Brazil’s boating industry has done an extreme- about face in the last five years. According to industry statistics, new-boat sales are down 30%-40% in the last year, following two previous years of declines. Some categories are worse than others, but every boatbuilder is feeling the pain.

Paulo Renha, president of Real Powerboats, said that 2010 was a record year for his company. In the last 12 months, he has had to lay off more than a third of his staff. “I’ve been in this business for 30 years, and while we’ve faced difficult times, I’ve never seen anything like the current situation,” says Renha. “I have no idea what will happen politically or to the economy over the next six months.”

The statistics for boat sales make sober reading. Acobar, Brazil’s marine trade association, reported production of only 92 units of domestic sailboats valued at $3.2m for 2014, with the importation of 18 sailboats valued at $2.4m. The number of sterndrives built in Brazil last year was 1,240 with a value of $386m, with 111 imported units valued at $26.1m. That is about half the number of units built in the country during the peak year of 2010. Smaller, outboard-powered boats did not do as badly as the other categories, with 2,350 units, valued at $245m, built in the country last year. “That was a nice lift in units but didn’t add much value to the overall equation,” said one analyst who knows the industry.

“The 50- to 60ft yacht segment experienced a large drop in the last three years,” says Jorge Nasseh, CEO of Barracuda Composites and vice president of Acobar, Brazil’s marine trade association. “That has impacted big domestic builders like Intermarine and Schaefer. The foreign manufacturers that built factories here in 2010 – Beneteau, Sessa, Azimut and Brunswick Boat Group – are better funded than their Brazilian competitors, but they won’t do much until they see renewed life in the market.”

Everyone interviewed for this story was depressed about the current situation, and almost baffled about how things that were going so well could have turned around so quickly. “It’s the same feeling as jumping off a cliff – a high one,” says Nasseh.

Note: This is an excerpt of the latest report on the Brazilian market that appeared in the October issue of IBI magazine. IBI Plus subscribers can download the full report from IBI Plus website.