Boating/Pleasure Boating/Yachting Industry &

its Evolution in India

Italian Trade Commission, Mumbai

INDIA OVERVIEW

GEO

GRAPH

Y AND

COAST LIN

EGeography

• Total Area : 3.28 million sq km• Land Boundaries : 14,103 km• 29 States & 6 Union Territories

• Long coastline of 7,517 kilometers (4,671 miles)

– Indian Ocean on the south– Arabian Sea on the west– Bay of Bengal on the east

• The mainland coast consists of – 43% sandy beaches– 11% rocky coast including cliffs – 46% mudflats or marshy coast

POPU

LATION

AND

DEM

OG

RAPHICS

Population and Demographics

India is second most populous country in the world with a population of 1.17 billion Population growth rate is 1.548% Young country - 35% population under 15 yrs; 75% under 40 years Gender ratio- 933 females to 1000 males Literacy rate is 64.8% (53.7% for females and 75.3% for males). About one-fourth of the population (0.28 billion) lives in urban areas. National Language : Hindi, spoken by 33% population; 14 officially recognized languages English: widely used in business and everyday life

Age Group Population (est. for 2010) % share

0-4 126,352,821 10.74%

5-9 146,795,878 12.47%

10-14 142,826,236 12.14%

15-19 114,648,126 9.74%

20-24 102,691,195 8.73%

25-29 95,436,173 8.11%

30-39 165,707,919 14.08%

40-49 118,001,662 10.03%

50-59 73,492,332 6.25%

60+ 90,789,656 7.72%

Total 1,176,742,000  

Source: Census of India

INCO

ME G

ROU

PING

S

Annual household income of Rs 1 million and above (> US$ 22,000 in nominal terms, and $ 115,000 in PPP terms)

Annual income ranging from Rs 0.5 to Rs. 1 million (US$ 11,000 to 22,000 in nominal terms, and $ 58,000-115,000 in PPP terms)

Annual income of Rs 0.2 -0.5 million (US$ 4,500-11,000 in nominal terms, and $ 23,000-58,000 in PPP terms)

Families living in poverty conditions, with very low

disposable income

Income wise distribution of households

Source: NCAER - India’s premier economics research agency

INCO

ME G

ROU

PING

SNo. of households with income > Rs. 1 million (in major cities)

Source: Skyline India, World Wealth Report, prepared by Merrill Lynch and Cap Gemini

High Net worth Individuals (HNIs)

→ India has over 120,000 HNIs

→ The average net worth of the Indian HNIs has gone up

to $3.6 million, compared to the global average of $4

million.

→ India recorded the fastest growth in the HNI population

worldwide in 2007-08, growing by more than 23%.

→ India also has over 1,080 Ultra-High Net worth

Individuals (individuals with an investible surplus

exceeding US$30 million), whose combined wealth was

estimated to be $ 116 billion at the end of 2007

• Per capita income in 2008-09 - Rs 31,278.

• Wealthiest cities: Mumbai, Delhi, Kolkata Chennai and Hyderabad / Bangalore

• 150,000 households with annual income > Rs. 5 mn (75,000 euros)

• 25% of population is below poverty line

IND

IAN ECO

NO

MY

Economy Profile (2008-09)GDP at Factor Cost (current prices)

US$1.072 trillion

Forex Reserves US$ 252 billionExports US$ 185.3 billionImports US$ 303.7 billionFDI inflows US$ 35.18 billion

• GDP growth average 8.8% from 2003-04 to 2007-08 (over 6% in 2008-09)

• Increasing importance of trade and external capital inflows. The share of merchandise trade increased to over 35% of GDP in 2007-08 from 23.7% in 2003-04.

• The 11th five year plan (2007-12) targets 8-10% growth per year for Indian economy.

PLEASURE BOATING & YACHTING INDUSTRY

PLEASURE BO

ATING

& YACH

TING

IND

USTRY

Yachts Nomenclature

A yacht is a recreational boat that covers two different classes of watercraft:

→Sailing Yachts:

• Sailing Yachts range in overall length from about 20 ft (6 m) to well over 100 ft (30 m).

• The motive force being the wind which makes sailing more economical and environmentally

friendly

→Power Yachts:

• Motor yachts typically have one or two internal combustion engines that burn diesel fuel

making it more expensive to operate than sailing yachts.

In western markets, yachts are classified according to 5 major categories:

Particulars Length Top speed

Sports & Utility Boats

Up to 40 ft 40 knots

Small Yachts 40-80 ft 25-30 knots

Super Yachts 100-200ft 15-40 knots

Mega Yachts 200-300ft 20 knots

Giga Yachts >300 ft

Due to the unorganized nature of the Indian yacht industry, the classifications are different:- Small Boats, Dhow class, Sail boats, Large Motor Boats, Speed motor Boats, Sailing yachts

Origin & Evolution in India PLEASURE BO

ATING

& YACH

TING

IND

USTRY

PLEASURE BO

ATING

& YACH

TING

IND

USTRY

Market size

As of 2008, 300 boats were registered in India:

120 luxury yachts & 150 speed boats

Almost 200 boats and about 50 yachts in Mumbai and Goa

Foreign brands had a dominant share

Now, approximately 120 boats are sold every year, of which more than 80% are

speed boats

Popular sizes range from 15ft to 35 ft in overall length.

Wide price range - from Rs 3 million for speed boats to over Rs 1 billion for super

luxury yachts

Current revenue estimated to range from Rs 1.5 billion to Rs 5 billion per year, depending on which types of luxury yachts get sold in the year

For instance, in 2007-08, a single Ferretti accounted for almost 50% of the value of boats sold in India

The industry is growing at more than 100% p.a. in value terms- Share of luxury yachts expected to increase over the years

IMPO

RTS

In 2007-08, Italy was by far the leading source of imports (with 24.4% share), followed by USA, UAE and other European countries.

Imports of Yachts and Other Vessels for Pleasure/Sports

(Value in US$ million)  2006-07 2007-08 2008-09

Italy 0.06 5.07 11.18

UAE 0.23 1.16 0.49

USA 1.01 2.54 2.38

France 0.22 0.85 1.62

UK 0.14 0.78 0.25

Germany 0.01 0.57 -

Others 0.99 9.99 1.82

Total 2.66 20.96 17.72

Source: Ministry of Commerce and Industry

Above data also supports the industry feedback that the demand for yachts in India has increased exponentially in the last two years

PLEASURE BO

ATING

& YACH

TING

IND

USTRY

→ Location is a key element and constraint in the development of yachting as a

national phenomenon in India

→ At present, Mumbai, Goa and Kochi are the only yachting destinations in India

Major destinations

• Biggest location for yachting in

India.

• Has a strong boating heritage with

three sailing clubs

• Natural harbor with miles of

sheltered coastline

• Geographical proximity to another

yachting hub, Dubai

• Prior to the boat show in

February/March 2007, there were

around 20-30 pleasure boats but

since then the number has increased

to more than 100.

• The maritime gateway for peninsular

India and one of the best ports in

Asia.

• Strategically located on the busy

international sea route

• 11 nautical miles from the Gulf-

Singapore-Far East route

• 70 nautical miles off Suez-

Singapore-Far East

• During 2009-10, more than 50 luxury

ships touched Kochi

• Goa is known as a “Tourist

Paradise",

• A firm favorite with travelers

around the world - 12% of all

foreign tourist arrivals in India.

• Close to Mumbai

Mumbai Kochi Goa

YACHTIN

G D

ESTINATIO

NS IN

IND

IA

PLEASURE BO

ATING

& YACH

TING

IND

USTRY

Marinas

Uneven sea and high concentration of pollutants, particularly sulphur, has made potential coastal suburbs devoid of any docking facilities for large ships or even water sports.

High political sensitivity, greater priority always given to fishermen for allocation of harbor space. →The best waters around Mumbai city have already been taken over by local fishermen and would require huge compensations to be taken over for marinas

No national or state level policy for marinas, anywhere in India, presents major risks for entrepreneurs who wish to develop marinas in India.

Absence of marinas is the biggest challenge and constraint before the Indian yacht industry.

People didn’t buy yachts because they never had a

proper docking place for their yacht

While no developer wanted to develop marina as they never

saw enough demand from boat owners.

Vicious circle

FACTORS FOR GROWTH

The Kochi International Marina

• India's first ‘world class’ Marina commissioned at Kochi in April 2010• Located between Kochi Marine Drive and Bolgatty Island• Built at a cost of Rs 82 million, designed and developed by Ocean Blue Marinas• Capacity: Currently, it has docking, storage, maintenance and other facilities for berthing

34 yachts. In the second phase, to be expanded to accommodate 50 yachts• Other facilities: Marina house (with 24 rooms, including 4 suites), a health club, caféteria

and recreation facilities, and a golf course

MARIN

AS AND

OTH

ER INFRASTRU

CTURE

Maharashtra Maritime Board has come up with a draft legislation on regulatory framework

required to set up a marinas in the state of Maharashtra.

The naval base off the Mumbai harbour may soon have a marina. The total cost of the project

is estimated to be Rs 18 billion.

Ocean Blue Marinas, which had set up a modern marina for the Mumbai boat show, has 15

projects in Goa, Kochi, and Chennai and along the coasts of Maharashtra and Gujarat.

A business tycoon from Goa is planning to build a 300-boat marina in Sancoale village, in

Mormugao Taluka, at the mouth of the Zuari River in Goa with an investment of Rs 1 billion.

Some serious recent attempts have been made to set up marinas in India

TOU

RISM PRO

MO

TION

• Tourism being aggressively promoted by Govt.• Foreign Tourist Arrivals (FTAs) increased from 2.38 million in 2002 to 5.11 million 2009• Foreign Exchange Earnings (FEEs) from tourism increased from Rs. 150 billion in 2002 to Rs.

549 billion in 2009• Niche tourism like heliport tourism, medical tourism, wellness tourism, adventure tourism,

cruise tourism and caravan tourism have been on the rise• Decline in FTAs in 2009 by 3.3% over previous year (world average decline 4.6%)

Year Foreign Tourist Arrivals (in million nos.)

% Change Over Previous Year

Foreign Exchange Earnings (Rs. In Billion)

Percentage Change Over Previous Year

Foreign Exchange Earnings (in Million US$)

Percentage Change Over Previous Year

2000 2.65 6.7 156.26 20.6 3,460 15

2001 2.54 -4.2 150.83 -3.5 3,198 (-)7.6

2002 2.38 -6 150.64 -0.1 3,103 (-)3.0

2003 2.73 14.3 207.29 37.6 4,463 43.8

2004 3.46 26.8 279.44 34.8 6,170 38.2

2005 3.92 13.3 331.23 18.5 7,493 21.4

2006 4.45 13.5 390.25 17.8 8,634 15.2

2007 5.08 14.3 443.6 13.7 10,729 24.3

2008 5.28 4 507.3 14.4 11,747 9.5

2009 5.11 -3.3 549.6 8.3 11,394 (-)3.0

CRUISE TO

URISM

• The Cruise Shipping Policy (Ministry of Shipping) was approved on 26th June, 2008, aimed at

– making India a cruise tourism destination with state-of-the-art infrastructure and other facilities

– to attract the right segment of the foreign tourists

– to popularize cruise shipping with Indian tourists;

• Tax exemptions for the cruise operators• The Ministry sanctioned Rs.145 million in

2008-09 to Cochin Port Trust for Cruise Tourism infrastructure development at Cochin Port

• increase in Cruise Arrivals• Mumbai Port handled 66,681 domestic

and 24,400 international tourists for cruise shipping in 2008

• Over 48% increase in international cruise vessels at Indian ports, and a hike of 28 per cent in cruise liners which operate only within Indian ports, catering mostly to domestic tourists

Year No. of cruise tourists

2003-04 28,0002004-05 27,7602005-06 1,52,8272006-07 2,40,3072009-10 (target)

600,000

RISING

INCO

ME LEVELS

Rising Income Levels

→ Number of salaried taxpayers earning

more than Rs 10 million has grown at

a CAGR of 65% over the past two

years touching 5,000 in fiscal 2008.

→ High rate of growth of High Net Worth

individuals

HIG

H VISIBILITY TH

ROU

GH

MAJO

R EVENTS

The Boat India Show 2008 was held at Kochi

The popular Volvo Ocean Race stopped by at Kochi for a fortnight, Dec 1-14, 2008

Vasco da Gama Rally 2009-10: The last leg from Mumbai to Goa was flagged off on 26th of April

2010. The rally starting from Alanya Marina in Turkey in October 2009, has yachts varying in size

from 9 m to 17 m from Holland France, USA, Italy, UK, Germany, Belgium, Switzerland, Italy and

France

People have spent close to Rs 4 billion on pleasure boats since Mumbai hosted India’s first

international boat exhibition – signifying the influence these shows have had in India

The makeshift marina near the Gateway of India which had 20-30 boats earlier now has 100

boats.

Events such as the Volvo Ocean Race 2009, the boat India 2008 have done a great deal in

enhancing India’s position as a major shipping destination

OWNERSHIP PROFILE

OW

NERSH

IP PATTERN→ Majority of the boats (75%) are owned by

Individuals

→ 50% of the owners are in the age

group of 40-60 years while another

33% are 60 years +

→ With fractional ownership concept

gaining ground, bulk of the owners

are CEOs/Partners/Owners of

companies

→ Speed boats with overall length less than

31 ft are most preferred

→ 95% of boats are purchased as luxury

boats; only 5% are ‘utility boats’ – mostly

in and around Mumbai

Source: Royal Bombay Yacht Club, Interviews

→ 25% boats owned by corporates (UB

group, Indiabulls Financial Services, Ispat

Inc (L N Mittal), Essar Steel, Reliance-

ADAG…)

THE IN

DIAN

‘YACHT CLU

B’ (WH

O’S W

HO

)Yachts one can order in India

UTILITY BOATS INDICATIVE PRICES*

Lancer 21 Rs. 1.7 millionMonterey 18 Rs. 2.0 millionSilver Craft 31 SF (Dolphin 31)

Rs. 4.5 million

Sea Ray 350 Sundancer Rs. 10.5 millionRegal Sports Boat 3050 Rs. 8.2 millionLarson Cabrio 310 Rs. 8.4 millionTouring 36 Rs. 6.1 millionYACHTSMajesty 44 Rs. 30 millionAzimut 43 Rs. 45 millionPrincess 42 Rs. 38 millionSunseeker 45 Rs. 45 millionFerretti 460 Rs. 48 millionMajesty 66 Rs. 100 millionAzimut 68 E Rs. 190 millionPrincess 67 Rs. 180 millionSunseeker Manhattan 66 Rs. 185 millionFerretti 681 Rs. 210 millionMEGA YACHTSMajesty 101 Rs. 240 millionAzimut 103 S Rs. 480 millionFerretti 110 CL Rs. 600 millionSUPER YACHTSCustom Line 112 Rs 940 millionPershing 115 Rs. 1.28 billionAlibi Rs. 4 billion

*Prices are inclusive of import duties Source: Industry

Vijay Mallya Chairman, UB Group

Owns the 95 m long (311 ft) Indian Empress costing approximately Rs 4.43 billion. Indian Empress is largely used for his private parties.

Gautam Singhania CMD, Raymond

Owns India’s first indigenously designed yacht—MY Ashena, a tri-deck luxury yacht. It’s one of the few in the world that is entirely made of wood.

Purchased a 34 meter super luxury yacht from Italy, costing approx. Rs. 4 billion. The yacht has about 5500 sq.m. area across upper and lower decks.

Anil Ambani, Chairman of Reliance- ADAG

Salman Khan, popular Bollywood star

This famous celebrity recently bought a private yacht worth Rs 2.5-3 crore.

Riyhad Kundanmal Director, Ocean Crest Marine

Sold a 50 footer Sunseeker, which he picked up in London in 2008. He also bought another 84 footer (The Sunseeker 80)

→ Mumbai accounts for 60% of the

pleasure boats in India. The Gateway

of India in Mumbai, caters to almost

200 boats of various sizes and

shapes.

→ Besides Mumbai, Goa and Kochi, the

number of yachts owners in non-

coastal cities like New Delhi and

Hyderabad is increasing

Source: Field Survey interview

Usage Pattern

→ Luxury boats are valued and fully utilized by their

owners.

→ Boat owners who don’t use the vessels often,

offer their boats on charter in order to cover

maintenance costs.

MARKET SEG

MEN

TATION

: DEM

AND

SIDE

→ 30% of the owners rate maintenance

provision as their top selection priority.

→ Pleasure boats particularly super luxury

products have a high maintenance cost,

generally ranging from 5 to 15% of the

price tag.

Source: Field Survey interview

FORM

S OF O

WN

ERSHIP

Time Sharing

→ Time sharing is a membership based system in which members are allocated specific

number of usage hours during the assigned period.

→ These memberships are not transferrable and non extendable and have no right on

the yacht

Club Privada, with 48 members, is India’s first luxury boat club to launch the time

sharing concept. The Club offers time share options with a choice of yachts, including

super luxury $2 million Azimut 50 and Larson Cabrio 350.

The club recently initiated a Points System wherein 500 points are given to the members for Rs 0.5 million lump sum payment, which in turn can be redeemed on an hourly basis as per requirement.

Source: Field Survey interview, Yachting Association of India Joint Secretary General, Commodore Ajay Narang

The Azimut 50 costs Rs. 3.1 million for 30 days over three years

Cabrio 350 costs Rs. 1.6 million for 13 days every year for three years

FORM

S OF O

WN

ERSHIP

Fractional Ownership

The yacht is shared typically 5-6 persons, one ‘owner’ member and other ‘sharer’

members

Aquasail is a company that promotes fractional ownership. The contract

between Aquasail & an Owner is typically for a 5 year period. Aquasail manages all

the maintenance and running costs for the boat through the period of the contract

while customer also receives annual payments.

Many dealers have started approaching clients with this proposition.

Benefits of fractional ownership:

→ The member gets to use high quality boat without paying full purchase & maintenance costs.

→ No hassles of maintenance, servicing since all are taken care of by the maintenance company.

→ Members also have the right to sell their share at any point of time.

→ Together owners can rent the yacht during extra days too and share profit.

Problems faced under fractional ownership:

→ Diverging budgetary preferences

→ Free riding among the members

→ Simplistic and inflexible scheduling agreements

→ Differences in willingness to do maintenance

→ Poor asset care and use

→ Lack of communication between owners

FORM

S OF O

WN

ERSHIP

Charter Services

→ While investing in a yacht, one important factor to bear in mind is its potential for charters→ By chartering a yacht for about 10 weeks a year, the owners can pay operating expenses for a

full year→ Club Privada has entered into charter market, by renting yacht facilities for Rs.150,00 -

Rs.30,000 per hour for 8-12 people occupancy.→ Vijay Mallaya, of UB group, charters his mega yacht, which costs about $700,000 a week.→ License to charter can only be obtained at the time of purchase of the yacht when it is

registered with the concern authorities in India

Financing & Insurance

→ Indian financial institutions have not yet adopted marine financing options.→ The only bank active in this field is Yes Bank, where in a dedicated team is handling this.→ Usually all insurance companies provide marine insurance→ Hull insurance policy in India is not too much conclusive, it has been taken from Europe but

when compared to environmental variance and sea conditions in Europe and India, there is a vast difference

SUPPLY SIDE SCENARIO

MARKET SEG

MEN

TATION

: SUPPLY SID

E

→ Most yacht manufacturing companies operate through a dealer model

→ Dealers are usually people well renowned in sailing circles and their

own links and contacts play an important role in lead conversion

→ The scenario is no different in India where almost all foreign

manufactures have a presence through dealers, and operate on multi

brand models

→ The absence of multiple dealers of a particular brand and the fact that

the market is value driven enables the customer to enjoy a good

scope of bargaining

.

Recently, dealers have started giving discounts and reducing their margins to increase sales. Starting from a target margin of about 30%, the dealers usually settle for a margin as low as 8%, depending upon the client’s bargaining power and the dealer’s urgency to make a sale

MARKET SEG

MEN

TATION

: SUPPLY SID

EKey tactics – Sales generation

→ Word of mouth publicity is the most effective

method of sales generation, accounting for 49%

of the sales.

→ Exhibitions and Boat Shows are a recent

development in India and are likely to emerge as

an important avenue for sales generation.

Key Attributes in a Dealer

→ 50% of the customers identify dealers according

to the brands that they deal in

→ Only 20% choose on the basis of the

maintenance and services offered.

Source: Field Survey interview

MARKET PRESEN

CE OF M

AJOR M

ANU

FACTURERS

Although the official import statistics indicate that Italian companies have about 25%

market share, the feedback received from industry players during primary research,

puts the share of Italian companies at a dominant 45% in value terms.

Source: Field Survey interview

PROFILIN

G O

F MAJO

R MAN

UFACTU

RERSGulf Craft Inc.

• Operating since 1982 in UAE, the company holds a pre-eminent position in the global leisure marine market offering a wide array of products.

• Six sales were recorded through them during 2007-08.• Manufactures high speed boats and yachts, ranging from

30 – 140 feet, with an annual production of 600 boats.• Exports more than 70 % of its output and its super-luxury

vessels are to be found in virtually every major harbour of the world.

• Gulf craft has product range under 3 distinct brands - the Majesty, SilverCraft and Oryx range of boats and mega-yachts.

• West Coast Marine is their exclusive dealer

Sealine

• Founded in 1972, Sealine is currently one of Europe's largest luxury boat builders, producing over 300 boats a year.

• Its product range comprises Sports Cruisers (25’-47’) and Fly bridges (34’-60’).

– T series– F series– S series (entry level S25 to the commanding

SC47)• With international sales and dealer network

comprising over 40 dealers, Sealine has representation across the globe.

Maxum

• A Brunswick Corporation brand and a member of the Brunswick Boat Group, Maxum is the acknowledged leader in recreational boating for more than 15 years.

• Maxum boats pass through the popular PRO® System which ensures highest quality parts and manufacturing processes at the best prices.

• Maxum is known for manufacturing the following types of yachts:

– Speed boats– Sport Cruisers– Sport Yachts

Ferretti

• With a current production run of around 60 units, this Italian group is focusing on top-end yacht including Fly bridge.

• 460 (46’) and 550 were the first two motor yachts delivered by Ferretti and were the first luxury motor yachts to arrive In India.

• Recently set up shop in India through Marine Solutions, India’s premier yacht retail company.

• Group consists of about 10 design and production companies including Pershing S.p.A, Itama Cantieri Navali S.p.A, Riva S.p.A. among others.

PROFILIN

G O

F MAJO

R MAN

UFACTU

RERSAzimut

• Azimut which is positioned as the epitome of luxury , has a range of around 300 nautical miles

• Amerglass, a modern Dutch shipyard producing boats in fiberglass are their dealers. Products consisted of sailing boats, motor cruisers and finally motor yachts from different makers: British Powles, Westerly

• The product of a joint-venture with Amerglass, the first fiberglass motor cruiser developed, the AZ 43 BALI, was an instant success.

• Models available are: Fly- 39E, 42E, 43, 46E, 47, 50, 55E, 62E, 68E, 75, 80, 85, 98, 105,116; Open- 103S

• Sorenstam Ventures and New Wave are two among few dealers of the yacht manufacturer.

Princess Yachts

• British motor yacht maker based in the city of Plymouth, Devon, England.

• Founded in Plymouth in 1965 as Marine Projects (Plymouth) Ltd, it was bought in 1981 by South African businessman Graham J. Beck, who sold the business to French businessman Bernard Arnualt's investment group, L Capital, a division of LVMH for £200million in June 2008.

• Their current model program includes a series of flybridge yachts ranging from the Princess 42 at 44 feet, 3 inches (13,5 metres) to the Princess 95 at 95 feet 3 inches (29,3 metres), and a series of sporting yachts, designated as V-Boats and ranging from 42 to 85 feet.

Nautilus Yachts• Kochi based yacht manufacturing company manufacturing high-powered air-conditioned single cabin boats of 16 feet costing Rs.1-2 million as well as ones costing more than Rs.20 million with more cabins and electronic fish-finders.

• Kochi based yacht manufacturing company • It manufactures high-powered air-conditioned single cabin

boats of 16 feet costing Rs.1-2 million as well as ones costing more than Rs.20 million with more cabins and electronic fish-finders.

Aicon

• The Aicon Group is one of the most dynamic operators in the design, construction and commercialization of Fly bridge and Open yachts, both in Italy and abroad.

• Launched only on 1999, Aicon has established itself as one of the major Italian operators in this sector with a strong presence in Europe, and, more recently the United States and China.

• Dealer network covers the USA, the EMEA countries (Europe, the Middle East and Africa), Russia and Asia

• Available in India in open boats and flybridge version.

Grady White Boats

• One of the most successful boatbuilding companies in the world since 1959, Grady-White Boats has a legendary reputation for designing and producing outstanding fiberglass boats.

• Dealer: New Wave takes care of its sales in India.

PROFILIN

G O

F MAJO

R MAN

UFACTU

RERSBayliner

• Leading manufacturer of recreational boats established in 1957.

• company operates as a subsidiary of Brunswick Corporation, which acquired Bayliner's former parent company US Marine in 1986.

• Bayliner facilities are located in Pipestone, Minnesota, Roseburg, Oregon, and Cumberland, Maryland, in the United States; and in Reynosa, Tamaulipas, in Mexico.

Sunseeker International

• UK luxury motor yacht manufacturer. .• Their headquarters and assembly factory is in Poole

Harbour, at Poole in Dorset, England. The company has been making motor boats since 1979.

Sea Ray

• A brand of pleasure boats owned by the Brunswick Corporation.

• It was founded as an independent company, Ray Industries, in 1959 in Detroit, Michigan by C.N. Ray. That company was bought by Brunswick for $350 million in 1986.

• At the time, the purchase made Brunswick the largest pleasure boat producer in the world.

M&M Yachts:

• Exclusive dealers to Riva yachts, often known as ‘pride of Ferretti group.

New Wave

• Deals with yachting, power boats or water sports from various brands like Azimut, Cobalt boats, Larson, Grady white.

• Assist customers with certification by authorities, insurance, transportation to India, customs, commissioning and other regulatory issues.

• tied up with Ocean Blue Boating Services Pvt. Ltd. (OBBSPL) for servicing and maintenance

• OBBSPL currently is based out of Dharamtar, Alibaug, with a 10,000 sq/ft waterfront, all weather workshop and storage facility with capabilities to perform the basic services to a full yacht refurbishment.

• OBBSPL offers a 24-hour call service for Break Down and towing Service around the Mumbai area.

Aquasail

• Founded in 2004 by Shakeel Kudrolli, India’s premier yachtsman. • Aquasail has established itself in the market by forging several tie

ups with some of the world’s best brands, bringing a range of dinghies, power and sail boats to India.

• The brands that Aquasail represent are the World’s leaders in their categories like Laser Performance, Hobie Catamarans and Kayaks, NeilPryde Windsurfing and Cabrinha Kiteboarding. T

• he highly desirable Beneteau with its sleek French design and luxurious interiors is the ultimate style statement in sailing yachts & powerboats.

LEADIN

G YACH

T DEALERS

Marine Solutions

• Established in 2001, Marine Solutions is India's first professionally managed company dedicated to the leisure boating industry.

• Represents premier international brands in every category of the boating business in India. Some models include Ferretti Yachts, Custom Line and Mochi Craft among others

• Marine Solutions has sales and service offices in Mumbai, Goa and Kolkata; engine workshop in Cotton Green, Bombay; and boat yard in Mora, 15 minutes by speed boat from Mumbai.

• Offers clients exclusive service at the Panjim Yacht Station in Goa and at moorings off the Gateway of India in Mumbai.

Aquamarine Services

• The company is exclusive distributors of U.K based Princess Yachts in India.

• Provides a seamless ownership experience for customers including boat selection with tailor made specifications, registrations, crew, management and maintenance.

• Offersluxury charter services on Princess Flybridge yachts and fractional ownership programs on a range of Princess Yachts.

West Coast Marine

• The company started in 1994, it has 156 employees, enjoys 75% market share in servicing the yachts and 30% in sales.

• The company focuses more on service as they are managing 110 yachts as of now in Mumbai.

• Company operates on backward integration model i.e. they create their brand name through after sales service they provide to their customers.

• They also provide yacht financing in association with Yes Bank. Majesty Yachts, North Star, Hanse, Silver Craft are few brands which the dealer caters to.

Infinity Yachts

• Infinity Yachts is a division of Infinity Group. • The Group, through its division Infinity cars has a

proven expertise in dealership and services for high end, lifestyle vehicle brands.

• Infinity Yachts represents Maxum (entry level sports cruiser) and Sealine (sports cruiser & flybridge) which belong to Brunswick and Aicon (luxury motor yacht) from Italy. These brands are among the global leaders in their size segment.

Larson Boats

• Larson Boats founded in 1913 deals in the manufacture of the most affordable and dependable boats.

• Larson offers 24 models ranging from 18' to 37'. • Sorenstam (Dadar, Mumbai) is the dealer taking care

of its sales in India.

Ocean Crest Marine

• Ocean Crest Marine currently has outlets in Dharamtar creek and Revas port in Mandwa.

• A showroom in South Mumbai is also in the offering.

REGULATORY FRAMEWORK

REGU

LATORY FRAM

EWO

RK

→ Indian Pleasure boat industry is covered by Inland Vessels Act→ As there are no specific rules and regulations designated for pleasure boats in

India, the owners face regulations applicable to carriers or cargo vessels. → The Cruise Shipping Policy (Ministry of Shipping) was approved on 26th June,

2008, aimed at • making India a cruise tourism destination with state-of-the-art infrastructure and

other facilities • to attract the right segment of the foreign tourists• to popularize cruise shipping with Indian tourists;

→ Registration is one of the most important aspects of yacht ownership, mandatory for motor boats

→ Any vessel which has provision for sailing does not require registration by law, however registration is practiced in all cases for easy navigation.

→ Vessels under 15 tonnes have been exempted and thus do not require registration with any authority.

→ Commercial liners are registered with the Director General of Shipping and smaller coastal or inland water vessels are registered with the respective State Maritime Boards

Government policy

Registration

According to Daily News Analysis the total no of boats registered till 2007 was 269 an

increase of 73 over previous year’s 196. However primary sources estimate that

approximately 120 boats are sold every year, which shows that not all are registered.

Maharashtra Maritime Board

→ Maharashtra Maritime Board is the nodal agency that takes care of the

regulatory and developmental framework of the state's maritime activities.

→ The board has taken a number of initiatives - development of the marine front

including setting up of several cargo jetties, ferry wharfs, larger port terminals,

inland water transport system, shipyards etc

→ MMB ports which are supported by 400 employees across five regional

offices. presently handle 10 percent of the total cargo handled by minor ports in

the country.

→ As boats are not compulsorily registered with any authority, there is no

checking of the log books, verification of the men working on it.

REGU

LATORY FRAM

EWO

RK

REGU

LATORY FRAM

EWO

RKImport Duty

Taxes

→ Imports of Yachts and other vessels for pleasure or sports attract

Custom Duty at a rate of 34.13%.

→ However, when the owner shows it as a tool to business, the custom

duty is zero.

→ Mumbai, which has the highest concentration of yachts in India, levies

5.5% Octroi on yachts and pleasure boats.

→ There is no Octroi in Goa.

IND

USTRY BO

DIES

The Yachting Association of India (YAI)

→ Formally constituted on 15 May 1960

→ Recognized as the governing authority for sailing, windsurfing, motor boating,

powerboat racing and personal watercraft, at sea and on inland waters in India

→ Affiliated to the International Sailing Federation (ISAF), which is recognised by the

International Olympic Committee (IOC) as the governing authority for sailing

worldwide

→ Currently 14 class associations affiliated to the YAI

→ Currently 40 clubs affiliated to the YAI, spread over the various parts of the

country.

Indian Olympic Association

→ IOA the apex Sports Organization of Olympic Sport in the country

→ Each Olympic and Non-Olympic Sport has a Federation at the National level

and is affiliated/recognized to/ by IOA.

REGU

LATORY FRAM

EWO

RK: IND

USTRY BO

DIES

The Royal Bombay Yacht Club (RBYC)

→ Founded in 1846, holds its importance in terms of the registrations and services offered.

→ The total no. of boats registered with them was 185 of which speed boats were the dominant category

→ The RBYC has what's called a Seabird Class of Boats and their sister club,

the Colaba Sailing Club has a Lightning Class of boats..

Source: Royal Bombay Yacht Club

DEMAND POTENTIAL

DEM

AND

POTEN

TIALDemand according to the present scenario

→ The potential demand for yachts and pleasure boats in India over the next 10

years is estimated by two methods:

→Growing universe of the individual buyers

→Yachts as a part of the expanding luxury market

Growing universe of Individual buyers

3 crucial components comprising the universe:

→HNIs

The HNI population as of December 2007 stands at 0.12 million, growing at a CAGR of 19% p.a

→CEOs/MDs

Universe is limited only to the CEOs and MDs of top 100 BSE listed companies earning over

Rs 10 million a year. This segment has been growing at 22%p.a. since last three years (2006-

08).→BOLLYWOOD CELEBRITIES & SPORTSPERSONS

This section of the universe is pegged to grow at a CAGR of 20% p.a.

DEM

AND

POTEN

TIAL: GRO

WIN

G U

NIVERSE O

F THE

IND

IVIDU

AL BUYERS

Year HNI (growing at a CAGR of 19%)

CEOs/MDs growing at a

CAGR of 22%)

Bollywood celebrities &

sportspersons (growing at a CAGR of 20%)

Total size of the universe

(No.)

Market size in No. of Boats

each year (0.1% of universe

buys boat every year)

2008 120,000 77 288 120,365  

2009 142,800 94 346 143,240 143

2010 175,644 115 415 176,174 176

2011 216,042 141 498 216,680 217

2012 265,732 171 597 266,500 267

2013 326,850 209 717 327,776 328

2014 402,026 255 860 403,141 403

2015 494,492 311 1,032 495,835 496

2016 608,225 380 1,238 609,843 610

2017 748,116 463 1,486 750,066 750

2018 920,183 565 1,783 922,532 923

Total market potential over 10 years 4,312

→The total size of the universe as of 2008 was 0.120 million.

→ According to industry sources, approximately 120 boats are sold every year, indicating that only

0.1% of the universe buys boat every year.

The yacht industry would be able to sell approximately 4300 boats over a decade (2008-2018).

DEM

AND

POTEN

TIAL: YACHTS AS A PART O

F THE

EXPAND

ING

LUXU

RY MARKET

Yachts as a part of the expanding luxury market

→ Luxury goods market in India was pegged at USD 4.35 billion in 2006 which is expected to triple

to 14.35 billion in 2010.

→ According to Daily News Analysis the total no of boats registered till 2006 was 196.

→ As per primary research 95% of the boats are sold for luxury purposes, which mean that 186

boats cater to the luxury market.

→ Given the value of the luxury goods market in 2006 and assuming the average price of boat to

be Rs 5 million, the share of the yacht industry in luxury goods market is estimated to be

0.54%.2006

  No. of boats in the market until 2006

Value in Rs million (taking average price to be Rs 5

million)

Value in USD million (taking average exchange

rate as 40 Rs per US$)Yacht industry 186 931 23.275

Luxury goods market (Source: The Economic Times ATKearney India Luxury Review 2007)

    4,350

Share of the yacht industry in luxury goods market (%) 0.54

DEM

AND

POTEN

TIAL: YACHTS AS A PART O

F THE

EXPAND

ING

LUXU

RY MARKET

The luxury goods market is pegged to reach US$ 14.35 billion in 2010

Using the share of the yacht industry in luxury market as obtained from 2006 data

The estimated size of the luxury yacht market in 2010 would be US$ 71.75 million, which translates into a total of 574 boats in 2010

Assuming a similar trend to continue for the following eight years, the total no. boats in the market is projected to touch approximately 4,800

Year Total no of boats in the market

2006 1962007 2562008 3342009 4372010 5742011 7502012 9792013 1,2792014 1,6702015 2,1812016 2,8482017 3,7202018 4,858

Considering both the methods, an average figure of 4500 boats seems to be a realistic estimate for the year 2018.

DEM

AND

POTEN

TIALPotential demand

Assuming that the industry is no longer constrained by infrastructure and regulatory issues,

Given the assumptions and taking into account increasing awareness, a realistic estimate of at least 0.3% of the universe buying a boat every year seems possible.

 Year HNI CEOs Bollywood celebrities & sportspersons

Total No. of Boats likely to be sold

each year 2006 79,318 52 200 79,570  

2007 97,561 63 240 97,864  

2008 120,000 77 288 120,365  

2009 142,800 94 346 143,240 430

2010 175,644 115 415 176,174 529

2011 216,042 141 498 216,680 650

2012 265,732 171 597 266,500 800

2013 326,850 209 717 327,776 983

2014 402,026 255 860 403,141 1,209

2015 494,492 311 1,032 495,835 1,488

2016 608,225 380 1,238 609,843 1,830

 Total number of boats (2009-2018) 12,935

Accordingly, the Indian market offers a potential for sales of around 13,000 boats over the next ten years.

CONCLUSIONS & RECOMMENDATIONS

CON

CLUSIO

NS

Conclusions

→ Indian Pleasure boating and Yachting industry is still in a nascent stage of development, with

only about 300 boats registered

→ Currently reported to be growing at more than 100% per year, both in volume and value terms

→ The main factors driving the growth of the Indian market are rising income levels and the

increasing number of high/ultra-high net worth individuals in India; increasing popularity of cruise

tourism, and organization of boat shows, exhibitions and other promotional events.

→ Several new marinas are in planning/implementation state, which will a large extent address

the problem of inadequate infrastructure,

→ In terms of market presence of manufacturers, Italian companies have a 45% market share,

followed by UAE based companies (25%) and other European companies.

→ The growth of the market is constrained to an extent, due to lack of regulatory framework,

both at the central as well as state level.

→ Based on the present market scenario, with estimated sales of about 120 boats a year in the

recent years, the demand for additional boats over the next 10 years, i.e. 2009 to 2018 is

projected to be about 4500 numbers.

→ However, in a likely scenario of regulatory and infrastructure issues being adequately

addressed, the total potential demand could be 13,000 boats over the next 10 years.

RECOM

MEN

DATIO

NS

→ Selection and appointment of dealers is the key to success

→ High visibility in the market, through active participation in boat shows, exhibitions

and trade promotion events is extremely important to create brand awareness.

→ While having a presence in key locations like Mumbai, Goa and Kochi is essential, it

is also important target non coastal cities as well

→ Offering a package of fractional ownership options or financing tie-up with a bank

can be a strong USP.

→ Provision of maintenance and boat management services

→ Developing the pre-owned yacht market could be a unique niche in the Indian

market. In world boating industry, about 42% of all new boats are sold by the first

owner within seven years.

Recommendations