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Boating/Pleasure Boating/Yachting
Industry & its Evolution in India
Italian Trade Commission, Mumbai
INDIA OVERVIEW
Geography
GEOGRAPHY AND COAST LINE
• Total Area : 3.28 million sq km
• Land Boundaries : 14,103 km
• 29 States & 6 Union Territories
• Long coastline of 7,517 kilometers
(4,671 miles)
– Indian Ocean on the south
– Arabian Sea on the west
– Bay of Bengal on the east
• The mainland coast consists of
– 43% sandy beaches
– 11% rocky coast including cliffs
– 46% mudflats or marshy coast
POPULATION AND DEMOGRAPHICS
Population and Demographics
India is second most populous country in the world with a population of 1.17 billion
Population growth rate is 1.548%
Young country - 35% population under 15 yrs; 75% under 40 years
Gender ratio- 933 females to 1000 males
Literacy rate is 64.8% (53.7% for females and 75.3% for males).
About one-fourth of the population (0.28 billion) lives in urban areas.
National Language : Hindi, spoken by 33% population; 14 officially recognized languages
English: widely used in business and everyday life
Age Group Population (est. for 2010) % share
0-4 126,352,821 10.74%
5-9 146,795,878 12.47%
10-14 142,826,236 12.14%
15-19 114,648,126 9.74%
20-24 102,691,195 8.73%
25-29 95,436,173 8.11%
30-39 165,707,919 14.08%
40-49 118,001,662 10.03%
50-59 73,492,332 6.25%
60+ 90,789,656 7.72%
Total 1,176,742,000
Source: Census of India
Income wise distribution of households
INCOME GROUPINGS
In millions
2005 2015 2025
320
280.5
280
244.4
240
206.9
200
160
120 106 101.1
94.9 91.3 93.1
74.1
80 55.5 49.9
33.1
40 10.9
1.2 3.3 9.5 2.4 5.5
0
Globals Strivers Seekers Aspirers Deprived Total
Annual household Annual income Annual income of Families living in poverty
income of Rs 1 ranging from Rs Rs 0.2 -0.5 conditions, with very low
million and above 0.5 to Rs. 1 million (US$ disposable income
(> US$ 22,000 in million (US$ 4,500-11,000 in
nominal terms, 11,000 to 22,000 nominal terms,
and $ 115,000 in in nominal terms, and $ 23,000-
PPP terms) and $ 58,000- 58,000 in PPP
115,000 in PPP terms)
terms)
Source: NCAER - India’s premier economics research agency
No. of households with income > Rs. 1 million (in major cities)
INCOME GROUPINGS
300000
250,909
250000
200000
152,515
150000
115,439 109,061
100000 71,717
50000
0
Hyderabad Delhi Bangalore Mumbai Pune
High Net worth Individuals (HNIs)
→ India has over 120,000 HNIs
→ The average net worth of the Indian HNIs has gone up
to $3.6 million, compared to the global average of $4
million.
• Per capita income in 2008-09 - Rs 31,278.
→ India recorded the fastest growth in the HNI population
• Wealthiest cities: Mumbai, Delhi, Kolkata
worldwide in 2007-08, growing by more than 23%.
Chennai and Hyderabad / Bangalore
→ India also has over 1,080 Ultra-High Net worth
• 150,000 households with annual income >
Rs. 5 mn (75,000 euros) Individuals (individuals with an investible surplus
• 25% of population is below poverty line exceeding US$30 million), whose combined wealth was
estimated to be $ 116 billion at the end of 2007
Source: Skyline India, World Wealth Report, prepared by Merrill Lynch and Cap Gemini
INDIAN ECONOMY
• GDP growth average 8.8%
from 2003-04 to 2007-08
(over 6% in 2008-09)
• Increasing importance of
trade and external capital
inflows. The share of
merchandise trade increased
to over 35% of GDP in 2007-
08 from 23.7% in 2003-04.
• The 11th five year plan
(2007-12) targets 8-10%
growth per year for Indian
economy.
% contribution by sector
Agricultur Economy Profile (2008-09)
e
GDP at Factor Cost US$1.072 trillion
17%
(current prices)
Forex Reserves US$ 252 billion
Exports US$ 185.3 billion
Imports US$ 303.7 billion
Services Industry
27% FDI inflows US$ 35.18 billion
56%
PLEASURE BOATING & YACHTING INDUSTRY
PLEASURE BOATING & YACHTING INDUSTRY
Yachts Nomenclature
A yacht is a recreational boat that covers two different classes of watercraft:
→Sailing Yachts:
• Sailing Yachts range in overall length from about 20 ft (6 m) to well over 100 ft (30 m).
• The motive force being the wind which makes sailing more economical and environmentally
friendly
→Power Yachts:
• Motor yachts typically have one or two internal combustion engines that burn diesel fuel
making it more expensive to operate than sailing yachts.
In western markets, yachts are classified
according to 5 major categories: Due to the unorganized nature of the
Indian yacht industry, the
Particulars Length Top speed classifications are different:- Small
Boats, Dhow class, Sail boats,
Sports & Utility Up to 40 ft 40 knots
Large Motor Boats, Speed motor
Boats
Boats, Sailing yachts
Small Yachts 40-80 ft 25-30 knots
Super Yachts 100-200ft 15-40 knots
Mega Yachts 200-300ft 20 knots
Giga Yachts >300 ft
PLEASURE BOATING & YACHTING INDUSTRY
Origin & Evolution in India
PLEASURE BOATING & YACHTING INDUSTRY
Market size
As of 2008, 300 boats were registered in India:
120 luxury yachts & 150 speed boats
Almost 200 boats and about 50 yachts in Mumbai and Goa
Foreign brands had a dominant share
Now, approximately 120 boats are sold every year, of which more than 80% are
speed boats
Popular sizes range from 15ft to 35 ft in overall length.
Wide price range - from Rs 3 million for speed boats to over Rs 1 billion for super
luxury yachts
Current revenue estimated to range from Rs 1.5 billion to Rs 5 billion
per year, depending on which types of luxury yachts get sold in the year
For instance, in 2007-08, a single Ferretti accounted for almost 50% of the
value of boats sold in India
The industry is growing at more than 100% p.a. in value terms
- Share of luxury yachts expected to increase over the years
IMPORTS
Imports of Yachts and Other Vessels for
Pleasure/Sports
(Value in US$ million)
2006-07 2007-08 2008-09
Italy 0.06 5.07 11.18
US$ 20.96
UAE 0.23 1.16 0.49
million
US$ 2.66 USA 1.01 2.54 2.38
million France 0.22 0.85 1.62
UK 0.14 0.78 0.25
In 2007-08, Italy was by far the leading Germany 0.01 0.57 -
source of imports (with 24.4% share),
Others 0.99 9.99 1.82
followed by USA, UAE and other European
countries. Total 2.66 20.96 17.72
Above data also supports the industry feedback that the demand for
yachts in India has increased exponentially in the last two years
Source: Ministry of Commerce and Industry
PLEASURE BOATING & YACHTING INDUSTRY
Major destinations
→ Location is a key element and constraint in the development of yachting as a
national phenomenon in India
→ At present, Mumbai, Goa and Kochi are the only yachting destinations in India
Mumbai Kochi Goa
• Biggest location for yachting in • The maritime gateway for peninsular • Goa is known as a “Tourist
India. India and one of the best ports in Paradise",
• Has a strong boating heritage with Asia. • A firm favorite with travelers
three sailing clubs • Strategically located on the busy around the world - 12% of all
• Natural harbor with miles of international sea route foreign tourist arrivals in India.
sheltered coastline • 11 nautical miles from the Gulf- • Close to Mumbai
• Geographical proximity to another Singapore-Far East route
yachting hub, Dubai • 70 nautical miles off Suez-
• Prior to the boat show in Singapore-Far East
February/March 2007, there were • During 2009-10, more than 50 luxury
around 20-30 pleasure boats but ships touched Kochi
since then the number has increased
to more than 100.
YACHTING DESTINATIONS IN INDIA
PLEASURE BOATING & YACHTING INDUSTRY
Marinas
Absence of marinas is the biggest challenge and constraint before the Indian yacht
industry.
Uneven sea and high concentration of pollutants, particularly sulphur, has made potential coastal
suburbs devoid of any docking facilities for large ships or even water sports.
High political sensitivity, greater priority always given to fishermen for allocation of harbor space.
→The best waters around Mumbai city have already been taken over by local fishermen and would
require huge compensations to be taken over for marinas
No national or state level policy for marinas, anywhere in India, presents major risks for
entrepreneurs who wish to develop marinas in India.
People didn’t buy yachts
because they never had a
proper docking place for their
yacht Vicious
circle While no developer wanted to
develop marina as they never
saw enough demand from
boat owners.
FACTORS FOR GROWTH
MARINAS AND OTHER INFRASTRUCTURE
The Kochi International Marina
• India's first ‘world class’ Marina commissioned at Kochi in April 2010
• Located between Kochi Marine Drive and Bolgatty Island
• Built at a cost of Rs 82 million, designed and developed by Ocean Blue Marinas
• Capacity: Currently, it has docking, storage, maintenance and other facilities for berthing
34 yachts. In the second phase, to be expanded to accommodate 50 yachts
• Other facilities: Marina house (with 24 rooms, including 4 suites), a health club, caféteria
and recreation facilities, and a golf course
Some serious recent attempts have been made to set up marinas in India
Maharashtra Maritime Board has come up with a draft legislation on regulatory framework
required to set up a marinas in the state of Maharashtra.
The naval base off the Mumbai harbour may soon have a marina. The total cost of the project is
estimated to be Rs 18 billion.
Ocean Blue Marinas, which had set up a modern marina for the Mumbai boat show, has 15
projects in Goa, Kochi, and Chennai and along the coasts of Maharashtra and Gujarat.
A business tycoon from Goa is planning to build a 300-boat marina in Sancoale village, in
Mormugao Taluka, at the mouth of the Zuari River in Goa with an investment of Rs 1 billion.
TOURISM PROMOTION
• Tourism being aggressively promoted by Govt.
• Foreign Tourist Arrivals (FTAs) increased from 2.38 million in 2002 to 5.11 million 2009
• Foreign Exchange Earnings (FEEs) from tourism increased from Rs. 150 billion in 2002 to Rs.
549 billion in 2009
• Niche tourism like heliport tourism, medical tourism, wellness tourism, adventure tourism,
cruise tourism and caravan tourism have been on the rise
• Decline in FTAs in 2009 by 3.3% over previous year (world average decline 4.6%)
Year Foreign Tourist % Change Over Foreign Percentage Foreign Percentage
Arrivals (in Previous Year Exchange Change Over Exchange Change Over
million nos.) Earnings (Rs. Previous Year Earnings (in Previous Year
In Billion) Million US$)
2000 2.65 6.7 156.26 20.6 3,460 15
2001 2.54 -4.2 150.83 -3.5 3,198 (-)7.6
2002 2.38 -6 150.64 -0.1 3,103 (-)3.0
2003 2.73 14.3 207.29 37.6 4,463 43.8
2004 3.46 26.8 279.44 34.8 6,170 38.2
2005 3.92 13.3 331.23 18.5 7,493 21.4
2006 4.45 13.5 390.25 17.8 8,634 15.2
2007 5.08 14.3 443.6 13.7 10,729 24.3
2008 5.28 4 507.3 14.4 11,747 9.5
2009 5.11 -3.3 549.6 8.3 11,394 (-)3.0
CRUISE TOURISM
• The Cruise Shipping Policy (Ministry of
Shipping) was approved on 26th June, Year No. of cruise tourists
2008, aimed at
2003-04 28,000
– making India a cruise tourism
destination with state-of-the-art 2004-05 27,760
infrastructure and other facilities 2005-06 1,52,827
– to attract the right segment of the 2006-07 2,40,307
foreign tourists 2009-10 600,000
– to popularize cruise shipping with (target)
Indian tourists;
• Tax exemptions for the cruise operators
• The Ministry sanctioned Rs.145 million in Cruise arrivals in India
2008-09 to Cochin Port Trust for Cruise Mangalore Mormugao Mumbai Kochi
140
Tourism infrastructure development at
Cochin Port 120
• increase in Cruise Arrivals 100 38 43
• Mumbai Port handled 66,681 domestic 80
and 24,400 international tourists for 60 31 26
cruise shipping in 2008 19
40 22
• Over 48% increase in international cruise 16
32 31
20 18
vessels at Indian ports, and a hike of 28 11 18 17
8 10
per cent in cruise liners which operate 0 3
only within Indian ports, catering mostly 2004 2005 2006 2007
to domestic tourists
Rising Income Levels
RISING INCOME LEVELS
2006 2008
250000 224,000
→ Number of salaried taxpayers earning
200000
more than Rs 10 million has grown at a
150000
CAGR of 65% over the past two years
100000 87,000
touching 5,000 in fiscal 2008.
50000
4,400 10,500
→ High rate of growth of High Net Worth
2200 5000
0 individuals
> Rs 1 million Rs 5 to 10 million Rs. 10 million
Income per annum
HIGH VISIBILITY THROUGH MAJOR EVENTS
The Boat India Show 2008 was held at Kochi
The popular Volvo Ocean Race stopped by at Kochi for a fortnight, Dec 1-14, 2008
Vasco da Gama Rally 2009-10: The last leg from Mumbai to Goa was flagged off on 26th of April
2010. The rally starting from Alanya Marina in Turkey in October 2009, has yachts varying in size
from 9 m to 17 m from Holland France, USA, Italy, UK, Germany, Belgium, Switzerland, Italy and
France
People have spent close to Rs 4 billion on pleasure boats since Mumbai hosted India’s first
international boat exhibition – signifying the influence these shows have had in India
The makeshift marina near the Gateway of India which had 20-30 boats earlier now has 100
boats.
Events such as the Volvo Ocean Race 2009, the boat India 2008 have done a great deal in
enhancing India’s position as a major shipping destination
OWNERSHIP PROFILE
→ Majority of the boats (75%) are owned by
OWNERSHIP PATTERN
Individuals
→ 50% of the owners are in the age
group of 40-60 years while another
33% are 60 years +
→ With fractional ownership concept
gaining ground, bulk of the owners
are CEOs/Partners/Owners of
companies
→ Speed boats with overall length less than
31 ft are most preferred
→ 95% of boats are purchased as luxury
boats; only 5% are ‘utility boats’ – mostly
in and around Mumbai
→ 25% boats owned by corporates (UB
group, Indiabulls Financial Services, Ispat
Inc (L N Mittal), Essar Steel, Reliance-
ADAG…)
Source: Royal Bombay Yacht Club, Interviews
Owns the 95 m long (311 ft) Indian Empress costing Yachts one can order in India
THE INDIAN ‘YACHT CLUB’ (WHO’S WHO)
approximately Rs 4.43 billion. Indian Empress is largely
UTILITY BOATS INDICATIVE
used for his private parties.
PRICES*
Vijay Mallya Chairman, UB Group Lancer 21 Rs. 1.7 million
Monterey 18 Rs. 2.0 million
Silver Craft 31 SF (Dolphin Rs. 4.5 million
Owns India’s first indigenously designed yacht—MY 31)
Ashena, a tri-deck luxury yacht. It’s one of the few in Sea Ray 350 Sundancer Rs. 10.5 million
the world that is entirely made of wood. Regal Sports Boat 3050 Rs. 8.2 million
Larson Cabrio 310 Rs. 8.4 million
Gautam Singhania CMD, Raymond
Touring 36 Rs. 6.1 million
YACHTS
Majesty 44 Rs. 30 million
Purchased a 34 meter super luxury yacht from Italy, Azimut 43 Rs. 45 million
costing approx. Rs. 4 billion. The yacht has about Princess 42 Rs. 38 million
5500 sq.m. area across upper and lower decks. Sunseeker 45 Rs. 45 million
Ferretti 460 Rs. 48 million
Anil Ambani, Chairman of Reliance- ADAG Majesty 66 Rs. 100 million
Azimut 68 E Rs. 190 million
Princess 67 Rs. 180 million
Sunseeker Manhattan 66 Rs. 185 million
This famous celebrity recently bought a private Ferretti 681 Rs. 210 million
yacht worth Rs 2.5-3 crore.
MEGA YACHTS
Salman Khan, popular Bollywood star Majesty 101 Rs. 240 million
Azimut 103 S Rs. 480 million
Ferretti 110 CL Rs. 600 million
SUPER YACHTS
Custom Line 112 Rs 940 million
Sold a 50 footer Sunseeker, which he picked up in
Pershing 115 Rs. 1.28 billion
London in 2008. He also bought another 84 footer
Alibi Rs. 4 billion
(The Sunseeker 80)
*Prices are inclusive of import duties
Riyhad Kundanmal Director, Ocean Crest Marine Source: Industry
→ Mumbai accounts for 60% of the
pleasure boats in India. The Gateway
of India in Mumbai, caters to almost
200 boats of various sizes and
shapes.
→ Besides Mumbai, Goa and Kochi, the
number of yachts owners in non-
coastal cities like New Delhi and
Hyderabad is increasing
Usage Pattern
→ Luxury boats are valued and fully utilized by their
owners.
→ Boat owners who don’t use the vessels often,
offer their boats on charter in order to cover
maintenance costs.
Source: Field Survey interview
MARKET SEGMENTATION: DEMAND SIDE
→ 30% of the owners rate maintenance
provision as their top selection priority.
→ Pleasure boats particularly super luxury
products have a high maintenance cost,
generally ranging from 5 to 15% of the
price tag.
Source: Field Survey interview
FORMS OF OWNERSHIP
Time Sharing
→ Time sharing is a membership based system in which members are allocated specific
number of usage hours during the assigned period.
→ These memberships are not transferrable and non extendable and have no right on
the yacht
Club Privada, with 48 members, is India’s first luxury boat club to launch the time
sharing concept. The Club offers time share options with a choice of yachts, including
super luxury $2 million Azimut 50 and Larson Cabrio 350.
The Azimut 50 costs Cabrio 350 costs The club recently initiated a Points
Rs. 3.1 million for 30 Rs. 1.6 million for System wherein 500 points are given to
days over three 13 days every year the members for Rs 0.5 million lump sum
years for three years payment, which in turn can be redeemed
on an hourly basis as per requirement.
Source: Field Survey interview, Yachting Association of India Joint Secretary General, Commodore Ajay Narang
FORMS OF OWNERSHIP
Fractional Ownership
The yacht is shared typically 5-6 persons, one ‘owner’ member and other ‘sharer’
members
Aquasail is a company that promotes fractional ownership. The contract
between Aquasail & an Owner is typically for a 5 year period. Aquasail manages all
the maintenance and running costs for the boat through the period of the contract
while customer also receives annual payments.
Many dealers have started approaching clients with this proposition.
Benefits of fractional ownership: Problems faced under fractional ownership:
→ The member gets to use high quality boat without → Diverging budgetary preferences
paying full purchase & maintenance costs.
→ Free riding among the members
→ No hassles of maintenance, servicing since all are
taken care of by the maintenance company. → Simplistic and inflexible scheduling agreements
→ Members also have the right to sell their share at → Differences in willingness to do maintenance
any point of time.
→ Poor asset care and use
→ Together owners can rent the yacht during extra
days too and share profit. → Lack of communication between owners
FORMS OF OWNERSHIP
Charter Services
→ While investing in a yacht, one important factor to bear in mind is its potential for charters
→ By chartering a yacht for about 10 weeks a year, the owners can pay operating expenses for a
full year
→ Club Privada has entered into charter market, by renting yacht facilities for Rs.150,00 -
Rs.30,000 per hour for 8-12 people occupancy.
→ Vijay Mallaya, of UB group, charters his mega yacht, which costs about $700,000 a week.
→ License to charter can only be obtained at the time of purchase of the yacht when it is registered
with the concern authorities in India
Financing & Insurance
→ Indian financial institutions have not yet adopted marine financing options.
→ The only bank active in this field is Yes Bank, where in a dedicated team is handling this.
→ Usually all insurance companies provide marine insurance
→ Hull insurance policy in India is not too much conclusive, it has been taken from Europe but
when compared to environmental variance and sea conditions in Europe and India, there is a
vast difference
SUPPLY SIDE SCENARIO
MARKET SEGMENTATION: SUPPLY SIDE
→ Most yacht manufacturing companies operate through a dealer model
→ Dealers are usually people well renowned in sailing circles and their
. own links and contacts play an important role in lead conversion
→ The scenario is no different in India where almost all foreign
manufactures have a presence through dealers, and operate on multi
brand models
→ The absence of multiple dealers of a particular brand and the fact that
the market is value driven enables the customer to enjoy a good
scope of bargaining
Recently, dealers have started giving discounts and reducing their margins to increase
sales. Starting from a target margin of about 30%, the dealers usually settle for a
margin as low as 8%, depending upon the client’s bargaining power and the dealer’s
urgency to make a sale
MARKET SEGMENTATION: SUPPLY SIDE
Key tactics – Sales generation
→ Word of mouth publicity is the most effective
method of sales generation, accounting for 49%
of the sales.
→ Exhibitions and Boat Shows are a recent
development in India and are likely to emerge as
an important avenue for sales generation.
Key Attributes in a Dealer
→ 50% of the customers identify dealers according
to the brands that they deal in
→ Only 20% choose on the basis of the
maintenance and services offered.
Source: Field Survey interview
MARKET PRESENCE OF MAJOR MANUFACTURERS
Although the official import statistics indicate that Italian companies have about 25%
market share, the feedback received from industry players during primary research,
puts the share of Italian companies at a dominant 45% in value terms.
Source: Field Survey interview
Gulf Craft Inc. Maxum
PROFILING OF MAJOR MANUFACTURERS
• Operating since 1982 in UAE, the company holds a pre- • A Brunswick Corporation brand and a member of the
eminent position in the global leisure marine market Brunswick Boat Group, Maxum is the acknowledged
offering a wide array of products. leader in recreational boating for more than 15 years.
• Six sales were recorded through them during 2007-08. • Maxum boats pass through the popular PRO® System
• Manufactures high speed boats and yachts, ranging from which ensures highest quality parts and manufacturing
30 – 140 feet, with an annual production of 600 boats. processes at the best prices.
• Exports more than 70 % of its output and its super-luxury • Maxum is known for manufacturing the following types
vessels are to be found in virtually every major harbour of of yachts:
the world. – Speed boats
• Gulf craft has product range under 3 distinct brands - the – Sport Cruisers
Majesty, SilverCraft and Oryx range of boats and mega- – Sport Yachts
yachts.
• West Coast Marine is their exclusive dealer
Sealine Ferretti
• Founded in 1972, Sealine is currently one of Europe's • With a current production run of around 60 units, this
largest luxury boat builders, producing over 300 boats Italian group is focusing on top-end yacht including Fly
a year. bridge.
• Its product range comprises Sports Cruisers (25’-47’) • 460 (46’) and 550 were the first two motor yachts
and Fly bridges (34’-60’). delivered by Ferretti and were the first luxury motor
– T series yachts to arrive In India.
– F series • Recently set up shop in India through Marine
– S series (entry level S25 to the commanding Solutions, India’s premier yacht retail company.
SC47) • Group consists of about 10 design and production
• With international sales and dealer network comprising companies including Pershing S.p.A, Itama Cantieri
over 40 dealers, Sealine has representation across the Navali S.p.A, Riva S.p.A. among others.
globe.
PROFILING OF MAJOR MANUFACTURERS
Azimut Nautilus Yachts
• Azimut which is positioned as the epitome of luxury , •
• Kochi based yacht manufacturing company manufacturing
Kochi based yacht manufacturing company
has a range of around 300 nautical miles high-powered air-conditioned single cabin boats of 16 feet
• air-conditioned than
It manufactures high-poweredones costing moresingle
costing Rs.1-2 million as well as
• Amerglass, a modern Dutch shipyard producing boats boats with feet cabins Rs.1-2 million as well as
cabin millionof 16 morecostingand electronic fish-finders.
Rs.20
in fiberglass are their dealers. Products consisted of ones costing more than Rs.20 million with more cabins
sailing boats, motor cruisers and finally motor yachts and electronic fish-finders.
from different makers: British Powles, Westerly
Grady White Boats
• The product of a joint-venture with Amerglass, the first
fiberglass motor cruiser developed, the AZ 43 BALI,
was an instant success. • One of the most successful boatbuilding companies in
the world since 1959, Grady-White Boats has a
• Models available are: Fly- 39E, 42E, 43, 46E, 47, 50, legendary reputation for designing and producing
55E, 62E, 68E, 75, 80, 85, 98, 105,116; Open- 103S outstanding fiberglass boats.
• Sorenstam Ventures and New Wave are two among • Dealer: New Wave takes care of its sales in India.
few dealers of the yacht manufacturer.
Princess Yachts Aicon
• British motor yacht maker based in the city of • The Aicon Group is one of the most dynamic operators
Plymouth, Devon, England. in the design, construction and commercialization of
• Founded in Plymouth in 1965 as Marine Projects Fly bridge and Open yachts, both in Italy and abroad.
(Plymouth) Ltd, it was bought in 1981 by South African • Launched only on 1999, Aicon has established itself as
businessman Graham J. Beck, who sold the business to one of the major Italian operators in this sector with a
French businessman Bernard Arnualt's investment strong presence in Europe, and, more recently the
group, L Capital, a division of LVMH for £200million in United States and China.
June 2008. • Dealer network covers the USA, the EMEA countries
• Their current model program includes a series of (Europe, the Middle East and Africa), Russia and Asia
flybridge yachts ranging from the Princess 42 at 44 • Available in India in open boats and flybridge version.
feet, 3 inches (13,5 metres) to the Princess 95 at 95
feet 3 inches (29,3 metres), and a series of sporting
yachts, designated as V-Boats and ranging from 42 to
85 feet.
PROFILING OF MAJOR MANUFACTURERS
Bayliner New Wave
• Leading manufacturer of recreational boats established • Deals with yachting, power boats or water sports from
in 1957. various brands like Azimut, Cobalt boats, Larson,
• company operates as a subsidiary of Brunswick Grady white.
Corporation, which acquired Bayliner's former parent • Assist customers with certification by authorities,
company US Marine in 1986. insurance, transportation to India, customs,
• Bayliner facilities are located in Pipestone, Minnesota, commissioning and other regulatory issues.
Roseburg, Oregon, and Cumberland, Maryland, in the • tied up with Ocean Blue Boating Services Pvt. Ltd.
United States; and in Reynosa, Tamaulipas, in Mexico. (OBBSPL) for servicing and maintenance
• OBBSPL currently is based out of Dharamtar, Alibaug,
with a 10,000 sq/ft waterfront, all weather workshop
Sunseeker International
and storage facility with capabilities to perform the
• UK luxury motor yacht manufacturer. . basic services to a full yacht refurbishment.
• Their headquarters and assembly factory is in Poole • OBBSPL offers a 24-hour call service for Break Down
Harbour, at Poole in Dorset, England. The company has and towing Service around the Mumbai area.
been making motor boats since 1979.
M&M Yachts: Aquasail
• Exclusive dealers to Riva yachts, often known as ‘pride • Founded in 2004 by Shakeel Kudrolli, India’s premier
of Ferretti group. yachtsman.
• Aquasail has established itself in the market by forging
Sea Ray
several tie ups with some of the world’s best brands,
• A brand of pleasure boats owned by the Brunswick bringing a range of dinghies, power and sail boats to
Corporation. India.
• It was founded as an independent company, Ray • The brands that Aquasail represent are the World’s
Industries, in 1959 in Detroit, Michigan by C.N. Ray. leaders in their categories like Laser Performance,
That company was bought by Brunswick for $350 Hobie Catamarans and Kayaks, NeilPryde Windsurfing
million in 1986. and Cabrinha Kiteboarding. T
• At the time, the purchase made Brunswick the largest • he highly desirable Beneteau with its sleek French
pleasure boat producer in the world. design and luxurious interiors is the ultimate style
statement in sailing yachts & powerboats.
Marine Solutions West Coast Marine
LEADING YACHT DEALERS
• Established in 2001, Marine Solutions is India's first • The company started in 1994, it has 156 employees,
professionally managed company dedicated to the enjoys 75% market share in servicing the yachts and
leisure boating industry. 30% in sales.
• Represents premier international brands in every • The company focuses more on service as they are
category of the boating business in India. Some models managing 110 yachts as of now in Mumbai.
include Ferretti Yachts, Custom Line and Mochi Craft • Company operates on backward integration model i.e.
among others they create their brand name through after sales
• Marine Solutions has sales and service offices in service they provide to their customers.
Mumbai, Goa and Kolkata; engine workshop in Cotton • They also provide yacht financing in association with
Green, Bombay; and boat yard in Mora, 15 minutes by Yes Bank. Majesty Yachts, North Star, Hanse, Silver
speed boat from Mumbai. Craft are few brands which the dealer caters to.
• Offers clients exclusive service at the Panjim Yacht
Station in Goa and at moorings off the Gateway of
India in Mumbai.
Aquamarine Services Infinity Yachts
• The company is exclusive distributors of U.K based • Infinity Yachts is a division of Infinity Group.
Princess Yachts in India. • The Group, through its division Infinity cars has a
• Provides a seamless ownership experience for proven expertise in dealership and services for high
customers including boat selection with tailor made end, lifestyle vehicle brands.
specifications, registrations, crew, management and • Infinity Yachts represents Maxum (entry level sports
maintenance. cruiser) and Sealine (sports cruiser & flybridge) which
• Offersluxury charter services on Princess Flybridge belong to Brunswick and Aicon (luxury motor yacht)
yachts and fractional ownership programs on a range from Italy. These brands are among the global leaders
of Princess Yachts. in their size segment.
Larson Boats Ocean Crest Marine
• Larson Boats founded in 1913 deals in the manufacture • Ocean Crest Marine currently has outlets in Dharamtar
of the most affordable and dependable boats. creek and Revas port in Mandwa.
• Larson offers 24 models ranging from 18' to 37'. • A showroom in South Mumbai is also in the offering.
• Sorenstam (Dadar, Mumbai) is the dealer taking care of
its sales in India.
REGULATORY FRAMEWORK
Government policy
REGULATORY FRAMEWORK
→ Indian Pleasure boat industry is covered by Inland Vessels Act
→ As there are no specific rules and regulations designated for pleasure boats in
India, the owners face regulations applicable to carriers or cargo vessels.
→ The Cruise Shipping Policy (Ministry of Shipping) was approved on 26th June,
2008, aimed at
• making India a cruise tourism destination with state-of-the-art infrastructure and
other facilities
• to attract the right segment of the foreign tourists
• to popularize cruise shipping with Indian tourists;
Registration
→ Registration is one of the most important aspects of yacht ownership,
mandatory for motor boats
→ Any vessel which has provision for sailing does not require registration by
law, however registration is practiced in all cases for easy navigation.
→ Vessels under 15 tonnes have been exempted and thus do not require
registration with any authority.
→ Commercial liners are registered with the Director General of Shipping and
smaller coastal or inland water vessels are registered with the respective
State Maritime Boards
According to Daily News Analysis the total no of boats registered till 2007 was 269 an increase
of 73 over previous year’s 196. However primary sources estimate that approximately 120
boats are sold every year, which shows that not all are registered.
REGULATORY FRAMEWORK
Maharashtra Maritime Board
→ Maharashtra Maritime Board is the nodal agency that takes care of the
regulatory and developmental framework of the state's maritime activities.
→ The board has taken a number of initiatives - development of the marine front
including setting up of several cargo jetties, ferry wharfs, larger port terminals,
inland water transport system, shipyards etc
→ MMB ports which are supported by 400 employees across five regional
offices. presently handle 10 percent of the total cargo handled by minor ports in
the country.
→ As boats are not compulsorily registered with any authority, there is no
checking of the log books, verification of the men working on it.
Import Duty
REGULATORY FRAMEWORK
→ Imports of Yachts and other vessels for pleasure or sports attract
Custom Duty at a rate of 34.13%.
→ However, when the owner shows it as a tool to business, the custom
duty is zero.
Taxes
→ Mumbai, which has the highest concentration of yachts in India, levies
5.5% Octroi on yachts and pleasure boats.
→ There is no Octroi in Goa.
The Yachting Association of India (YAI)
INDUSTRY BODIES
→ Formally constituted on 15 May 1960
→ Recognized as the governing authority for sailing, windsurfing, motor boating,
powerboat racing and personal watercraft, at sea and on inland waters in India
→ Affiliated to the International Sailing Federation (ISAF), which is recognised by the
International Olympic Committee (IOC) as the governing authority for sailing
worldwide
→ Currently 14 class associations affiliated to the YAI
→ Currently 40 clubs affiliated to the YAI, spread over the various parts of the
country.
Indian Olympic Association
→ IOA the apex Sports Organization of Olympic Sport in the country
→ Each Olympic and Non-Olympic Sport has a Federation at the National level
and is affiliated/recognized to/ by IOA.
REGULATORY FRAMEWORK: INDUSTRY BODIES
The Royal Bombay Yacht Club (RBYC)
→ Founded in 1846, holds its importance in terms of the registrations and services
offered.
→ The total no. of boats registered with them was 185 of which speed boats were the
dominant category
Till April 06 April 06-Dec 08
80
70
60
34
50
40
30
15 29
20 38 9
10 17 20
10 12
0 3
Sailing Yachts Speed Motor Speed Motor Large motor Dhow Class Sail Small boats
Boats>31 ft Boats<31 ft Boats
→ The RBYC has what's called a Seabird Class of Boats and their sister club,
the Colaba Sailing Club has a Lightning Class of boats..
Source: Royal Bombay Yacht Club
DEMAND POTENTIAL
DEMAND POTENTIAL
Demand according to the present scenario
→ The potential demand for yachts and pleasure boats in India over the next 10
years is estimated by two methods:
→Growing universe of the individual buyers
→Yachts as a part of the expanding luxury market
Growing universe of Individual buyers
3 crucial components comprising the universe:
→HNIs
The HNI population as of December 2007 stands at 0.12 million, growing at a CAGR of 19% p.a
→CEOs/MDs
Universe is limited only to the CEOs and MDs of top 100 BSE listed companies earning over Rs
10 million a year. This segment has been growing at 22%p.a. since last three years (2006-08).
→BOLLYWOOD CELEBRITIES & SPORTSPERSONS
This section of the universe is pegged to grow at a CAGR of 20% p.a.
→The total size of the universe as of 2008 was 0.120 million.
BUYERS
DEMAND POTENTIAL: GROWING
→ According to industry sources, approximately 120 boats are sold every year, indicating that only
0.1% of the universe buys boat every year.
Year HNI CEOs/MDs Bollywood Total size of the Market size in
(growing at a growing at a celebrities & universe No. of Boats
CAGR of 19%) CAGR of 22%) sportspersons (No.) each year (0.1%
(growing at a of universe
CAGR of 20%) buys boat every
year)
2008 120,000 77 288 120,365
2009 142,800 94 346 143,240 143
2010 175,644 115 415 176,174 176
2011 216,042 141 498 216,680 217
UNIVERSE OF THE INDIVIDUAL
2012 265,732 171 597 266,500 267
2013 326,850 209 717 327,776 328
2014 402,026 255 860 403,141 403
2015 494,492 311 1,032 495,835 496
2016 608,225 380 1,238 609,843 610
2017 748,116 463 1,486 750,066 750
2018 920,183 565 1,783 922,532 923
Total market potential over 10 years 4,312
The yacht industry would be able to sell approximately 4300 boats over a decade
(2008-2018).
EXPANDING LUXURY MARKET
DEMAND POTENTIAL: YACHTS AS A PART OF THE
Yachts as a part of the expanding luxury market
→ Luxury goods market in India was pegged at USD 4.35 billion in 2006 which is expected to triple
to 14.35 billion in 2010.
→ According to Daily News Analysis the total no of boats registered till 2006 was 196.
→ As per primary research 95% of the boats are sold for luxury purposes, which mean that 186
boats cater to the luxury market.
→ Given the value of the luxury goods market in 2006 and assuming the average price of boat to
be Rs 5 million, the share of the yacht industry in luxury goods market is estimated to be
0.54%.
2006
No. of boats in the market Value in Rs million (taking Value in USD million
until 2006 average price to be Rs 5 (taking average exchange
million) rate as 40 Rs per US$)
Yacht industry 186 931 23.275
Luxury goods market 4,350
(Source: The Economic
Times ATKearney India
Luxury Review 2007)
Share of the yacht industry in luxury goods market (%) 0.54
The luxury goods market is pegged to reach US$ 14.35 billion in 2010
EXPANDING LUXURY MARKET
DEMAND POTENTIAL: YACHTS AS A PART OF THE
Using the share of the yacht industry in luxury market as obtained from 2006
data
The estimated size of the luxury yacht market in 2010 would be US$ 71.75
million, which translates into a total of 574 boats in 2010
Year Total no of boats in
the market
2006 196
2007 256
Assuming a similar trend to continue 2008 334
2009 437
for the following eight years, the 2010 574
total no. boats in the market is 2011 750
projected to touch approximately 2012 979
4,800 2013 1,279
2014 1,670
2015 2,181
2016 2,848
2017 3,720
2018 4,858
Considering both the methods, an average figure of 4500 boats seems
to be a realistic estimate for the year 2018.
DEMAND POTENTIAL
Potential demand
Assuming that the industry is no longer constrained by infrastructure and regulatory issues,
Given the assumptions and taking into account increasing awareness, a realistic estimate
of at least 0.3% of the universe buying a boat every year seems possible.
Year HNI CEOs Bollywood celebrities Total No. of Boats
& sportspersons likely to be sold
each year
2006 79,318 52 200 79,570
2007 97,561 63 240 97,864
2008 120,000 77 288 120,365
2009 142,800 94 346 143,240 430
2010 175,644 115 415 176,174 529
2011 216,042 141 498 216,680 650
2012 265,732 171 597 266,500 800
2013 326,850 209 717 327,776 983
2014 402,026 255 860 403,141 1,209
2015 494,492 311 1,032 495,835 1,488
2016 608,225 380 1,238 609,843 1,830
Total number of boats (2009-2018) 12,935
Accordingly, the Indian market offers a potential for sales of around 13,000
boats over the next ten years.
CONCLUSIONS & RECOMMENDATIONS
Conclusions
CONCLUSIONS
→ Indian Pleasure boating and Yachting industry is still in a nascent stage of development, with
only about 300 boats registered
→ Currently reported to be growing at more than 100% per year, both in volume and value terms
→ The main factors driving the growth of the Indian market are rising income levels and the
increasing number of high/ultra-high net worth individuals in India; increasing popularity of cruise
tourism, and organization of boat shows, exhibitions and other promotional events.
→ Several new marinas are in planning/implementation state, which will a large extent address
the problem of inadequate infrastructure,
→ In terms of market presence of manufacturers, Italian companies have a 45% market share,
followed by UAE based companies (25%) and other European companies.
→ The growth of the market is constrained to an extent, due to lack of regulatory framework,
both at the central as well as state level.
→ Based on the present market scenario, with estimated sales of about 120 boats a year in the
recent years, the demand for additional boats over the next 10 years, i.e. 2009 to 2018 is
projected to be about 4500 numbers.
→ However, in a likely scenario of regulatory and infrastructure issues being adequately addressed,
the total potential demand could be 13,000 boats over the next 10 years.
Recommendations
RECOMMENDATIONS
→ Selection and appointment of dealers is the key to success
→ High visibility in the market, through active participation in boat shows, exhibitions
and trade promotion events is extremely important to create brand awareness.
→ While having a presence in key locations like Mumbai, Goa and Kochi is essential, it
is also important target non coastal cities as well
→ Offering a package of fractional ownership options or financing tie-up with a bank
can be a strong USP.
→ Provision of maintenance and boat management services
→ Developing the pre-owned yacht market could be a unique niche in the Indian
market. In world boating industry, about 42% of all new boats are sold by the first
owner within seven years.
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