Back to Used

I have decided to start doing this monthly think tank called Blogger, what is a sort of editorial if you want to call it so. Blogger will be featured at the start of each month, hoping this to be also an interesting read for you. This new monthly column starts with a nagging to the editorial of Italian magazine Nautica, written by Lucio Petrone. Now the editorial of Nautica if you can read Italian is always interesting, with an intelligent summary of the market and where it needs to improve. The editorial of October though went a bit off track in its suggested problem solving for the huge number of used boats staggering the market in recent years. Mr. Petrone went on to say that in order to reduce this problem which is slowing the selling of new boats, the Italian government should introduce scrapping incentives similar to those offered in the car industry. His reasoning was that more to cars, building new boats is always profitable for the companies and the state. Yes lets scrap those old boats so the builders keep enjoying the boom enjoyed in the last years!

Now to start comparing boats with cars is never good in all cases. For this is that unlike an automobile, a boat represents usually a second home, in certain circumstances it can also be the first, and the value of it is also to the minimum much more compared with the road vehicle, in purchase and maintenance costs. A boat buying decision is also more or less derived from a passion with many owners doing huge sacrifices to keep there hobby going. Now that the market is full with second hand boats is a fact, that half of these are for sale from passionate owners wishing to upgrade or change is also the other face. I am sure that these owners will be thinking to invest somewhere else if they had the gut feeling that they are buying scrap!

As the other dark side to the boom period of the past years which helped double production to most of the builders, some of these and there dealers over valued trade ins for part exchange with a new boat. Now the builders which did this find themselves in a reduced cash flow and a yard full of used boats. Not an easy situation! For these builders survival will surely be more difficult to those having no liquid capital as are used boats, but instead of waiting for a full blown production to come back soon, what they have to do is to integrate new services as renovation to old models, a concept some builders like Hatteras are doing for example. If they have over flooding of used boats for sale in stock, rumour is that some have about a hundred craft, I think an auction sale system should be introduced by these especially with those models sitting in the yards for a huge period. The market sooner or later will get back in balance and may be this slow down is a bit of a blessing in disguise, as it reduces new boat production, and puts back the fact that a used boat can represent a huge opportunity for a buyer. I think suggesting the scraping of used boats whatever the age just puts more pressure to the second hand market which is as today in its historical lows, although some boats in the past months have been moving.