If the chill winds of recession are still blowing, no-one has told the super-yacht industry. There are currently more yards than ever before building yachts.

If the chill winds of recession are still blowing, no-one has told the super-yacht industry. There are currently more yards than ever before building yachts – a record 209 boatyards in construction phase, according to the 2012 Global Order Book published last month by Boat International Group.

But the sands are shifting as the yacht builders of the indebted West are forced to cut back, making room for the younger emerging markets players to step up to grab market share. Overall the number of yacht projects fell 3 per cent on last year, as the largest players, mainly in the UK, USA, Germany and Italy, lost market share. 

Although Italy remains the world’s largest superyacht builder its order book has plummeted. Symptomatic of the shifting power from West to East, earlier this month the world’s biggest luxury yacht builder Feretti was sold to state-owned Chinese bulldozer manufacturer Shandong Heavy Industry Group as part of a debt restructuring deal, after the yacht builder nearly went bankrupt in the post-Lehman turmoil.  

Likewise Greece, historically an important player in the superyacht world, has had more than its share of pain. As its position in the eurozone continues to hang in the balance, buying a super-yacht is not the first priority for many within its domestic market. Turkey, meanwhile, has already started to capitalise on this trend , said Theodore Vokos, the organiser of the Posidonia Sea Tourism Forum held last year, cited by Superyachtintelligence.com.

“As Greece saw a big drop in demand for yachting services and products in 2009, compared with the 2006-2008 period, the region’s emerging sea tourism destinations are vying to find their place on the map of yachting. New marinas in Montenegro, Croatia and Turkey are ready to capitalise on a potential pent-up demand that can be triggered by improving economic conditions in key European tourism feeder markets,” said Vokos.

Experts say Turkey has undoubtedly benefitted from the problems afflicting its eurozone competitors Greece and Italy, and the country’s yacht builders are not losing the opportunity. For the first time on record, last year Turkey bumped the US off third place in the Global Order Book, the benchmark index which ranks boat yards according to the total number of metres they have under order. Turkish yacht yards are currently working on 68 projects of 2,904 metres, compared with the US, where 76 boats measuring a total 2,737 metres are being built. 

“Turkish superyacht building has reached an unprecedented level of maturity, with a greater number of yards now delivering a superyacht product that in some cases exceeds that found in Europe,” said Tork Buckley, founder and chief consultant at superyacht consultancy Big Blue Consulting (www.BBCLconsulting.com).

“This maturity is underscored by the fact that they have surpassed the US in the global order book, although this maturity should be seen in its own right as there are still unanswered questions as to why in the crisis years the US yards, which should have been highly attractive due to a very weak dollar, failed to attract sufficient international clients,” he added.

Value for money

Others say the big plus for Turkey in today’s cash-strapped environment are the prices. “Turkey’s biggest selling point is that it aims to produce European-quality yachts, but not necessarily with the European build price tags,” said Martin Redmayne, editor-in-chief of The Superyacht Report. He added that there are a number of state-facilitated strategic advantages, which allows the Turkish market to build upon this position.

“The growth of the Turkish superyacht industry can be attributed to a selection of the geographical and political advantages that it has over its EU competitors. The country is strategically placed as something of an epicentre, with ports in the Mediterranean, Aegean and Black Seas, and offers a direct gateway between Europe and Asia. It also benefits from lower fuel costs because of its close proximity to the developing energy markets in the regions surrounding the Caspian Sea and Central Asia,” he said.

While historically Turkey is known for its high proportion of 30-50 metre sailing yachts – much higher than almost every other country – it has its fair share of vast 70-metre-plus motor yachts. The largest yacht delivered from Turkey is the famous 88 metre Maltese Falcon built by Italian yard Perini Navi at their Perini Istanbul Yildiz facility. Last year the 72 metre Red Square from Dunya Yachts and the 72.6 metre Hull NB54 from Proteksan Turquoise, were also delivered to great fanfare.

The Turkish yacht building industry expects to report significant growth in 2011, with a target of $15 billion by 2023, according to figures from the Istanbul ship and yacht exporters association.

Free trade zones

This target will also be helped by the Turkish government’s adoption of Free Trade Zones, added Redmayne - areas of land where businesses are only lightly taxed or not taxed at all. “While EU states have sporadically designated Free Trade Zones, none have implemented as many as Turkey. In turn, the Free Trade Zones attract a wide variety of manufacturers, triggering competition and flexibility within the supply chain. Less stringent labour laws, coupled with the cheaper cost of labour, contribute to lower operating costs,” he said.

That is not to say that Turkey intends to compromise on quality as a consequence of lower build costs. Quite the opposite, said Ali Tanır, the marketing director for Istanbul-based builder, Vicem Yachts.

“Turkish yacht builders have been striving all around the world to make people see that we offer quality and craftsmanship,” Tanır said. “Meanwhile, our European competitors had been trying to kill our strategy by saying that our production quality and [labour qualifications] were on a level lower than those in Europe. Now, following the recession we have a chance to show our competitors that Turkey is the new centre for super-yacht production,” he said.

Case Study

Vicem Yachts, known for its vintage-style luxury motor yachts and megayachts, has been on the front foot recently, hiring a marketing veteran in the yachting and powerboats world, Ali Tanir. It recently added three sales representatives for its European, US and Asian divisions: Antonio Caviglia, Dave Mallach and Barry Bailey, respectively.

“We have an important and ambitious calendar of events and products to introduce worldwide from now till the next two years to bring the Vicem brand, product lines and market presence to new heights through a multi-faceted approach involving marketing, sales and support,” said Tanir.

The hires are clearly paying off. This year is Vicem’s strongest order book in the 20 years since its launch, with four yachts ranging from 45 feet to 151 feet. Two months ago the yacht builder signed a strategic partnership with luxury award-winning Bodrum-based hotel, the plush Kempinski Hotel, Barbaros Bay. 

Part of family-owned Kempinski, Europe’s oldest luxury hotel group, the Barbaros Bay hotel was recently fitted with what is believed to be one of the largest luxury spas, the award-winning Six Senses Spa which stretches over 5,500 square metres.

The partnership allows Kempinski’s select clients, who include the likes of footballer Cristiano Ronaldo and actress Catherine Zeta-Jones, exclusive use of Vicem’s yachts.

Private cruises range from the expansive Vicem 92’ Vintage Line range yacht with its 4 cabins and 3 decks, to the nippy Vanguard 33’, ideal for exploring the deserted islands which pepper the Aegean coast.