Continued Success: 2006 Global Order Book Shows Luxury Yacht Builds Continue to Increase

Reflecting continued optimism in the face of a rapidly changing global political and economic climate, the luxury yacht market continues driving upward, albeit at a more sustainable pace. After a banner year in 2005, which revealed a market increase of 28.4% due to pent up demand post-9/11, the market continues growing with 81,631 feet of yachts representing 688 projects currently under construction or on contract. The increase, 5,746 feet more than last year’s total, is mainly due to motor yacht projects 80 to 119 feet and also those 150 feet and larger.

Orders for motor yachts 120 to 149 feet show a 5% decline. Sailing yachts continue their slide, down seven to 52 boats accounting for 8% of the total number of builds. However, Palmer Johnson returns to its roots with a 90-footer due for an October 2006 launch. It’s reported that Lürssen is building a 295-footer, the largest sailboat on the list.

The open-style yacht, a category that rocketed onto the scene in the 2005 Global Order Book, is holding stable at 87 builds. Interest in expedition yachts, which slowed last year, has taken hold again with orders increasing by 35%. Attribute part of this to Northern Marine: Four of its seven builds are expedition yachts, compared with one in 2005. New builders in the mix also contributed to the increase. Nationally, China and Brazil are the leading builders of the breed. (Click image to enlarge)

Azimut-Benetti retains its position as the top builder on the strength of its total construction footage at 8,237 feet. The Ferretti Group, with 77 charted yachts under construction, surpasses Benetti’s hull count by eight but trails in the total length by 180 feet. These two builders, together with 20 other Italian yards, keep Italy atop the Builder Nations list with a commanding 260 yachts accounting for 29,591 feet under construction, increases of 5% and 8%, respectively.

Country Rankings Change

Although the United States and United Kingdom each suffered a 4% decrease in orders, it wasn’t enough to change their respective rankings of second and fourth among the Top 10 Builder Nations. In fact, the top four retain their standings. Germany moves up into fifth place with an increase of 1,180 feet and two additional builds. China moves up to sixth, largely on a bonanza of 82-footers reported by Marlow Marine. Denmark moves into eighth place with an increase of 1,426 feet and a 93% jump in the number of projects. Peter Johansen, president of Royal Denship explains the increase is due to an order from Peters plc., a British distributor adding 85- to 105-foot yachts to its portfolio in response to clients wanting bigger yachts but wishing to remain within the dealer’s service network.

Custom Rankings Shuffled

The line between custom and semi-custom yachts is becoming increasingly blurred, particularly among larger, semi-production offerings. Owners of semi-custom yachts are often no longer first-time buyers and believe an investment of $20 million-plus entitles them to more than just choosing gloss or satin finish on their joinery. While the production builders have responded with multitudes of variations, there is still a substantial difference between enclosing an aft deck and moving the hot tub and starting from scratch.

View the complete 2006 Global Order Book here.

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