An update on the forecasts to 29 Jan 2024, what can we expect this year…
t’s always difficult to see into the future. Economists often do, and they’re often wrong. Many factors influence the future, and that’s an understatement in recent years.
But since financing is a key factor for a certain category of boat, especially for those priced at $700,000 and under, we think that sales will be slow for at least the next 6 months, and most likely for the whole of 2024.
On this subject, you should read our analysis of sales for certain US manufacturers published on our Blog.
Some economists are predicting a rate cut in mid-2024, followed by others thereafter, but this depends on the evolution of the inflation rate, which is bound to fall. But they all agree that interest rates have peaked. At worst, it will remain stable throughout 2024.
It has to be said that a rate cut of 25 or 50 points for the whole of 2024 will not radically change yachtsmen’s perceptions or access to financing.
For yachts costing over a million, it’s rare for a customer to talk to us about financing, as they’ve usually already organized their financial package for such an acquisition.
But one thing’s for sure: dealers in new boats and yachts will certainly be reducing their inventories.
So we’ll definitely be in a buyer’s market, so sellers will have to be more competitive in setting the sale price if they want to sell quickly enough. In short, we’re going to have to adjust to the competition.
What’s interesting for 2024 is that marinas will probably have more dock availability. Sales of gasoline offered by marinas fell quite sharply last year (by almost 50%), reducing marinas’ operating budgets and hence customer service.
The price of docks is already almost minimal in Quebec compared to the U.S., so we may have to expect a slight increase.
There’s been a sharp rise in new boat prices over the past two years, the COVID effect, but manufacturers are also seeing a drop in production (2023 and 2024), so they’re trying to compensate by raising prices to maintain some corporate profitability in the absence of volume.
Will dealers reduce their prices? Good question, but one thing is certain: they will reduce their inventories.
The sales figures of some American manufacturers are already falling, so take a look at Appendix 1 at the bottom of this text.
Boaters will have to do their homework and analyze the market more carefully if they want to do well.
For example, if you’re looking to buy a new one, or if you’re using it for a year or two, you’ll have to look at all the options.
We’re only looking at the Canadian market, or the U.S. or Europe. You have to do the math. Sometimes, even with an unfavorable exchange rate, a purchase outside Canada can end up being less expensive, even once back in Canada.
You need to be well informed about the customs procedures in force for the type of boat you have chosen and its origin.
It has to be said that the Canadian tax system is not very encouraging compared to that of our southern neighbors, especially if you plan to leave the boat in the U.S. or elsewhere (outside Canada). In fact, at that point, no further taxes apply to the purchase (certain conditions apply).
An experienced broker can guide you through all these steps. That’s what we do at Ita Yachts Canada / ProprioBateau.
The important thing is to avoid buying on impulse, always sticking to your criteria, and buying the right boat to avoid disappointment.
A well-thought-out approach, a good broker and careful consideration are the keys to a successful transaction.
There are always exceptions in the market, especially for manufacturers of megayachts and superyachts. As proof, the Ferretti Group announced at the last Boat Show in Dusseldorf (January 2024) that its financial figures are higher than at the same time last year.
It has to be said that the economy is not difficult for everyone. The number of multimillionaires and billionaires in the world seems to be on the rise. So yacht builders in the 75′ plus category don’t have too much of a problem with the order book.
We are thinking here of the various large groups such as :
- Azimut-Benetti
- FerrettiGroup
- Sanlorenzo
- Princess Yachts
- Sunseeker Yachts
- Sunreef Canatamarn
- Horizon Yachts
- Damen
- Feedship Superyachts
- Lurssen Superyachts
- Heesen Superyachts
- Overmarine
- The Italian Sea Group
- Baglietto
- Ocean Alexander
Indeed, the Ferretti Group (7 brands) revealed sales of 856.4 million euros and adjusted EBITDA of 124.8 million euros for the first nine months of last year, up 9.8% and 17.7% respectively on the corresponding period of 2022.
But it’s always difficult to get the facts right for these major manufacturers. Numbers are often a private preserve, and the leeway for the final selling price is fairly flexible.
Appendix 1
Quite significant drop for some manufacturers:
Chaparral and Robalo: down 35% for the 4th quarter.
Chris-Craft and Barletta: down 27.8% for the last quarter.
Mastercraft: down 38.5% over last quarter
These are declines compared to previous periods. But manufacturers had anticipated these declines in view of the post-Covid period and the economic situation in North America.
The question is whether this will last and, above all, for how long…
We are certainly seeing a slowdown, but it remains to be seen whether this situation will persist over the coming months.
CHAPARRAL:
ROBALO:
CHRIS-CRAFT:
BARLETTA:
MASTERCRAFT:
DISCLAIMER
The article presented on this page is for information purposes only. This information is provided as editorial (i.e. opinion). The information presented in this article is presented in good faith and, while believed to be correct, is not guaranteed. Ita Yachts Canada does not warrant or assume any legal liability or responsibility for the accuracy, completeness or usefulness of the information and/or images displayed, as they do not suggest anything in relation to this article, indeed no association can be made with respect to the images and the article. All information in this article is subject to change without notice and is without warranty. It is the reader’s responsibility to verify the descriptions and statements contained in this article. The brokers at Ita Yachts Canada assume no responsibility for any conclusions the reader may draw. The purpose of this article is to promote boating in all its forms. It gives one point of view among many.
