The financial crisis of 2008 and 2009 put yacht manufacturers in a very difficult position. Stock markets in and around Asia were doing very well in the early 2000s. At that time, China’s economic growth and infrastructure development were already high, and the Chinese began to show interest in luxury yachts. Boat builders jumped at the chance and set up showrooms near newly built marinas in China. Chinese boat shows, like the one in Shanghai, brought even more manufacturers into the industry. Hong Kong was still the main port at the time, as Chinese buyers bought and moored their yachts in Hong Kong due to the zero rate in Hong Kong. All this interest in the industry created a lot of buzz and the industry grew steadily as more and more manufacturers rushed into China. Other industries throughout China were also doing very well, and wealth was growing at a rapid rate. Many of the big luxury yacht manufacturers decided to expand to improve their delivery times and thus capture markets. They also believed that the expansion would be a low-risk move, because even if the European or US markets slowed down, the Asian markets, especially China, would still have customers to absorb their production.
In 2007, the Hong Kong stock market hit a new high and many news channels and so-called professional investors once again said that the market had reached a new high and would not fall again. Businesses were running smoothly, markets were booming, and banks were lending. The hype surrounding China’s growth and wealth led to rumors among manufacturers about how many ships were being sold in China. Agents and manufacturers exaggerated the number of high-end luxury boats they sold. Because of this hype, many yacht builders around the world had taken out large loans, purchased a large quantity of building materials, and were expanding their factories on a much larger scale. And then the unthinkable happened. The financial markets crashed in 2008. Needless to say, many yacht manufacturers were now facing bankruptcy. Although exchange rates were favorable to the Chinese, and some high-end clients bought yachts to take advantage of the exchange rate, these sales were not enough to bail factories out of financial debt.
As the markets crashed, public companies started losing money and customers in most Asian countries stopped buying yachts, except for some customers in China. Most of the money from Chinese customers came from internal development in China.
Even years after the market crash, yacht builders still found it difficult to recover. Many famous Italian and British yacht makers were acquired by Chinese companies. In 2015, many of the yacht builders are still bouncing back. The effects of this recovery can still be seen today in many factories. Today it is still possible to buy new boats with engines and generators that were built in 2007, because the factories still keep the stock they bought back then.
The 2008 market changed the dynamics of the yacht manufacturing business. Reckless expansion to capture market share led to huge financial losses as financial markets crashed, forcing many yacht makers to sell their businesses. Economically strong Chinese companies saw the opportunity and bought many of Europe’s yacht factories, shifting control and ownership of some very famous brands from the West to the East.
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