Boatbuilders discuss market uncertainties and challenges

Conference highlights market challenges

SOUTH AFRICA: “We know we are living in challenging times. At the moment markets are tough, and I think we need to embrace opportunity where we can,” Ed Slack, Editor in Chief of IBI Magazine told delegates, mincing no words in a hard-hitting keynote address at the opening of the inaugural African Boating Conference.

Describing the challenges faced by European boatbuilders, Slack echoed the scenario facing local manufacturers reliant on the US market. Despite a small “Trump bump” experienced at the outset of his presidency, President Trump’s tariffs have had a dire impact on the market across most types of boats.

With the exception of freshwater fishing vessels, Slack reported that sales were down by double digits – ultimately resulting in a surplus of inventory in the market.

“American consumers are feeling the pressure and tariffs have been a nightmare for European manufacturers exporting to the US,” he said highlighting the importance of the market. To make things worse, the impact of tariffs is multiplied by increased inflation and a weaker dollar causing massive price fluctuations for American buyers.

“An effective 25% hike on a boat costing $5 million is substantial,” he said, emphasising how watching this happen over a short period has had devastating consequences on consumer confidence.  “This means that boats cost about 40% more than they did five or six years ago and the margins are becoming slimmer,” he added.

Within this scenario, Slack suggests that there are too many smaller players all producing very similar products.

This has also created a buyer’s market where discounting is now being actively applied while manufacturers simultaneously pursue new markets. “Africa is the next frontier,” he concluded, outlining the impacts of geopolitics and economics.

Noting the resilience of the superyacht market, Slack did confirm that boat sales for vessels over 30m are less exposed to political influences and other fluctuations caused by tariffs, inflation and pricing.

Endeavouring to provide some clarity for the future he admitted that, while a more optimistic outlook predicted a recovery as early as the second quarter of next year, some believe that it may take longer and that a more buoyant market for boatbuilders should only be anticipated in 2027.

In the meantime, he believes that the market could see a “return to the basics” with a focus on removing some of the costs associated with making a boat a home-away-from-home. “We’ve been adding more and more creature comforts, more technology and more bells and whistles and a lot of the time this is not really necessary,” he said.

“Getting back to basics means getting back to what boating is really about. I think we will see a shift in mentality to realising that a boat can just be a boat,” he concluded.

A South African boatbuilding perspective

It is no secret that the tariffs applied by the Tump Administration have alarmed the local boatbuilding sector and discussions at the conference confirmed that the local sector has been proactively engaging with the South African government to help address the issue at a diplomatic level.

With most of the boats exported from South Africa destined for the United States, one boatbuilder suggested that the boat prices had increased in some cases by up to $5 million per boat. The stakes are high for the local industry, and they are relying on ongoing talks between the two countries to result in a “fair and equitable trade deal”.

Input confirmed that representatives from various South African government departments have undertaken several visits to local boatyards for a better understanding of the economic impact and the opportunities for the market.

“No stone is going unturned,” said Theo Loock, CEO of Robertson and Caine as he praised the efforts of the South African Boatbuilding Export Council (SABBEX) as well as the South African government and members of parliament.

PHOTO: Robertson and Caine boatyard. (SOURCE: Robertson and Caine PR)

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