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i-maritime News Service

Luxury boats business zooms around 10% as cash-rich southern businessmen live life king size - 2013-06-12


India's market for luxury boats and yachts has grown by around 10% in the last three years - incidentally, a period signified by the slowest economic growth in decades - as cash-rich real estate developers from Hyderabad, jewellery chain owners from Kerala, businessmen from Chennai and miners from Bengaluru look for a slice of good life that was previously a reserve of the moneybags of Mumbai.

Phiroze Contractor, managing director of Ava Marines, a yacht dealer and an operations and maintenance provider to boats and yachts, says Chennai alone accounted for five enquiries in the past four months while there were none last year.

Anju Dutta, MD of Marine Solutions, a boat and yacht seller, says she in the final stages of the sale of a 55-feet yacht to two real estate developers from Hyderabad. The two realty players are jointly purchasing the yacht to sail in Goa where they had purchased new homes. "Businessmen from younger generation purchase boats or Yachts on an impulse,'' says George Pottakulam, executive director, Indmerc Marine Pvt Ltd, a boat dealer for last five years. Indmerc's sales have more than tripled in the past three years to 10 crore last year from 3 crore.

Players like Ava and Marine Solutions mostly procure yachts from the US, Italy and France. In a typical deal, clients will have to pay 30% of the value of the yacht upfront and have to give the requirements they need in the machine - demands often include spa and jacuzzi facilities, bar, state of the art music systems, and high-end navigation systems including fish finders. The full and final payment needs to be made a week before the fourth month when the yacht will be delivered.

Yet, it's not all smooth waters for this niche segment. Dutta of Marine Solutions say the customs duty hike by 20% to 48% in the last budget has pushed up the cost of yachts by 30%. Lack of marinas to park the boats and yachts, and heavy surveillance after the terrorist attacks of 26/11 have created hurdles for boating enthusiasts as coast guards repeatedly check them.

Nevertheless, dealerships for such luxury machines are rising. Orient Flight, an aircraft flying school in Chennai sought a dealership from Ava Marines to sell Yachts and boats in Chennai. "Chennai, Kerala and Hyderabad are new markets for me," says Marine Solution's Dutta, adding that there wasn't anybody buying boats and yachts about a year ago from the four southern states except some smaller boats by hotel chains and state governments to promote tourism.

The floating luxury market is moving southwards, and for a change, no one's complaining.

Source: The Economic Times