I am just back arriving home from another journey to France to visit our partners at the Beneteau yard. This fact alone does normally not make for a whole article unless I can show a new boat or tell the story of “how it´s made”, like I have done is so many times over. No. This time it´s different: It is year two of Covid and things aren’t back to normal. Instead, we are talking of a “new normal”, that is: Bringing people to get a vaccination, wearing masks, showing digital sanitary passes and alike. Well, this is not a political blog nor an occasion where I discuss such things, but looking back to almost two years of worldwide turmoil and craziness, making a yard visit with clients was such a big deal that it indeed justifies an own article.

Beneteau´s headquarter at the Atlantic Ocean

Saint Gilles Croix d´Vie – as usual – was such a treat! I was lucky and had not only the chance to go an visit Beneteau´s birthplace and headquarter again and show this to two of our clients who have bought an new Oceanis 51.1, we also had the luck to meeting at the Atlantic ocean coast during a rare phase of late-summer high temperatures, blue sky and a perfect sunny day. What else could we have wished for? Life is like the never ending circle of high and low tides: Sometimes all the luck in the world has you, the sun shines and there is no rain whatsoever. And then the coin is turned, the water retreats, low tide´s arriving and live tests you to breaking point. I guess, this is something we all learned during the past two years. How are things going in the boating industry? Well, here is again – a very personal and very own – account of how I see the business, the market and the development.

Yard open, good order situation and normal proceedings

We have high tide right now. With lockdown hitting hard (at least that was how we all perceived it) in March 2021 and the closing of factories, people being told to stay at home and news full of bad stuff, we all kind of waited for the Zombie-apocalypse, which luckily never came. We´ve had a great selling season and all yards, dealers and clients enjoyed a great year. Yes, of course, there have been some struggles and late deliveries but all in all, it went by just fine. We should be grateful and happy that the apocalypse did not come.

The yard is open for our clients again

Instead, the yard is now back to normal: As we arrived the great guys from the Beneteau Premium Service welcomed us at the headquarter. Everything was just fine and went the way I knew it from “before”, well, apart from the masks we´ve had to wear of course. All was fine: My clients received the full yard tour from the cutting of GRP-matrasses, over to lamination and vacuum infusion. They were able to see the various stages their boats are to be built and the team took great care to answer all questions and go into details.

Wonderful to see so many boats being made again

All is fine? Yes, it is indeed: Our company has had one of the best sales seasons ever. People – luckily! – never really stopped dreaming of boats and acquiring yachts. They stopped for a brief moment, waiting, sorting things out and being careful. But once they understood that life went on – hindered, masked and maybe hidden – they regained confidence and had an even bigger hunger for freedom. The freedom of the sailor is the sea. And what you need to be out in the sea is a boat. So, in turn, Beneteau and most major yards I know of are back to normal levels of production and indeed celebrated one of their best selling seasons – despite of boat shows cancelled and travel of clients restricted. Everything is fine, isn´t it? Not quite so, as it turns out …

Scarce production slots, delivery problems

The two clients I went to France with are a lucky few. Right now – we have October – most yards have two problems. First: They are sold out. That may sound good as one could say: “Well done! Production is safe, the field is tilled – now work and harvest in the coming months!” But it is not that easy. With the Zombie-apocalypse at hand, most yards scaled down production rapidly. Facilities have been closed, contracts terminated and even precious employees laid off. This is crucial. Think of it: If a yard scales down its production, say, from expected 1.000 units to 300, it is not just their own resources scaled down, but those of their contractors and suppliers too. That said, they do order 700 Diesel engines less, for example. The supplier for engines must then in turn scale down its production and cancel contracts with his suppliers, let´s say, of tubes or – this going to be important – computer chips for engine controls. On a boat there are hundreds of parts supplied by hundreds of companies.

One another Oceanis 51.1 finished … many more needed.

As our clients were lucky to see the yard in full swing, hulls being made, engines being mounted and people swirling around working shift by shift to manufacture yachts, the reality behind it, the math behind it, is rather troubling: With production scaled down in the first weeks after lockdown, the whole supply chain of a yacht down to a single VA-steel screw, the epoxy resin of the hull and – you guessed it – to the valve-controlling chip of an engine has been affected too. Worldwide. Not just Beneteau, but all of those yards. All of those car makers. Name it. At the same time the big charter fleet companies face a crash-year: No bookings at all. Not a single booking. What did they do? They began to sell off large stocks of their fleets, preferably the old, worn-out boats. Surprisingly, there was some demand … With travel restrictions lifted and whole states free to travel again, bookings soared. Peaking out. A boom in the charter industry.

A happy new owner

The outcome was simple: With rising demand but reduced boats to offer those fleet operators ordered large amounts of new boats. Not just the staggering numbers of their annual refreshment orders but also the replacement of the sold older boats from the spring/summer. Boom! Yards accepted these offers happily, a huge gasp of belief in the whole industry and handshaking all around: The crisis is over! Well, is it? No, of course not: With production scaled down, facilities closed and mothballed, people laid off and – worse of it all – supply chain disrupted, the industry now faces a challenge harder than expected: How to scale up the production that quickly? As it turns out, this is nearly impossible and a huge problem.

The ebb and flow of the boating industry

You have to start at the single VA steel-screw. You have to secure the shipment of thousands of cubic metres of epoxy resin. You have to get your engine company to supply you with Diesels quickly again. “The yard is sold out” is a nice marketing gem and really conveys the feeling of a wanted product, not easy to get and sought after. It may look like something good, but it is actually something bad. The low tide is arriving: High demand meets low production capacity. The whole industry is struggling hugely to being able to return to their production numbers pre-Covid. But with a supply chain disrupted to the tiniest part it is a tremendous task for managers and buying agents to get the production to a point where it can meet demand. At least, this is how they all tell the story of the current situation. I am not sitting at the Directors of Board´s tables of course. But as far as I am concerned, it at least sounds believable and logical.

Low tide arrives: When will the water return?

My clients have had a wonderful day in Saint Gilles at Beneteau Headquarter. Seeing the yard fully open up and running and in the end being able to see their very own boat swimming in the test-pool ready for shipment in a few days made them cry in happiness. And many others will join in this wonderful occasion of finally receiving their yachts But behind the curtain, like in so many other branches of our economy, a relentless battle is going on. It is not only the boating industry. Chips are rare as gold dust now, timber prices climbed to mind-boggling heights and unbelievable things happen all over the world in all sorts of companies. I don´t know how this is all going develop. Really, I am not an economist nor a manager. I think I´d rather stick to what I can have an influence on: The smiles of our clients, for example, who did indeed have some great days in France and will certainly have hundreds more on their new yachts.


You might as well like to read:

Corona and winter troubles

Corona and the boating industry, part 1

Deliveries amidst lockdown