New technologies and demand from wealthy consumers will propel revenue, but competition from manufacturers in China and Italy in particular will force many companies to downsize or exit the market
Los Angeles, CA (PRWEB) January 12, 2012
The Luxury and Mega Yacht Manufacturing industry designs and constructs private leisure boats that are 70 feet or greater. Industry firms cater to some of the world’s wealthiest individuals, building new yachts that feature advanced nautical technologies, precision engineering, and top-of-the-line style and amenities. Yacht builders in this industry compete with foreign shipyards and a growing number of used luxury yachts on the resale market.
Over the five years to 2012, the industry’s revenue is expected to decline at an average annual rate of 8.6%. According to IBISWorld industry analyst Kathleen Ripley, “the decline is largely attributable to a significant downturn in 2008 and 2009, resulting from the recession and the global financial crisis. Demand for luxury boats plummeted in response to heightened unemployment, declines in disposable income and reduced consumer sentiment during the recession. In response, the industry changed its manufacturing processes, which cut costs and increased production efficiencies. In 2011, revenue began to recover, and this trend is expected to continue in 2012.” From 2011 to 2012, industry revenue is expected to increase 7.1% to $939.8 million. The industry is benefiting from a swift recovery in spending among the wealthiest American households. Low interest rates and streamlined manufacturing operations have also supported industry growth.
Ripley adds that in the five years to 2017, industry revenue is projected to continue increasing at an average annual rate of 6.9%. “The key factors underpinning future increases in demand include the continued economic recovery, growing international demand and continued interest in nautical technology and super yacht construction. Over the next five years, industry profit margins are expected to expand as a result of steady increases in demand and more efficient production.”
The Luxury and Mega Yacht Manufacturing industry has a low level of concentration. The industry is fragmented and IBISWorld estimates that the top four major players account for less than 40.0% of US revenue in 2012. Market share concentration has decreased during the past five years as companies have faced financial hardship from the great recession, causing some to leave the industry. In the five years to 2012, the number of industry firms has decreased at an average annual rate of 3.2%. Many manufacturers that fell during the recession were taken over by financially stronger companies. In coming years companies will face changes in consumer preferences in addition to increasingly stringent safety and environmental regulations. External competition from luxury and mega yacht manufacturers in China and Italy will force many establishments to downsize or exit the market. Industry major players include Trinity Yachts Corporation, Westport Yachts and Christensen Yachts.
For more information visit IBISWorld’s Luxury & Mega Yacht Manufacturing industry in the US
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This industry designs and manufactures luxury yachts and super yachts. Luxury yachts included in the industry range from 70 to about 148 feet in length. Mega yachts, which are also referred to as super, typically start at 150 feet in length. The industry produces yachts that are powered by sail or motor.
IBISWorld industry Report Key Topics
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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