Yatch India
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Transcript of Yatch India
Team: Blue Ocean PlanIT(IIFT Delhi)
Sector: Luxury Yacht Mahindra Odyssea
BY:
Dhruv Bhatia
Manvi Bajpai
Sirish Gupta
Yash Saxena
Boating Industry Segments: Market Presence in segments comprising 70 % Revenues >
Sectors US UK Avg.
Marina/Storage 5.96% 8.64% 7.30%Boats sold 38.40% 42.06% 40.23%
Servicing/Maintenance 5.16% 23.85% 14.50%Equipment 19.40% 12.15% 15.77%
Engine 4.67% 8.10% 6.39%Others 26.41% 5.21% 15.81%
7%
40%
15%
16%
6%
16%
Revenue Sectors
Marina/Storage Boats sold Servicing/Maintenance
Equipment Engine Others
3. Enter:Odyssea
7 % + 6% + 40%53% Market presence
4. Enter:Odyssea Services7%+ 6 % + 40% + 15%
~70% Market presence
1. Enter:Ocean Blue JV
7%
2. Enter:Mahindra Marine
Engines7 % + 6%
13% Market presence
The Market segments in recreational industries was analysed in US & UK to arrive at indicative figures
3 -4 YearsCapacity: Projection India under scenarios
Good Capacity (No. Projects)
Medium Low
1200 (20-30) 600 (8-10) 300 (4-5)
Blue Ocean15 Projects
Aquasil3 Projects
H2O3 Projects
Goa Yacht Heaven1 Project
1. Marina Capacity: Estimation >
Kochi, Bolgatty MarinaAwarded to Gulf Marinas. The Indian arm is Ocean Blue Marinas (49% partners of M&M).
MIBS, Marina
CompanyNo. of
Projects Status Locations Capacity
Blue Ocean 1Under Const. Cochin 50
15 Planned Maharashtra 700 ?
Goa
Kerela
Tamil Nadu
Orissa
Chhattisgarh
Gujarat
H2O, Rajiv Somani 1 Built Goa 11
1 Planned Goa 50?
1 Planned Mumbai 50?
Aquasil 1 Planned Goa 50?
1 Planned Chennai 50?
1 Planned Kochi 50?
Goa Yacht Haven Pvt Ltd, 1 Planned Goa 300
Umaji V Chowgule
Total Planned 1300
Sujoy Chahal-Another Opinion 8 Estimates India 800?
Source:http://www.marinebusiness-world.com/index.cfm?nid=45585, IBI News
Source:http://IBI News.com
Others ?
Marina Segment: Revenues >
Typical returns in Marina business: 10-15%Depend upon
Rent Rate in Market
Depend upon
Growth in coastal population growth
Abundance of boat sizes in > 12 m segments
Depend upon
Integration with Hospitality/ Tourism and Travel industry
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
1990 1995 2000
India US China
Small boats can also be stored at ‘Rackonium’
Rack storage is cheaper; Hence more suited for Indian markets
However larger than 12 Mts boat can’t be stored in racks
Rackoniums could be one of the opportunities for mahindra
Condominiums or Residential marinas give higher returns on investment.
Mahindra is already into hospitality hence option of developing marinas at places where it can create synergy with Hospitality business of Mahindra can boost returns.
50- 75% Market share450 CroreInvestment estimated in IndianMarina segment@ 1300 berth capacity
Return @ 10%45 Crores Calculation:A Marina returns its Investment over a period of 10-20 years.Assuming median value of 15 Years to break even gives 8 % return.PPP Partnership will sweeten up the deals.
Calculation:As shown before ‘ Ocean Blue Wave’
16 Crores
Earning@ 75% market share& 51% equity.
Marina Segment: Revenues >
A 300 Berth MarinaUsually costs, 100 Crore and break evens in 10-20 years.1
US$ 25000-30000 cost per slip. 2
•Most Outboard Motors have a running life of 1500 Hours
•Average usage of Boats stand at 600 Hrs/year for Commercial usage and 200Hrs/Year for recreational personal usage. Hence commercial engine needs overhaul in two years
•Motors in the 200 HP range are priced at 3.5 Lac and are almost 40 % of the Boats cost .
2. Engines: OutBoard Engine Motors Market> Potential & Revenues
Export MarketDomestic Market
30 Cr
42 Cr
2012
2008
A US$ 2 Billion market
Indian Export: Only
US$18000
Both Export opportunity &
Domestic opportunity
@ 50% Market share & 66% & 33% Revenues from Domestic & Export markets
30 Crores
Potential ofNo. of Boats in
a country
Wealth, HNWIs
Per Capita Water Area available per urban coastal resident.
Sea ExperienceMarina/ Coastal Infrastructure
Boat Market: Factors affecting>
Inland and Coastal water area availability
12
43
86% Explained
by a statistical analysis onno. of boats and the factors listed on countries around the world
3. Total Recreational Boating Retail Market >
0
20000
40000
60000
80000
100000
120000
2002 2003 2004 2005 2006 2007 2008 2012 E
Imports in US$
2002 2003 2004 2005 2006 2007 2008 2012 F
888 682 620 5767 2,640 9573 28,475 109389.56
-35.14% -23.20% -9.09% 830.16% -54.22% 262.61% 197.45%
Imported recreational boats market to reach 400 Croresby 2012.Using a simple forecast based on Import figures for Recreational & leisure boats in India.We calculated a CAGR : 40% (3 Years) Based on the 2008 figure of 140 crore we get 400 crores by 2012.
Motor Boating Retail Market > India Potential
150 100 1000
Recreational Boats
Mumbai Goa
Total Floating Stock in India
Motor Boats Imported in 2007-08
100
250 530
20%growth based on
HNWIs growth rate
growth based on recreational industry CAGR
40%
No. of Boats Sold by foreign players by 2012
• Market is primarily in the small boatssegment
• Mumbai International Boat Show (MIBS)official told us last year MIBS sold only twolarge boats rest all were small boats
• MIBS estimates the total boat deals of $100 Million facilitated through the show
• The real market in India can be far largeras a large no. of boats (80% ) are notimported in India but registered at foreignlocations due to 35% import duty. BothMallya’s and Ambani’s boat are registeredwith foreign flags.
0
500
1000
1500
2009 2012 F
Marina Capacity Increasing
• Based on MIBS figures the overall market could grow to 1000-2000 Crores by 2012 calculated at 20%- 40% growth rates.
• Based on the growth in number of units imported- 250 and 530 at ASV of INR 50,00,000 total import market could be 125-265 crores. At 50% share of this market replacement can get revenues 60-120 crores.
Motor Boating Retail Market > India Potential Revenues
75- 100 Crores – Domestic Markets
Domestic market targets of 300 boats by 2012 is feasible at ASV of INR 25 Lakhs. Total revenues from Home markets could then be around INR 75 crores.
Defence markets- Coast Guards (1073 Cr), Marine Police (500 Cr) can bring in occasional additional large orders of that can amount to additional revenues.
Recreational Boating Retail Market > Target Segments
Marine police/Coast Guards
Boat Exports
HNWIsIndividuals
Hotels, Boat Clubs,
Sporting MotorBoats
Marine Police:With a budget of 72 Marine Stations.Need 500 boats
Indian Navy need 80 small boats.
India has 84000 HNWIs.
70% of these HNWIs live in Mumbai.
From 2005 to 2008 HNWIs in India grew @ 20%
HNWIs Investment & Buying patterns
Yacht, Car like Investments
Luxury Hotels in India maintain a fleet of even 20 Mercedes, Hence a possible buyer of Yachts.
Sporting events for Motor Boats, sports fishing events.
Indian Market Competition>
MO 22 and MO 33 are among the cheapest in it
Other players have already made huge dealer network and advertisement campaigns
Stiffer competition in 22 feet category
117
54
42 40 37 35 31 2919 15 14
0
20
40
60
80
100
120
140
Larson Cabrio 350
Beneteau Regal 2565 Window Express
Regal 2520 Bayliner 265 Cruiser
Cobalt 232 Cobalt 220 Cobalt 222 Sea-Doo Islandia
Mahindra Odyssea 22
Sea-Doo Challenger
Pri
ce (
Rs
Lakh
s)
182
67.555 50
0
20
40
60
80
100
120
140
160
180
200
Meridian Bayliner 300 Cruiser Mahindra Odyssea 33
Silvercraft SC34
Pri
ce (
Rs
Lakh
s)
20-27 feet segment
27-36 feet segment
France: Excellent market for <25 feet segment motorboats
USA and Canada: Big market for motorboats for younger crowd. High level of competition. So lowcost advantage will sell huge.
Italy: Very low tax on pleasure boating. Best sale is from 20-40 feet boats
Netherlands: Numerous but small waterways. Huge market ideal sale is for 32-36 feet
> Export Market Targets
• Outboard Motor Boat Sales in US: 150,000 Units; US$ is a 33 Billion • China is one of the leading exporters today of Yachts including the larger ones• Taiwan which also started with smaller boats did well initially to supply in export markets.• The lower boat segment is relatively more price conscious hence a definite market for Low
cost exports.
Motor Boating Retail Market > Export Market Potential
75- 100 Crores – Export Potential
Boat Business Inputs
Price- Low Cost labor
Technology & Design expertise
Brand Domestic Markets
India Yes (India canleverage on Indian working in Boating Industry in Gulf countries
Yes (As shown in small cars export- India has done better due to its relatively better availability of engineering talent
No Introductory
China Yes No No Maturity
Analysing the Floating stock available around the world. We found the favorites sub-segments in numbers.
Below 12 Mts 12-30 mtsAbove 30
mts
World Motorboats 14549 18446 1103 100.00%
Catamaran 433 222 18 2.98%
Small Cruisers 6208 353 12 42.67%
Pontoon 197 22 1 1.35%
Narrowboats 24 32 4 0.16%
Bowrider 1289 2 0 8.86%
Cuddy Cabin 2949 37 0 20.27%
Houseboats 360 970 42 2.47%
Categories to move in < 12 Mts Boat segment
> Cruisers (42.7 %) – Very high volumes in the> Caddy Cabins (20.27%)> Bowriders (8.87 %)
To be analysed further>Catamarns- Only 2.98 % present, Hence not a very favorable segment.
Historical Trends in Motor Yacht sub segment
World Floating Stock analysis : Product Development
Historical Trends in Motor Yacht sub segment
World Floating Stock analysis :
• Of the total available boats in 6-12 mts segment availability has decreased from 57% to 42% While availability has increased other segments
• The availability of New boats has decreased even more rapidly in the world market for below 6m segment.
• The new boats sold in US in Small and Large segments has also decreased over the years.
6-12 Mts12-30 Mts >30 Mts
Till 2000 9338 57.15% 10083 47.00% 531 37.00%
After 2000 7001 42.85% 11368 53.00% 904 63.00%
Used 14538 93.13% 18435 90.11% 289 20.76%
New 1073 6.87% 2024 9.89% 1103 79.24%
150000
200000
250000
300000
1980 2007
Smaller Boat
7000
12000
17000
22000
1980 2007
Larger Boat
After 2000 Market
6-12 Mts 12-30 Mts >30 Mts
Total 5021 7630 511
Sea Ray 584 Azimut 810 Azimut 40
Carver 361 Sunseeker 773 Falcon 32
Sealine 329 Fairline 566 Benetti 26
Jeanneau 259 Princess 557 Sunseeker 25
Silverton 208 Sea Ray 532 Burger 24
Bayliner 199 Ferretti 398 Maiora 23
Cranchi 178 Carver 378 Westport 22
Beneteau 172 Pershing 203 Mangusta 16
Fairline 171 Sealine 194 Overmarine 13
Meridian 144 Cranchi 158 Custom 12
Regal 127 Meridian 126 San Lorenzo 12
Cruisers 117 Cruisers 107 Cantieri Di Pisa 11
Azimut 115 Silverton 106 Isa 11
Bavaria 109 Astondoa 100 Baglietto 10
Positioning Matrix for all Boat brands >Scouting for partners- Analysis of other brands: Strategic Positioning
Sirena Marine of the group will produce yachts in Bursa in the name of Italian Azimut in turkey- A potential candidate for being a a low cost supplier
Searay is facing close downs and cost upscales
Hence the matrix can be used to find potential partners or Co- Branding strategic alliance partners, Potential manufacturers to whom Odyssea can supply as Low Cost Partners
Some other companies facing close downs and financial crunch could also be tracked down in the matrix Like ‘Couach’
Brand Building Through Strategic Alliances: Strategic Alliances for Co-Branding
• Disadvantage of the ‘Made In India’ and the unknown Mahindra name in this segment can be overcome withdesign collaborations with leaders like Pininfarina from Italy.
• Enter into co-branding activity which are suffering from the financial meltdown and provide them with cost effective manufacturing base in India and use their network to sell our boats in established market
• India also has an advantage of having High Skilled Indian workers working in the Gulf Boat building Industry which can be leveraged.
Yacht Brand building: The 8 Point agenda >
Luxury Brand
Experience
Tradition and heritage
Selective Distribution
High Price
Exclusive communication
Superior Quality
Superior Service
Imagery & story telling
Innovation & Creativity
Personal Selling outranks glossy advertisement in Boating MagazinesIndependent owned dealerships
Inviting customers to see their Yachts in construction
Stay in touch with the customer in a segment where repeat business will drive growth
Focus on Individual customisation
Independent owned dealerships & Consultants
Key demographics of first time boat buyers
Segmentation Characteristics % of Total Boat Owners % of Total Households Index
Fast Track Families 4.20% 1.00% 430
Country Casuals 5.7 1.6 367
Big Fish ,Small Pond 5.90% 2.1 285
Country Squires 4.00% 1.40% 278
Big Sky Families 2.30% 0.90% 243
Winners Circle 1.70% 0.80% 204
Shotguns &Pickups 1.30% 0.60% 202
God's Country 4.40% 2.20% 202
Blue Blood Estates 1.60% 0.80% 199
Mayberry Ville 5.00% 2.60% 190
66% male; 34% femaleMedian age of 37Married with children (1+)HomeownerHousehold income at least Rs 20,00,000Typically resides in rural/town and suburban areas