Free Trade Zones – Business – Year of the Tiger

It’s no secret that the superyacht market in general has struggled to convert the growing UHNW population into superyacht owners and perhaps nowhere is this more telling than in China. . With a booming UHNW population and a relatively intact superyacht market, compared to major buying hubs, China has long been assumed to represent the next big growth market for the superyacht industry. Use content originally published in The Pacific Superyacht Report, we take into account the opinions of some of the most renowned experts in the market on Chinese yachting culture and trends.

“There is definitely an upward trend in the superyacht market in China as the wealth of mainland Chinese increases,” explained Joe Yuen of Lodestone Yachts. “The Chinese tend to buy new superyachts from production yacht dealers, but now you see more and more Chinese buying semi-custom or fully custom superyachts through professional yacht brokers. Production yachts have been doing well in marketing in the region, and you’re also starting to see larger semi-custom superyachts cruising the harbours.

Asia’s most prolific yachting market is undeniably Hong Kong and it is through this market that many Chinese buyers have found their footing in the superyacht market. However, the Hong Kong superyacht market has limits, not so much in terms of wealth and market potential, but in terms of marina capacity. The vast majority of berths in Hong Kong are under 35m and as a result Chinese buyers aspiring beyond production markets have had to look elsewhere and, influenced by European yachting hubs, have begun to turn more and more to larger projects.

“Hong Kong is already a very mature yachting market, so there is not much potential for growth. While mainland China is already very active, it will experience rapid growth in the next 10 years,” explained Rock Wang, Feadship’s Asia representative. “Buying a yacht is more expensive in the 35-60m size range, so customers spending that much money tend to want something new. Around 60-70% of those customers will choose newbuild Most customers also don’t want to wait too long for their yacht, but fortunately many shipyards offer production or semi-custom models in this size range, which cuts down on build time.

Regardless of time constraints, however, Wang revealed that most Chinese buyers prefer new vessels: “The vast majority of customers want new construction when buying a yacht over 60m. Every yacht of this size has a very specific personality and because of this many of the clients I have worked with feel that a used yacht of this size does not and would not belong to them. This is the Chinese mentality; if they spend 20 to 30 million euros, they want something new.

The traditional view of Chinese shoppers is that they have been constrained by various societal norms, such as lack of holidays, an emphasis on business, and a desire to keep their wealth secret within a communist nation. However, the more the superyacht market develops in the region, the further these assumptions seem from the reality of the situation.

“One thing I’ve noticed in China, as the country has grown, is that tradition doesn’t hold people back,” commented Mike Simpson, chief executive of Marin Simpson. “The Chinese are adventurous and they are quick to grasp new ideas and develop them. Chinese buyers quickly realized that yachts were great for entertaining friends and associates, but with the growth of water sports, the ability to carry tenders and toys became increasingly important. The adventurous nature of the Chinese has also sparked an interest in expedition yachts.

Another of the traditional impediments to the development of the Chinese superyacht market, at least with respect to domestic ownership, has been the exorbitant tax requirements for importing superyachts built and/or flagged outside of China. However, with the development of the Hainan Free Trade Port, this is also changing.

On December 15, 2021, Simpson Marine sold a Sanlorenzo SX76. Although not generally considered newsworthy as the sale does not meet the size requirement of over 30m to be listed on SuperyachtNews, this sale is in fact significant as it is the first vessel of this type to be sold in Hainan free trade. Harbor.

“…the sale of another SX76 has recently been completed for delivery to the Hainan resort town of Sanya. Sanya Special Free Trade Port (FTP) benefits owners as there is no tax policy when a boat is operating as a charter vessel in China. Hainan Free Trade Port is expected to be one of the most open and internationalized areas in the region. It is trade and investment friendly, has a strong legal regime, maintains a comprehensive financial services sector, and demonstrates safe and effective oversight. A very attractive overall package for yachting,” explained an announcement from Simpson Marine.

For so many years, the superyacht market has looked eagerly to China, but so many companies were initially disappointed by the slow development of yachting in the region. However, with various commentators pointing to the growing popularity of superyachts from Chinese buyers, not to mention a functioning free trade port, perhaps the Year of the Tiger is the year the Chinese superyacht market will reach finally his maturity.

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