A MULTITUDE of cheap imported vessels are potentially sinking Australia’s motor yacht industry, with local dealers unable to trade and sell overseas-made boats in what has become a flooded market.
The Gold Coast’s biggest yacht builder is feeling the effects of the downturn in the domestic market as its $70 million FY10 sales revenue falls to almost half of the $130 million recorded in FY08.
Maritimo CEO Bill Barry-Cotter (pictured) likens it to a similar dilemma as that faced by the Australian automobile industry in the 1990s, when an increase in Japanese-imported vehicles severely reduced resale value of locally-delivered Japanese models.
“The cheap second-hand stuff coming from overseas is creating major problems,” says Barry-Cotter.
“Someone might come to us to purchase a new yacht and look to trade in a five-year-old Sea Ray that was worth $1.4 million new. We might believe it’s worth $390,000 while the customer might want $500,000 for it.
“Then when we investigate online, we’ll find 40 of those models for sale with the highest one priced at $190,000. It makes trade-in deals unviable because dealers won’t be able to sell them. You can’t trade and can’t sell.”
Australian models are still being traded freely and Maritimo is experiencing some local success with its lower-priced models. Over the last two years the iconic Gold Coast brand has extended its low-end range to include 42-50 foot vessels starting from $800,000 which are proving popular with Australian buyers.
After acquiring the Gold Coast’s Mustang Marine in May 2010 for an undisclosed sum, Barry-Cotter and Swagman Motorhomes owner Steve Searle will look to capitalise on this trend with a revamped Mustang sports cruiser product line.
“We haven’t sold a single Mustang boat since acquiring the company, but we’ve redesigned the whole range, deleting those models that weren’t successful and improving the most popular models,” says Barry-Cotter.
“The flybridge and sports cruiser models are expected to be the strongest sellers with both the domestic and international markets. We will launch the first of the new models at the Sanctuary Cove International Boat Show in May, and then it’ll be going 100 miles an hour from there.”
Despite the high Australian dollar and economic conditions, Barry-Cotter highlights the US market as the strongest for Maritimo.
“People might have you believe the US is very slow, but in fact the market in that country is very good at the moment,” he says.
“I’ve been to many recent boat shows there and not one exhibitor has left a show without selling a boat. The Australian market will take a good couple of years to get back to where it was, but the US is driving forward right now.”
The $530 million expansion of Coomera’s Marine Precinct, jointly funded by Barry Cotter and Brisbane-based developer Property Solutions Australia is still pending Gold Coast City Council approval.
Barry-Cotter says the approval process will likely take up to five years, but says the timeframe ‘will hopefully’ mean the start of construction will coincide with the pickup in Australia’s marine sector.
Top Companies Profile: Maritimo
CEO: Bill Barry-Cotter
Revenue ’10: $70 million
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