Chinese builder cites price as competitive advantage

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Yachts being built today by Chinese companies are similar to those in the United States and Europe, except for one major difference – the price.

For example, the Alaska line of yachts from Shanghai Double Happiness Yacht Co. costs half of what it would typically cost for a yacht from an international manufacturer such as the U.S.-based Brunswick Boat Group, the China Daily newspaper reported.

Foreign-made boats, according to the Chinese shipbuilder, carry an average price tag of $3.17 million, but the price includes a 43 percent tax that foreign shipbuilders need to pay to import their boats to China.

“The engine and spare parts are imported from Italy, England and the U.S. So technically they are of the same quality as international brands in terms of performance,” Shanghai Double Happiness general manager Zhou Juan told the newspaper. “The only difference is that we are much cheaper.”

But another major difference is the target consumer. After years of disappointment trying to export their yachts overseas and after the global economic downturn, Zhou says Shanghai Double Happiness and other shipbuilders, such as Hunan Sunbird Yacht Co. Ltd. and Kingship Marine Ltd., which is based in Hong Kong, have turned their attention to the growing number of affluent Chinese.

According to the China Cruise & Yacht Industry Association, there are about 350 shipbuilders in China, including about 20 producers of megayachts, which measure more than 80 feet in length. All told, Chinese shipbuilders generated about $429 million in revenue in 2010; shipbuilders worldwide generated about $3.4 billion.

The association said it does not have the total number of boats sold in China for that year.

“The most competitive advantage in China’s yacht industry is still the lower cost of its skilled work force because it can take as long as eight months, or even one-and-a-half years, to build a boat, consuming thousands of hours,” Zhou said.

Although labor may be cheaper in China, the process of building yachts is relatively new to the nation, which is why many boatbuilders have turned to international help.

All of the designs for Shanghai Double Happiness, for example, are imported. The company worked with Ed Dubois, a fellow of the Royal Institute of Naval Architects and the Royal Academy of Engineering, to design its ships. It also hired foreign engineers to work on the production, repair and maintenance of its ships.

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Comments

2 comments on “Chinese builder cites price as competitive advantage

  1. john

    I don’t think I would trust a boat or yacht coming from China. We have seen some of the materials that they have imported to our country that turn out toxic. Thier free use of lead and mercury is scary. In some cases of trying to get major warranty related problems taken care of in this country by manufacturers from this country has proven difficult where you you even start when dealing with a country like China. We have lots of skilled workers in this country that are looking for work and if we keep the unions out and the companies honest it could be wonderfull thing.

  2. Blake E. Davis aka "Pilothouseking"

    I’ve inspected, run, surveyed, and sold some damn nice yachts built in Mainland China such as Selene, Marlow, and Hamptons.. as high tech, and as well engineered as any other builder in the world, and IMHO are far superior to Taiwan built boats which are still “old school” and ARE prone to “cutting corners” when your (or surveyor) is not watching. China started with a clean slate and has built some incredible factories, airports, railroads etc. THEIR infrastructure is brand new- ours is outdated. They are taking steps for the future whilst America is in decay. Do you realize that China has more English speaking citizens than anywhere in the World? When a country EXECUTES executives for cutting corners and corruption, that has a tendency to square up slackers and thieves. How many American Corporations have been totally ruined by idiot executives who walked away with millions of dollars for their incompetence?! I’m not even going to address our “work force” with America’s rampant drug, alcohol, and food abuse with the expected results.

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