional production bases. Instead, as observed by GBV & Partners’ Giovanni Battista Vacchi at the recent Global Superyacht Forum, it is companies from these emerging markets who continue to seek to purchase manufacturing expertise abroad.
Whilst Vacchi felt it was unlikely European stalwarts would have their production facilities moved to the nation of their acquirers, he felt “there will be investments from Chinese, Middle Eastern or emerging markets’ conglomerates and sovereign funds.”
Vacchi said that this trend wasn’t limited to the Shandong purchase of Ferretti but includes the “Qatari [investment authority] buying Costa Smeralda in Italy, or Valentino.”
The popular consensus is that the established superyacht hubs will consolidate their position as the global economy emerges from the mire. But trying economic conditions can also play havoc with the established global order, as grupoarbulu’s owner, Iñaki Arbulu observed. Arbulu, whose company recently entered the superyacht arena with the purchase of a 60 per cent stake in e3 Systems, believes there is potential for the transfer of manufacturing expertise from Europe to Asia, as happened in the commercial sector two decades ago. This, he felt, could reinvigorate rather than damage, the superyacht market.
“I don’t know why it is assumed that new builds in growing countries deteriorate this industry”, Arbulu explained. “I think we should look globally”, he suggested.
As Arbulu went on to explain, if the superyacht industry finds itself constrained by economic challenges, it would be unwise to dismiss alternative money-saving production options.
“Something happened 20 years ago in the merchant industry…everybody said that these very sophisticated oil or chemical tankers will never be made in China or Korea. But now they do all of them.
“I think, in a global view, a designer could be European or American and the builder could [conceivably] be from China. It is not necessarily going to affect the industry [negatively]. Something similar has already happened in the fashion industry and the technology industry. So I think we should change our mindset if we want to continue growing this market.”
Related Links
GBV & Partners Website
grupoarbulu Website
Q4 represents the third consecutive quarter of negative capital outflow and is the result says Kalish, of “the declining profitability of Chinese companies and pessimism about the Chinese economy.”
This reticence to move production into emerging markets is certainly in evidence in the superyacht industry, where cheap labour costs have proved less appealing than the retention of expertise in traditional production bases. Instead, as observed by GBV & Partners’ Giovanni Battista Vacchi at the recent Global Superyacht Forum, it is companies from these emerging markets who continue to seek to purchase manufacturing expertise abroad.
Whilst Vacchi felt it was unlikely European stalwarts would have their production facilities moved to the nation of their acquirers, he felt “there will be investments from Chinese, Middle Eastern or emerging markets’ conglomerates and sovereign funds.”
Vacchi said that this trend wasn’t limited to the Shandong purchase of Ferretti but includes the “Qatari [investment authority] buying Costa Smeralda in Italy, or Valentino.”
Giovanni Battista Vacchi.
This, he added, “shows a trend of money coming from rapidly growing countries that need to get into brand-based businesses.” “This industry manufactures the ultimate luxury product, the dream. It’s something that appeals to everyone [including] investors.”The popular consensus is that the established superyacht hubs will consolidate their position as the global economy emerges from the mire. But trying economic conditions can also play havoc with the established global order, as grupoarbulu’s owner, Iñaki Arbulu observed. Arbulu, whose company recently entered the superyacht arena with the purchase of a 60 per cent stake in e3 Systems, believes there is potential for the transfer of manufacturing expertise from Europe to Asia, as happened in the commercial sector two decades ago. This, he felt, could reinvigorate rather than damage, the superyacht market.
“I don’t know why it is assumed that new builds in growing countries deteriorate this industry”, Arbulu explained. “I think we should look globally”, he suggested.
There was a hegemonic shift east in the commercial sector 20 years ago.
As Arbulu went on to explain, if the superyacht industry finds itself constrained by economic challenges, it would be unwise to dismiss alternative money-saving production options.
“Something happened 20 years ago in the merchant industry…everybody said that these very sophisticated oil or chemical tankers will never be made in China or Korea. But now they do all of them.
“I think, in a global view, a designer could be European or American and the builder could [conceivably] be from China. It is not necessarily going to affect the industry [negatively]. Something similar has already happened in the fashion industry and the technology industry. So I think we should change our mindset if we want to continue growing this market.”
Related Links
GBV & Partners Website
grupoarbulu Website
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