Why Do New Yachts Go Up For Sale?

I remember reading about Alloy's Tiara which went on the market the day after the owner took ownership. He said he had such an enjoyable experience with Alloy during the construction he wanted to do it all over again.

In reading your question, a recently popular term in the housing market comes to mind...

... "Flippers"

Fairly accurate synopsis, but there will always be reasons we'll never know about.

Yes, and they do!

Yep. There were some examples of this in 2005. I know our members could name a few of them, but this might disclose details that probably shouldn't be posted in the forum. In most of the cases I've heard about, it didn't sound like profit was the main reason for selling. I think the example Kevin gave best represents the reasons I've heard of.

There are people that don't want to wait for a new boat to be built. They visit a yard, fall in love with a boat under construction and make an offer to buy the contract. In some cases, the owner of that contract already has another boat that is serving his purposes and is not in a rush for the new contract/build to be finished. So, he sells the contract at a premium and in-turn contracts a larger boat with the yard.

As Kevin mentioned, the build process can be just as rewarding as the final product. In some case, you learn so much from past builds that you want to incorporate these ideas into new builds. Another example is the relationships that are developed between a yard and a customer. In some case (not all!), they enjoy working together and it is mutually beneficial.

So in effect, the customers become investors?

In essence, yes. In some extreme cases, a customer has ended up purchasing the yard when things go astray. There have been more than a couple of these instances.

Richmond Yachts (formerly Sovreign Yachts) was bought buy a customer who's project was half done when the yard went under. If I remember correctly, it was Status Quo that was the first yacht finished under the new name.

There are more than enough people with the asset base to support the building that is going on. If the capacity were higher, I dare say the demand would be higher as well. Some people just simply don't want to wait. I know of at least one 85% complete build where someone decided not to wait for a new build from scratch and made the owner a very healthy offer to take over the contract. The original owner made about 20% on his money.

Regarding Kevin's comment about Tiara's owner enjoying the process.
How many here would not learn from, and be involved in the building and progress of a one off vessel. Using the knowledge gained in one build to do it better in another one could be irresistible. As an example, anyone here ever been completely satisfied with any car that they've purchased, not even one thought about something that could have been done differently or better.

Another aspect might be the emergance of new technology. by the time a yacht is built the design is already severial years old. This seems especially true with the electronics. For those who can afford it,they always want the newest and the best technology out there.

Just a theory.........

Could it be that some of Europe's major high-quality custom-builders add semi-custom series to keep an upper hand in the market?
Indeed, a lot of new building projects are referred to as being for "repeat customers".
Could it be that the upper crust just "buys" the building slots at major yards to "control" the production?
By using a marketable "pedigree" they're quite sure nowadays to sell of their "investment" before or just after its launch, at a premium of course!
With a series-built semi-custom yacht in the best selling size-bracket and with a please-anyone external design, these yards can again address the market directly!
I agree this is a somewhat extreme theory, therefore no names or references are mentioned, but in a world of extreme competition, it might just be reality!

TRY,

You're right.

Some major European shipbuilders are now realizing that having a semi-custom series gives them the edge over other builders. Many potential owners can't wait for the 1-1/2 to 2 year lead times for a custom one-off design.

I think most repeat customers come back because they are satisfied with their previous yachts, and are comfortable in having a new one built with a yard that they already know and trust.

Of course, it is possible that someone can "buy" build slots, but don't they have to "commit" to purchasing the yachts? A little risky, but considering the potential in this "exploding" market, it might just pay off. Contracting a well-known and reputable builder assures a premium pricetag.

And with the total number of Billionaires (in US$) now 793, up 102 from last year (they're worth a combined $2.6 trillion), there won't be any shortage of customers anytime soon.

It would be ...

interesting to have the opinion of one of the major yards, members on these forums.

But then, this is maybe asking a bit too much!

My private opinion, which I'm working hard to implement, is:
- semi custom is the way forward (if you want to be profitable)
- the client is the disturbing element in the building process (the richer the more so!). Sorry client!
- direct sales is 10-15% advantage versus working with brokers.

More extreme than this I dare not be!
Straightforward speaking makes sense in the end!