China's increasing wealth means more money spent on luxury items like yachts. This is great news for the Brunswick Corporation, owner of the Boston Whaler and Sea Ray brands. They forecast sales growth of 25 percent in China this year as boating gains popularity.
They believe the long-term potential in the marine business is larger than anywhere else in the world. With unique wealth, the boating culture is expected to take hold very strongly.
Government attempts to clean up the country’s lakes, a growing appreciation of family-oriented leisure pastimes and rapidly increasing prosperity are driving demand for vessels from dinghies to yachts.
Lake Forest, Illinois-based Brunswick sold about 55 boats in China last year, accounting for 35 percent of the 180 boats shorter than 40 feet long (12 meters) imported into the world’s second-biggest economy. This makes Brunswick the Chinese market leader in that class.
Brunswick, whose share price has surged 37 percent this year, expects sales growth in China this year to match the 25 percent posted in 2010. The stock rose 0.6 percent to $25.59 on April 1 in New York trading.
Demand for larger boats is growing in China, and the company plans to introduce its Meridian and Hatteras yachts that are as long as 100 feet.
Princess Yachts, owned by French luxury goods maker LVMH Louis Vuitton Moet Hennessey SA, started selling in China in 2009. It’s already sold five luxury boats in China, including a 95-foot yacht bought by a Dalian property developer last year.
China had 447,000 millionaires in 2009, a 31 percent increase from the year before ranking it behind the U.S., Japan and Germany.
A Brunswick vessel such as a 47-foot-cruiser, the Meridian 441, sells in China for 7.8 million Yuan ($1.2 million) inclusive of taxes. China imposes a 43 percent levy on imports of boats. The nation accounts for 1 percent to 2 percent of global yacht sales of $3.4 billion in 2010. Brunswick entered the Chinese market in 1998 and has sold over 600 private luxury yachts to Chinese customers.
With Brunswick’s past success in China, the future economy in China holds even more promise.
