Boating/Pleasure Boating/Yachting Industry & its Evolution in India

PLEASURE BOATING & YACHTING INDUSTRY

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

DEMAND POTENTIAL
Demand 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 individual buyers Yachts as a part of the expanding luxury market

Growing 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.

DEMAND POTENTIAL 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 Yacht industry 186 Value in Rs million (taking average price to be Rs 5 million) 931 Value in USD million (taking average exchange rate as 40 Rs per US$) 23.275 4,350

Luxury goods market (Source: The Economic Times ATKearney India Luxury Review 2007) Share of the yacht industry in luxury goods market (%)

0.54

DEMAND POTENTIAL
YACHTS AS A PART OF THE
EXPANDING LUXURY 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
Year Total no of boats in the market

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

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

196 256 334 437 574 750 979 1,279 1,670 2,181 2,848 3,720 4,858

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

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. 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.

Thank You!