Not for Finance

With Bavaria filing for bankruptcy I think it is finally proven that the boat building business is not cut for financial institutions.  Many have tried in the past with different type of business models from the luxurious giants with a handful of brands, to a one brand show, and now to one of the largest production boat builders in the globe.

In most cases it seems to never work out, and now this latest Bavaria story confirms more then ever the notion that boat building is really not made for financial institutions.  Looking back to this story at hand it did not seem to happen since Bavaria went to the Dusseldorf 2018 boat show full guns blazing with novelties and a nice outlook for the future, including of which the presentation of its largest motor boat to date with the new R-55.

This Bavaria falling follows what came at the end of 2017 when Brunswick announced it intended to sell Sea Ray, possibly it's largest in its fifteen boat company portfolio.  In the press release that Brunswick communicated it said that it will concentrate more on the outboard market which has seen a big expansion in the last decade especially for boats under the forty feet in the United States of America.  

This was a surprise announcement from Brunswick considering the recent expansion Sea Ray has been getting as for example the introduction of the fifty feet plus L-line yacht range introduced three years ago, which today features six models and goes up to 65 feet.  It will be interesting to see if really Brunswick will sell Sea Ray, as financials have a habit of doing this to evaluate the price of the asset.  Whether they do it  or not, at a point Sea Ray will need a plan to move forward, which if Brunswick is not motivated to do, will mean the asset  is really for sale.  

Brunswick sale of Hatteras has favoured it very well, with Cabo which was included in that sale not so much since it was closed and dusted.

Being fully luxury based, pleasure boat building is a difficult business to predict and understand with the human side of operating things and building the boats making part of a complicated equation.  Business choices and operation is also very different to say car making which is what most people like to compare boat building to, and here business institutions must understand that apart a nice degree when managing boat builders one needs persons who understand the boat building sector inside and out.