Last fall the world-leading, Chinese superyacht manufacturer Pride Mega Yachts launched a new 88.8 meter superyacht called Illusion at the prestigious Monaco Yacht Show. A display that highlighted the innovation and luxury behind the country's yacht industry. China has earned a reputation for its production of luxury superyachts, as market production and exports have been steadily growing over the years.
While Europe is still the leading region for superyacht building, China’s yacht manufacturers in Guandong and Shandong show the potential to increase its share in the global production. But as its superyachts are making a splash abroad, China’s super rich have slowly began to turn their eyes to sailing back home, although it appears that it could take a while for yachting to truly take off in the country as a luxury past time.
Luxury on Dry Land vs. Luxury Yachts
Despite being the world’s largest economy, with over 1 million millionaires and 67,000 citizens who can be classified in the ultra-wealthy bracket with assets of over US $16 million or more, only 0.3 percent of China’s rich own a yacht. Elements of Chinese culture, like the tendency to avoid the sun, and the foreign concept of "down time," has meant the yachting trend has been slow to start.
“The Chinese are not used to the idea of time away from it all, especially not European style,” said Colin Dawson, chairman of the Asia-Pacific Superyacht Association. “They tend to take a very different approach to yacht ownership—it’s a business tool, not a leisure item.”
But beyond the fact yachting has been primarily a Western past time, the luxury good import tax of 43% has also dampened the yachting market, not to mention the lack of experienced crews. This means Chinese superyacht owners not only need to relocate European crewmembers, but also obtain work visas.
Plus there is the elephant in the room—the fact that China simply has few key marinas and also lacks the infrastructure for supporting yachts. In fact, when China’s ultra-wealthy do buy and keep yachts, they are usually maintained in Europe, the US and elsewhere in Asia. However, the future might be bright for the yachting industry in China.
The superyacht and luxury yacht market is growing in China, albeit very slowly, especially since China is gaining a steady reputation as a luxury yacht builder.
“Chinese looking into superyachts may buy in Europe and elsewhere in Asia,” said Nigel Stuart, managing director of yacht building company Spirits Yachts.
The appeal of yachting may take Chinese consumers overseas, with dreams of sailing around the Mediterranean or with Asian destinations like Thailand or Malaysia. However, closer to home, the Chinese yacht-building market has began to rank up within the industry.
China, according to Boat international, ranks eighth in the top ten superyacht building nations. While it still pales in comparison to countries like Italy, the growing interest in yachting combined with a 43% import tax on luxury goods could mean that China’s yacht-building market will grow with the demand.
Will China Become a Driving Force in Yachting?
China has not been written off as a market, but it will take time for luxury superyachts to become a driving force in the industry. In nearby Singapore or Hong Kong, yachts have already begun to gain traction in popularity.
London-based Burgess Yachts expanded to include a division in Singapore earlier this year, placing its foothold in Asia anticipating the take off of the Chinese market.
“We are slowly preparing for when China comes on stream—when it does, it will come big,” said Jonathan Beckett, chief executive of Burgess, “Is China the new market for superyachts? Not yet—is the answer. North America, Europe, the Gulf and the Middle East are still the markets of today.”
However, the interest in yachting is there. A survey by Shanghai-based research firm Hurun found that more than half of the Chinese from the mainland with a worth of over $1.5 million or more have expressed an interest inowning a yacht.
“We are taking a long-term approach to developing the market in Asia,” continued Burgess CEO Jonathan Beckett, “We don’t expect to gain immediate traction and are realistic about the investment in time and resources required for success. We believe in the importance of this market and are committed to introducing superyachting to a completely new customer base.”