The imminent unveiling of the new C65 sailing yacht – the largest boat Bavaria has ever built – is a stake in the ground for the German builder. The bigger sister of the C57, launched at the Düsseldorf boat show in January, it’s the most potent symbol yet of a builder undergoing a resurgence.
“The C57 and the R40 motoryacht we launched in 2016 are the seeding points for growing the range,” says company CEO Lutz Henkel. Henkel took the reins in January 2015 following a challenging couple of years for the builder. His predecessor, Constantin von Bülow, who remains on the board at Bavaria’s owners, Anchorage Advisors and Oaktree Capital Management, had steadied the ship in the wake of the global downturn – now it’s Henkel’s turn to define just how the builder, which celebrates its 40th birthday next year, will capitalise on a new phase of growth. But the evolution of the largest serial boat producer in Germany is about much more than simply embracing the need to build bigger boats – Henkel and Bavaria are leveraging the business to another level across a number of fronts.
Sitting in his office in Bavaria’s Giebelstadt facility, a two-hour drive from Frankfurt, Henkel reflects on those seeds of change: “We need to produce for our customers – Bavaria develops its clients over time; they were growing with us and then we would always lose them as they moved to larger boats. I heard that too many times.”
Bavaria’s bold vision was there for all to see at boot Düsseldorf, and not only in the lines of the Cossutti-styled C57.
Europe’s second-largest shipyard presented a total of 24 catamarans, sailing yachts and motor vessels over 4,000m2 of exhibition space in Halls 15 and 17. The Bavaria World stand in Hall 17 was the largest single-site exhibition stand at the show, helping generate more than 160 orders for new yachts – a record for the builder. As well as the new flagship, there was a world premiere for the Bavaria R40 Coupe motoryacht, while the Bavaria E40 Fly motoryacht and catamaran were presented for the first time at a German show. Visitors were also given a glimpse of designs for a new Bavaria R55, due for launch this autumn.
The sales numbers undoubtedly vindicate the new model investment, but the show also provided a crucial psychological boost for the builder. Post the crisis and following the death of the company’s founder Winfried Herrmann in 2015, Bavaria had undergone something that might best be described as a crisis of confidence.
Herrmann’s dream, when he founded Bavaria in a former uPVC window factory in 1978, was to bring serial mass production to the boat business. “Henry Ford was the inspiration, his theories on assembly production, the bible,” says Henkel, who took the helm at the boatbuilder just months before Herrmann’s untimely death at 71. “He implemented Ford’s mass production ideas perfectly.” Few would argue. Bavaria’s Giebelstadt facility, which employs 800, is a world away from most boat yards – the scale and levels of mechanisation and robotics redolent of the automotive world that proved such inspiration to its founder. At its peak in 2006/07, Bavaria was building over 3,000 boats a year.
Getting production right is one thing, making sure those advances translate into brand equity is another.
“The big question we faced,” admits Henkel, “was how do we make the brand noticed, how do we make Bavaria a brand to be desired?” Henkel is rueful about past marketing campaigns that pitched the builder as a budget proposition, believing it sold itself short. “We have to remember we are a luxury product – our boats are the price of an average family home, or a garage full of high-end sports cars. We have an obligation to our client to provide the most luxurious product they can get for what they want to pay.” In replicating Henry Ford’s assembly line ethos, Bavaria undoubtedly pioneered serial mass boat production, but just like the car manufacturer, it’s fair to say it’s suffered at times from an image problem. “There was a time years ago when no one wanted a Ford,” says Henkel, who admits that Bavaria has not been as proactive as it could have been instilling a sense of pride around the brand. Processes and efficiencies are vital to making a better boat, but so too is passion and feeling and the loyalties they invoke both in the consumer and employees.
That’s why this year’s Düsseldorf show was about much more than selling boats – it was about selling the Bavaria brand and reminding the world of its ‘Made in Germany’ pedigree. The charm offensive is working. During the show visitors and customers were surveyed about their feelings for the brand, notably which car maker they most associated it with. “In the past we’d had names like Skoda and Vauxhall Opal, leaning towards Volkswagen. This year’s event was a real eye-opener,” says Henkel. “The feedback was predominantly names like Audi, Mercedes, BMW.” In 2015 the builder held a VIP night during the show which attracted 50 customers and potential clients. This year’s event saw over 700 people in attendance.
Henkel continues: “Production efficiency is at core of what we do, and we’ll continue that position, but we’ve changed the way we build products for our clients.” All new Bavaria models are vacuum infused, while the rest of its portfolio is being transitioned from traditional hand lay-up over the coming months. “The vacuum method cuts down the amount of resin used by around 30% and takes 30% off the weight of the boat. It also cut emissions and makes the boat stiffer too,” Henkel explains.
It’s also using modular ‘big block’ construction methods – where previously the interior was built in the hull and the deck glued on top – now the interior is constructed in modules that when complete are lifted into the hull in sections. The technique not only speeds up production, it also allows for making maximum use of all interior volumes whilst improving on the quality of fit and finish. It’s also a hit with workers on the assembly line, saving them from scrabbling around on their knees in a cramped hull for hours on end.
“The vacuum method cuts down the amount of resin used by around 30% and takes 30% off the weight of the boat.”
The factory floor at Giebelstadt incorporates four production lines – one each for large and smaller models, in power and sail. In a sign of what’s to come, and just how Bavaria continues to push the envelope – the assembly line for its E and R series is subdivided into three lines that work in parallel – one track for the interior module production, a second for the hull and the third for the deck. Components on each track move in unison. In theory, from an order placed at the dealership, Bavaria can have the finished boat ready to be shipped to its new owner in less than 12 weeks. In theory. The fact is it would join a queue, with build slots currently booked into late autumn for most models and into 2018 for some. The yard is now looking at running a second shift in the new year to cope with demand.
Keeping up with that demand is not the only challenge. Finding skilled labour is a constant battle in this part of Würzburg that already enjoys one of the lowest unemployment rates in the country, thanks to the numerous automotive and clothing industries that have made their home in the district.
Today Bavaria is building a little over 1,000 boats a year – some way off the 3,000-plus of before the crisis – but that is in part not just a reflection of the new order post 2008, but also in the shifting product mix as it meets the demand for bigger boats. In 2007 the average boat size was 36ft, today it’s 46ft and the boats are packed with much more kit.
The C57 has approximately twice as much product and equipment inside as its predecessor, the Cruiser 56 that was launched in 2013, but has the same build time, another indicator of just how Bavaria continues to tighten the screw on efficiency. It’s telling that the volumes of equipment and raw materials on the factory floor are approximately the same now as they were a decade ago despite only a third the number of units leaving the factory.
Even badging for the models has been refined, bringing it more in line with the automotive style that has become the Bavaria benchmark. The ‘Cruiser’, ‘Vision’ and ‘Virtess’ lines have given way in the new models to a single letter (‘C’, ‘E’, ‘R’, ‘S’) to signify the family, followed by its length.
Needless to say, the efficiencies of Giebelstadt have been exported to France and the Nautitech yard that was acquired by Bavaria in 2015. Back then around 15 sailing cats a year were coming out of the Rochefort facility. Today production stands at 90-plus boats from 40ft-54ft. A prototype is being worked on for a new Nautitech 47 Powercat – with the first boat due for launch at La Grande Motte next year.
The design of the latest models is key to the brand’s new found impetus. J&J Design are behind the new R40 & R55; the E40 and E34 are by Vripack and iYacht respectively, while Cossutti in Italy are responsible for the C57. Henkel takes inspiration from his previous role as CEO at Salona Yachts. “Those guys were doing something right. They had models that lasted, were so well designed they only had to tweak them every couple of years. They had boats that evolved. We have to evolve into the future. Our customers are conservative in nature, we don’t want to jump into a new look or design. If you jump you risk your customer not jumping with you. We have to go step
A core component of the new models, and what Bavaria believes will be its trump card, is their functionality. “We want to be a leader in technology,” the CEO says, with the drive toward full ‘connectivity’ the principle goal. The C57, which features the latest Navico technology, is shaping the market, Henkel believes. Through digital switching the owner of a C57 can control nearly all the functions of the boat from each helm station through the chartplotter. In the future a Bavaria owner will be able to monitor a myriad of features onboard, from tank levels to battery status, via their mobile phone.
“Forty years ago our ‘electronic package’ was cutting out a hole and putting in a car radio! You can’t do that anymore. Sure ‘connectivity’ causes a lot of complications, but it’s about mastering the challenge. You look at the advertising for the BMW 5 series. The connectivity of the car is pretty much all they advertise. We’re not reinventing the wheel. We just have to combine the elements with our production efficiencies to create one package.”
With the C65 already in the pipeline, just how big will Bavaria go? “We plan to go a lot bigger, but we’ll always be sub 100ft – we’ve no interest in fighting a battle we would lose by going beyond that.”
The CEO believes the global market for boats to be relatively flat at present and that the growth it’s currently enjoying is from taking market share. According to Henkel, Europe is doing well and sales in the US are robust after a difficult 2016 that saw the builder part company with its then US dealer. It’s also seeing slow but steady development in China, a market that it’s made a concerted effort alongside its Chinese dealer, to develop over the past two years.
An experienced sailor, Henkel admits to being inspired following a recent visit to Nautor’s Swan. It wasn’t just the attention to detail that sets the Finnish-builder apart, but more generally the ‘soft’ power the brand evokes, the loyalties among customers and staff old and new – the sense of family. It’s this element of pride Henkel is keen to nurture in today’s Bavaria.
Bringing its disciplines to a new sector of the market will be a challenge, but it’s a prospect Henkel looks like he relishes. The builder recently took its dealers on the water in the C and R series, the brief being to highlight the positives, to make sure those features make it into future models. “We keep the good things and work on that which needs improving. The C65 will improve the level of the C57 and so on.”
Entering the semi-custom sector is a major step for the process-driven builder. Henkel is keenly aware that being price driven is a fool’s errand. Today’s builder has to offer the boater an experience and level of functionality that they have come to expect in other walks of life. Highly efficient production, clever design and cutting edge technology, are key, but so too is passion. If Henkel and Bavaria get that mix right, then the prospects look bright.