Kiwi luxury boat-builders in the global market

New Zealand is probably best-known in the sporting world for the All-Blacks, its bruising national rugby team. But as an island nation, it’s also known as a bastion of hard-nosed sailing and boating knowledge.

“Being so far away from all places except for Australia, they’ve had to make amends generationally, and it’s almost part of their DNA to figure out things if they need to,” said Rob Humphreys, a yacht designer who has had several projects built in New Zealand.

That aptitude no doubt contributed to consecutive wins for Team New Zealand at the Americas Cup, in 1995 and 2000. The victories, and the technology developed to help secure them, raised the profile of sailing in New Zealand, and of its elite yacht builders, who have carved out a market share out of proportion with the size of the country.

That yachting industry, like the rest of New Zealand, took a hit during the economic crisis of 2008. Both have emerged relatively unscathed, but for different reasons.

“New Zealand survived the financial crisis much better than Europe did — the banking sector held up well, and there was no housing crash,” said Calista Cheung, desk officer for New Zealand at the Organization for Economic Cooperation and Development.

Ms. Cheung attributes much of that growth to rebuilding efforts after the 2011 earthquake that battered Christchurch. But New Zealand’s exports, which include luxury yachts, are a different story all together.

A strengthening New Zealand dollar, bolstered by the Australian dollar, has made New Zealand’s exports less competitive. Buyers have less incentive to travel all the way there to build their yachts when shipyards in the United States, the Netherlands and Italy could offer similar quality closer to home.

“We lost our exchange rate advantage that we had for so many years,” said David Porter, the managing director at McMullen & Wing shipyard.

Because the local market for megayachts is so small, New Zealand has to find ways to lure overseas buyers.

“People that are building new boats are consciously spending money in their own backyards so they can be seen supporting their own economy,” said Ian Cook, the managing director at one of New Zealand’s leading shipyards, Yachting Developments.

When considering potential new markets for megayachts, China is one of the first possibilities mentioned.

“People have an expectation that there’s a sleeping dragon down there,” Mr. Cook said. “There’s a belief that there’s an awful lot of wealth in China, and clients will buy boats. But because they haven’t grown up around boats, it’s going to take a while for that cultural shift to happen.”

Mr. Porter recounted an exchange with a potential Chinese customer.

“I had a client come in and say he wanted a superyacht, but without any engines,” Mr. Porter said.

The client, he said, didn’t need any engines for his yacht because it would be for business purposes only. A floating and luxurious corporate ballroom moored in the murky waters of a port would be enough.

Mr. Porter’s response? “No, absolutely not,” he said...

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(Source: Google News: The New York Times.)