Buyer’s market as boatbuilders pin hopes on 2025

The shift in the macro-economic climate and inevitable slowdown in boat sales following the unprecedented boom of the Covid period is creating a complex picture for Germany’s boatbuilders as they navigate the ‘new normal’.

“The market for yachts has clearly changed from a seller’s to a buyer’s market again after corona,” Bavaria Yachts CEO Michael Müller told IBI. “This means that competition among brands and between dealers has become tougher again.”

The biggest current task for Germany’s second-largest series shipyard is to support its own global dealer network with what Müller describes as “clever marketing and good service”. The company will therefore “invest even more resources in these areas”. Bavaria Yachts recently changed its authorised dealers in the greater Berlin area. The long-standing Bavaria dealer Allert Marin is now followed by its Werder neighbour, aqua marin. The previous second-largest dealer, Keser from Berlin, is no longer an authorised Bavaria dealer.

Bavaria Yachts’ market assessment for the entire boating industry for 2024 chimes with the consensus. “The many crises worldwide, rising interest rates, high energy costs and high inflation in some countries have noticeably weakened the propensity to buy in many markets.”

Cost factor Inflation rate falls again

“Other markets are still doing very well, but even there demand is no longer at the level of 2021 or 2022.” For suppliers and shipyards, this means adapting their capacities to the new situation and making production even more efficient. Bavaria does not specify which countries are particularly affected.

In Germany the inflation rate has fallen noticeably in recent months – measured as the change in the consumer price index (CPI) compared to the same month of the previous year – was +2.5% in February 2024 compared to the same month of the previous year, according to the Federal Statistical Office.

Importantly for the manufacturing industry, even energy products became cheaper, by 2.4% compared to February 2023. In the last German report in 2023, shipyard bosses cited high energy costs as a key price driver. According to Destatis, the inflation rate in Germany was still +2.9% in January 2024 and +3.7% in December 2023 compared to the same month in the previous year. The last time the inflation rate was lower than February 2024 was in June 2021 (+2.4%).

“Weather improvement” expected for 2025

At Bavaria Yachts, capacity utilisation is currently “below the level of the coronavirus years, as expected”, with a correspondingly favourable time frame for potential buyers. “The delivery times for most of our models are six months on average” and therefore back to pre-corona levels, explains CEO Michael Müller.

“For completely new models such as the Bavaria C46, which has only just gone into series production, it can take 12 months.” Together with the Bavaria C38, C42, C50 and C57, Bavaria has “an extremely competitive fleet on the market” in the sailing yacht segment. In line with Bavaria’s long model life cycles, the Vision 42 sailing yacht, which was launched in 2012, rolled off the production line in Giebelstadt for the last time in January 2024. The company also feels “well equipped for 2024” in terms of motorboats, where the range has been strengthened with the Bavaria SR33 and SR36.

Companies that reef their sails now will survive the strong winds in 2024 unscathed - Michael Müller, CEO Bavaria Yachts

“In the 2022/23 financial year, well over 700 yachts were produced, with a very good earnings situation. The proportion of Bavaria’s over 40ft increased significantly,” says Müller.

Bavaria Yachts expects “a noticeable improvement in the weather” in 2025 – meaning an improvement in the economy. “In nautical terms, you might put it like this: companies that reef their sails in good time now, thanks to the prudent seamanship of the crew on board, will survive the strong winds in 2024, with probably a few heavy gusts, without any damage,” Müller says.

Hanse Yachts to exit stock exchange?

Hanse Yachts AG, Germany’s largest boatbuilder headquartered in Greifswald, has announced its intention to stop trading its own shares on the Frankfurt Stock Exchange.

The majority shareholder of the company, which holds 79.4% of the share capital, is the Munich-based investment company Aurelius. Most recently, the company – which says it specialises in complex investments with operational improvement potential – announced the acquisition of cosmetics manufacturer The Body Shop International Limited in November 2023.

As part of the termination of trading, HY Beteiligungs-GmbH, an Aurelius Group company, is offering shareholders the opportunity to purchase the company’s shares at the “weighted average domestic stock exchange price” of the company’s shares over the last six months, as determined by the German Federal Financial Supervisory Authority (BaFin).

In an interview with the website boersengefluester.de, which specialises in financial reporting, Hanjo Runde, CEO of Hanse Yachts AG, explains the move. The very good results had not been reflected in the recent share price development. The stock market had also not been able to fulfil expectations with regard to the most recent capital increases.

“Ultimately, this no longer justifies our annual expenditure of more than half a million euros, which we have to spend on the stock market listing,” said Runde on 6 March. “This ties up considerable personnel capacities without contributing to the added value of Hanse Yachts.”

Expected loss for some shareholders

In the meantime, shareholders have received an offer of €2.67 per share. In practice, this means a loss for long-term investors who were hoping for a price gain. Three years ago, Hanse Yachts shares peaked at €6.45, and a year ago they were still at €3.45. At the end of 2017, the share price stood at €10.91 and has not recovered since. In the relevant small investor forums, the move by the main investor ahead of the Annual General Meeting planned for 7 May in Greifswald has been met with widespread disapproval.

Group-wide incoming orders plummeted from €245.5m in the previous year – by almost 55% to around €111.6m, according to the 2022/23 annual report. This means that the reporting year was “just below the pre-corona level (2018/19: €118m)”. The company generates its largest turnover in Germany, followed by the USA and France.

At the same time, Hanse Yachts said it was able to “implement the significant price adjustments of up to over 40% for individual models on the market since the beginning of the previous financial year”. Further new developments and facelifts are “in preparation” for the current and coming financial year, according to the annual report.

Small shipyards well positioned

The Sirius shipyard, which specialises in the production of high-quality deck saloon sailing yachts, cannot see any economic downturn for its own business. The company is in the fortunate position of being able to serve a niche market with highly sought-after boats in which “demand may be subdued, but does not appear to be abating”. The fact that the boats can be customised also helps the boatbuilders from Plön in Schleswig-Holstein.

The smaller models are “already fully booked for the next two years”, says shipyard boss Torsten Schmidt. “Anyone who orders a boat today will receive it in April 2026. For our large model, we have also allocated all slots for 2026. A boat ordered today would not be delivered until June 2027.”

In addition, Sirius Yachts is “gently increasing the output” of its own production, a significant proportion of which is exported abroad. Sirius Yachts sells its boats internationally without a dealer network, which allows it to compensate for fluctuations in different markets. Schmidt: “Our order books are still full and we firmly believe that this will not change.”

However, if you listen to the shipyard boss, further growth is not so easy. “Expanding our unit numbers would only go hand in hand with expanding our capacities. But good skilled labour is hard to find and boatbuilders are more in demand than ever.”

Torsten Schmidt takes a critical view of the sharp rise in end prices for boats and names the cause: “All shipyards are struggling with rising supplier prices, which are also pushing prices for new yachts into unprecedented spheres. New boats are more expensive than ever before.” This could backfire, even for a luxury good like boats. “At some point, a level will be reached where customers say: we wanted to treat ourselves, but it’s out of proportion.”

New Sterk brand offsets decline in RIBs

MS Marine not only produces fast motorboats under its own motorboat brand Sterk, which was launched in 2023, but also claims to be one of the leading manufacturers of aluminium RIBs and foldable inflatable boats, including as an OEM for big names. MS Marine also owns the aluminium RIB brand ZAR mini.

The ethos of the strategy is risk minimisation through diversification. The different boat brands in different segments reduce the entrepreneurial risk at MS Marine. Only boats over €150,000 are doing particularly well at the moment. Anything under €80,000 is only sold, Sterk says, as an “exception”.

Company boss Milan Sterk says launching the Sterk brand when it did was fortuitous. “As we launched a new product with great growth potential in good time, this is helping us to make up for the decline in sales in the inflatable boat sector.” According to Sterk, the order books in the high-price sector are still well filled.

With two new Sterk 31 models – the WetBar and the Cabin model coming to boot Düsseldorf 2025 – he expects “a significant increase in sales” this year. From 2025, MS Marine also anticipates an increase in sales of inflatable boats, “so that we will then grow cumulatively,” Sterk explains to IBI.

We see a stabilisation, or rather levelling off, of demand. The still high interest rate policy is also weakening sales

Demand to pick up?

At Werder-based boat manufacturer B1, the Aqualine brand is “now back to normal”, says company boss Frank Schaper. “Due to coronavirus, we had more orders and longer delivery times, which we have now processed.” Many of the boats ordered during the boom years had upmarket fittings, which extended the construction times.

At the moment, he sees a “stabilisation, or rather levelling off, of demand”. The “still high interest rate policy is also weakening sales”, and market saturation is also playing a role, Schaper told IBI. Nevertheless, customer activity is developing “positively”. According to the B1 boss, the higher prices for travelling due to inflation are benefiting water sports.

Schaper believes that his company, which builds day cruisers and cruising motorboats, is well equipped for the near future. In addition to new model variants in the pipeline, the company’s handcrafted character is something that sets it apart from mass-produced boatyards. “We can respond to customer wishes in a much more individualised way,” Schaper claims.

Europe Marine from Budenheim on the Rhine is an authorised dealer for several boat brands as well as a manufacturer of the US-inspired brands Viper Powerboats and Auster Boats. “The order books for our own brands are well filled,” explains Yanick Nürnberger. “We only have a few existing boats to fall back on before the summer.”

Europe Marine expects demand to pick up in the medium term. “We believe that the market will recover from the recession. As the base rate is not rising any further and our inventories have been reduced well, we are positive about the future.” It is now becoming clear who has managed cleverly – and therefore has enough money for investments.

“We believe that the market will clear up,” says Nürnberger, “as customers tend to buy from companies with many years of experience.” Despite decades of market presence, some boatbuilders have not managed to survive economically. For example, the boat manufacturer Hellwig from Erkelenz went bankrupt in mid-2023. The manufacturer, which specialised in small, fast motorboats, was one of the pioneers of GRP boatbuilding in Germany.