Yacht industry sails ahead

Yachts at a marina in Shanghai. China's fast-growing economy is giving more people the ability to buy pleasure boats. (Xinhua File Photo)

Photo taken on May 11, 2013 shows a yacht at an exhibition held by the Gold Coast Yacht Country Club in Hong Kong, south China. The exhibition has attracted 70 exhibitors around the world with their luxurious yachts as well as a fancy lifestyle at sea. (Xinhua File Photo)

China's yacht industry is expected to enter a new and promising stage with full-speed growth in the coming years, a sector association said.

The number of yachts in the country will increase to about 100,000 in 2020 from about 3,000 last year, with the value of China's yacht business estimated to be 50 billion yuan ($8.16 billion) by then, the China Cruise and Yacht Industry Association said in its annual report released in May.

The government's support for marine tourism is also a positive signal for the industry, said Zheng Weihang, secretary-general of the association.

An improvement in infrastructure for yachts, such as marinas, was urged in an outline for the tourism and leisure industry released by the State Council in February, Zheng said.

Also, China's fast-growing economy is giving more people the ability to buy pleasure boats, which explains the surge in interest for boating and boat ownership in recent years.

In addition, yacht manufacturers are finding ways to make the boats easier to operate, industry insiders said.

"I think that in the near future, boating will become a new lifestyle for mainland residents, who prefer self-driving, just like it happened in Hong Kong," said Lars Petersen, general manager of Jebsen Marine, the sole dealer of Italian yacht brand Riva and the United Kingdom's Fairline.

He said that China's yacht industry is now in its first phase, but that it will soon move to the second stage in terms of different usage of the boats.

The second stage means that customers will increasingly change their use of the boats from business purposes to entertainment activities, which will add to the demand for smaller yachts to enlarge the clients' portfolios, Petersen said.

The industry's association echoed Petersen's words.

"Due to the growing number of wealthy people and an upgrade in consumption levels, the demand for small and medium-sized yachts will explode," the CCYIA said in its report. "The market size of the private yacht market will be about 35 billion yuan by 2020."

The increasing sales of private yachts are also an indication of the country's improved luxury-consumption patterns.

The Fortune Character Institute - a luxury industry research and consulting company - said in its China Yacht Report that the total revenue of the country's yacht market reached 1.75 billion yuan in 2012, with the luxury yacht sector accounting for 780 million yuan.

Figures from the institute also show that the compound annual growth rate of China's yacht market was 732 percent from 2006 to 2011, while the growth rate of other luxury items fluctuated.

"The soaring rise means that the consumption patterns of Chinese wealthy people have seen an upgrade and both the luxury vehicle and yacht sectors will become their targets," said Zhou Ting, director of the institute.

But Chinese multimillionaires, who are about 1.4 million and spend 1.56 million yuan every year on average, are still at an initial stage when it comes to their understanding of yachts, Zhou said.

Luxury yachts will become an important lifestyle choice for Chinese wealthy people, she added, as 51 percent of the respondents said they will purchase a private luxury yacht, according to the institute's report.

However, the middle class rather than the wealthy are expected to become the main consumers of yachts in the future, business insiders said.

"Luxury yachts led the industry at the beginning, but small and medium-sized boats will become the bulk of the yacht economy," said Zheng at the CCYIA.

Based on the experience from the international market, small fishing yachts and sailing boats priced between 300,000 and 800,000 yuan will become the most popular boats, he said.

"In the next five years, the market for these two kinds of yachts will see a good development," he added.

In Zheng's opinion, middle-class families, who will be able to afford the two types of small yachts, will support the growth of the market.

And for people who can't afford to spend hundreds of thousands of yuan on leisure boats, yacht rental companies will be a good option, Zheng said.