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Page 12: of Maritime Reporter Magazine (February 1992)
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MEGAYACHTS (continued from, page 13) to very wealthyindividuals.A luxury tax may only marginally impact the decision of a multimillionaire who wants to purchase a yacht. Further, many U.S.-builtmegayachts are sold to foreign customers who are not subject to the luxury tax.
Key Players In
This Business Sector
Among the principal builders of megayachts are Broward Marine,
Christiansen Yachts, Burger/
Diaship, Denison Marine and West- port. Trinity Industries has devel- oped a presence in this market.
Hatteras has also moved into the megayacht sector—though its prin- cipal market focus continues to be on luxury yachts under 77 feet.
IMA's report, "Five-Year Outlook for the U.S. Marine Industry," con- tains additional information on the megayacht and other small vessel construction sectors. It includes a listing of megayachts delivered over the past three years. An assessment of construction and equipment re- quirements for ferries, passenger vessels, tugboats, inland towboats, barges, patrol boats, fishing boats and other small vessels is provided in the report. The 190-page report is available for $575. Included as part of the price is a market update to be issued next April. To order contact
IMAAssociates Inc., 600 New Hamp- shire Avenue, NW, Suite 140, Wash- ington, DC 20037; telephone: (202) 333-8501; or fax: (202) 333-8504.
Exhibit 3: U.S. Trade Patterns - Boat Building & Repairing
SIC 3732 (In 1990; in millions of dollars, percent)
EXPORTS IMPORTS
VALUE SHARE VALUE SHARE
Canada & Mexico 134 16.8 Canada & Mexico 94 33.6
European Community 316 39.8 European Community 36 13.0
Japan 163 20.6 Japan 37 13.4
East Asia NICs 22 2.6 East Asia NICs 82 29.3
South America 9 1.1 South America 3 1.2
Other 149 18.8 Other 27 9.5
World Total 793 100.0 World Total 279 100.0
TOP FIVE r.niiNTRiF$
VALUE SHARE VALUE SHARE
Japan 163 20.6 Canada 92 33.2
Canada 126 15.9 Taiwan 56 20.2
Italy 53 6.7 Japan 37 13.4
Spain 48 6.0 Singapore 17 6.0
United Kingdom 47 5.9 France 11 4.1
Source: U.S. Industrial Outlook 1992
Exhibit 2: Trend in U.S. Pleasure Boat Exports 1987 1988
Source: U.S. Industrial Outlook 1992 1989 1990 1991 1992
Exhibit 4: 80-Foot+ Motor Yachts Delivered by U.S. Builders (1989-1991)
YARD NO. YARD NO. YARD NO.
Admiral Marine 2 Derecktor 2 Monterey Marine 1
Angus Yachts 1 Fantare 4 Palmer Johnson 1
Barattucci Yachts 1 Freeport Shipbuilding 1 Swiftships 1
Broward 22 Hatteras 4 Tempest 3
Burger 9 Infinity Yacht 1 Trinity Yachts 1
Christensen 8 Jones Goodell 1 Westport 6
Delta Marine 4 Knight & Carver 1 Workboats Northwest 2
Denison Marine 7 Lydia Yachts 1 Total Delivered 84
Detroit Diesel/DDEC. 35 GM ..
Caterpillar 16 MTU
PROPULSION TYPE 10 DeutzMWM 9 MAN B&W ...
Cummins.
NA
HULL MATERIAL
Aluminum 47
Steel/Aluminum 1
FRP/Composite ..8
FRP 5
Fiberglass 11
Fiberglass/Airex...6
Other.
Major U.S. Yacht Builders Discuss
Future Construction Opportunities
Maritime Reporter Staff
The 97-foot, Gilgenast-design Leda was the first megayacht built by Trinity Yachts, a
Gulfport, Miss., yacht builder.
The yacht and pleasure boat build-ing industry, which showed sig- nificant expansion over the last few years, remains one of the brightest sectors of the U.S. marine industry; one in which the U.S. actually en- joys a favorable trade balance with
Japan and an export market.
Interviews conducted by MARI-
TIME REPORTER with the leaders in the yacht-building industry re- vealed that, despite the enactment of the 10 percent luxury tax, which severely hurt some U.S. builders, the yacht construction sector should remain a significant growth market in the U.S. over the next several years. In particular, the megayacht market should prove to be lucrative for many U.S. builders who have the facilities and craftsmen to construct these detailed-intensive vessels.
Already about 40 megayachts are under construction or on order in the U.S.
As of press time, an amendment repealing the boat luxury tax was expected to be attached to the first appropriate tax vehicle when Con- gress reconvenes. Elimination of the luxury tax and predicted economic upturn in the spring could well cause yacht sales to rebound to late 1980 levels or higher.
Leslie Lallande, project manager for Swiftships, Inc., at its Site 1 location, said his company, like other
U.S. builders, has been hurt by the boat luxury tax. "We haven't signed a contract since the tax," said Mr. Lallande. "It's had a dramatic impact on the indus- try," he stated. Mr. Lallande said that the boat luxury tax in combina- tion with the economic recession makes people more conservative, either looking more to the second- hand market or to a builder that is well-established in the megayacht sector. "We are at the entry level stage," he said, "and its been [the tax] a definite roadblock."
Randy Rust of Westport Ship- yard, Inc., which has been active in building both commercial and plea- sure boats for the past 15 years, also agreed that the tax hurt yacht sales. "Since the luxury tax has taken ef- fect, we have made no direct retail sales and our East Coast represen- tative has made only one sale which is subject to the luxury tax," stated
Mr. Rust. "While the economy in general has had some effect, with repeal of the luxury tax, I expect we'll see an increase in yacht sales."
According to Bill Shakespeare, di- rector of marketing for Knight &
Carver Custom Yachts, Inc., of San
Diego, his company's gross sales have plummeted since the excise tax on vessels costing over $100,000 was announced. "At that time," said Mr. Shakes- 14 Maritime Reporter/Engineering News