Aug | Sep 2022
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>> Build something different, exciting and the buyers will come
IT’S TIME TO take stock. In our August/September issue 12 months ago, I set out my reasons in this column why bust would not follow the current boom cycle as our industry’s tradition would have it.
Fast-forward and supply-chain woes that were already beginning to bite back then have been exacerbated by conflict in Ukraine and further China lockdowns contributing to a perfect storm of rising interest rates, inflation, and fuel prices, recruitment headaches and a darkening global economic picture generally.
The party’s over, but will we suffer the hangover the industry’s been hardwired to expect? Our annual review of the European market gives a timely snapshot of sentiment on the ground. The consensus among dealers is that demand has softened for boats at the smaller end of the market – which one might expect, correlating as it would with surging prices and costs of living across the continent and ebbing consumer confidence.
The bigger end of the market remains buoyant – longer lead times helping shelter that sector from the economic weather for now.
“A reset is coming, for sure…
in Europe, the storm could hit landfall next summer…
the battlegrounds will be for profit.”
This is not 2008, however – the picture is more complex and on the positive, more weighs in our favour than post the financial crash. This time around, the boom has been fuelled at both ends – in the last two years we have experienced unprecedented demand across all size of boats, both sail and power.
Lockdowns look unlikely to return, to the West at least, but it’s apparent Covid is going nowhere, and those sentiments – the priority for leisure time and family, remote working, and a reconnection with nature – have all had time to bed in, and will help keep the number of new boaters experiencing buyer’s remorse to a minimum. After years of upheaval, the charter sector has rebounded strongly, proving there’s still a latent desire to get on the water.
The last two years has also seen escalating innovation as industry pivots to a more sustainable future. Build something different, exciting, and the buyers will come whatever the market conditions. Truth be told, the industry has been guilty in years past of nurturing a ‘me too’ market, brands herding, chasing a tighter circle of clients after bigger, more equipped, more expensive boats to build in margin, effectively papering over production inefficiencies.
A reset is coming, for sure – in Europe the storm could hit landfall next summer/autumn. The pressure on margins will undoubtedly take their toll – the battleground will be for profit. The last two years has been a massive learning curve for the industry. We have used the time wisely to diversify, innovate, to embrace new media to reach customers, and grow the base – the industry is hugely more resilient than in 2007, which should stand us in good stead for the coming uncertainties.
Ed Slack | IBI Editor
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