The luxury yacht market caters to the niche business tycoons and industrial empire owners around the globe.Â But in India, the market is a different ball game altogether with few names like Vijay Mallya, Anil Ambani, the Diwans, the Tatas, and the Godrejs, having the luxury to afford one.
For the record, Luxury yachts in India start from Rs 1.8 crore approx. But it is not just the fancy price tag attached to the segment; a lot has to do with the geography of the country.
One of the few players in yacht dealerships in the country, Giira Yachts, shares that the money lies in cities like Delhi and Chandigarh and unfortunately they do not have the privilege of having a water body, which can be used for sailing, leave alone yachting.Â The density of the population is exposed to luxury yachting lies in Mumbai (being the highest), Goa, Chennai and Kochin.
Of course, the world of luxury yachting in the country revolves around HNIs or High Net Individuals, who are exposed to the dealerships and yachts through impressive VIP cocktail dinners or exclusive parties where the dealers and manufacturers pass on their tale from word of mouth. There are small yachting events held for this niche crÃ¨me a la crÃ¨me where the sales pitch is made.
The dealers claim to have professionals on board who take care of the maintenance of these yachts and the after sale services, since each yacht needs a half yearly to an annual service where each and every part and working is checked and repaired.
Despite such investments in the upkeep of vessels, none of the big luxury yachts are being manufactured in the country, as for the dealers, some deal with specific brands and some import yachts from abroad. The cost of importing a yacht is high as the one has to pay around 30 per cent customs duty as well as the import charges. Hence expensive players cater to expensive individuals.
Thus, the growth isnâ€™t as aggressive as in the West. Navnit Marine, another dealer of luxury yachts, says that thought the trends are changing because the number of HNIs are increasing, the marketing is through word of mouth and only the niche corporate giants are targeted. The growth is not much as there is not enough demand, yacht is not a luxury car, it has a lot of other intricacies involved, and therefore the industry is stagnant.
Bayliner, Meridian, Princess, Trophy Fishing, Sessa Marine, Harris Flotebote, Novurania, Mercury Inflatables, Yamaha Jetski are the products and brands that Navnit Marine deals in.
India isnâ€™t Venice
Most of the dealerships not only sell yachts but also give the option of chartering as they are not used all throughout the year. Hence, because of the low usage and premium pricing, in many cases there is multiple-ownership, where the yachts are shared by private owners and travel and tourism industries. When the private owners do not utilise the yachts its full potential is pushed by lease-holders and the maintenance is taken care of by a third party, this entire venture reduces the cost factor by a very large margin.
Burgess Yachts India states that there is potential in the market for selling yachts but the demand is almost next to nil, there are users from both East and West coast of the country. â€œWe market our products mainly from London but we are involved in a lot of PR activity in India. Our USP is that we advice, educate and then sell the products to whoever enters our doorstep.â€
Burgess like many other dealers in the country sells all brands on demand and also second hand yachts and boats. The basic luxury yacht that Burgess avails to its clients starts at$ 1 million and spans 60 feet.
Cruising in Indian waters
Anything that ranges from the 33 feet to 50 feet segment comes under the luxury boat segment in India. Majesty yachts from Dubai, Sun Seeker and Princess Yachts from the UK and Azimut with Feretti from Italy are the prime suppliers in to the Indian dealers.
The majority of the luxury yacht market are in areas such as Mumbai , Goa and Kochi, among others there is Vishakhapatnam, Gujarat and Madras, which are developing in terms of luxury yachting.Â These regions are abundant with water bodies and can be used for berthing of the yachts, an extremely necessary factor for the growth of yachting in the country.
Even though due to the downfall of the Indian economy in the last two years, the luxury segment of yachts has grown over 33 per cent in the last five years. Since the reduction in the demand of luxury yachts in the United States and European countries, the segment has increased three times since 2006-07 and a number of foreign companies have invested in approaching Indian shores in terms of yacht sales.
According to industry reports the market has seen a presence of around 125 luxury yachts that lie under the 50 feet category which amounts more than 70 per cent of the total luxury boat market. The number of boats in the range that lies above 50 feet is less but since the cost of such boats is high they contribute to more than 60 per cent of the industry which is a total of Rs 650 crore business in India (2010-11).
A sporting push
Giving further fillip to the industry, YAI is one of the primary Indian bodies that facilitates and encourages the sport of yachting, the three categories that it affiliates itself to include competitions, leisure and cruising and motor boat activities.Â It is also officially recognised by the Indian Olympic Association and the Ministry of Youth Affairs and Sports as the governing authority for sailing, windsurfing, motor boating, powerboat racing and personal watercraft, at sea and on inland waters in India. In addition, YAI is affiliated to the International Sailing Federation (ISAF), which is recognised by the International Olympic Committee (IOC) as the governing authority for sailing worldwide.
As such the YAI is responsible for promoting the sport in the country.
The basic factors involved in the development of yachting in India are
â€¢Â Â Â Investment from High Net Individuals
â€¢Â Â Â Availability of Dealerships
â€¢Â Â Â Education and awareness
â€¢Â Â Â Proper infrastructure such as berthing docks and marinas
â€¢Â Â Â Manpower for annual maintenance
â€¢Â Â Â Support from the government
Marinas are a necessity, just like a car, if you own it you got to park it, marinas are the spaces where yachts berth, a single marina can hold a number of 30 to 40 yachts. There is only a single marina in the country in Bolgatty Island, Kochi. The lackluster facility available in the country is also a major factor that is responsible for the hesitation of a customer when they go in for luxury yachts.
Even though India is a costal country the correct kind of infrastructure has not yet been developed for such products.Â Moreover, luxury yachts also require maintenance services, which is a cumbersome and long drawn process.
Various known yacht owners today are facing issues regarding evasion of taxes and there is no support from the government to curb this. A lot of yachts owned by Indian HNIs have been ceased and are under litigation.
Winds of change?
The future of yachting is undefined as there are optimistic and conservative outlooks that tell us different stories. There is a dire need of infrastructural development and regulatory bodies. With institutions like FICCI and CII investing in boating forums, the next big thing can become yachting, but there is also uncertainty about the development of marinas which will pose immovable objects before an unstoppable forces.