The jump in UK luxury boats sales post-Brexit
According to UK newspaper The Guardian, the UK luxury boat manufacturing industry has been an unexpected beneficiary of the fall in pound Sterling.
The weakness of the pound triggered by Brexit has attracted foreign investors, and sales rose 50% year on year in the second quarter of last year. Not only are manufacturers able to target expansion of their position within the European boat market, they can also hope to compete as equals in the world’s biggest boat market in the US.
“Brexit bargains”, as British-made goods look cheaper
Pound Sterling has experienced record weakness since the Brexit vote in June 2016.
This unexpected weakness of the British pound has resulted in uncertainty surrounding the outlook for the British economy, leaving foreign investors unable to gauge the attendant long-term risks. However, there is an opportunity to acquire UK investments, including properties in London where a real estate boom continues, at prices that are low in absolute terms.
It is not surprising that, as an extension of this trend, demand for high-end products such as luxury boats has spiked. With many investors drawn to the prestige of goods “made in Britain”, if such goods are also available at a competitive price, they cannot be ignored, it seems.
The most obvious example of this phenomenon is the recovery of Fairline Yachts, based in Northamptonshire in the heart of the UK. Known globally for its Targa motor yachts, Fairline went into administration in December 2015, with the situation deteriorating to a level where it was bought up by Russian investors in January of the following year. However, the company booked record sales last year, capitalising on its products being “20% cheaper than luxury boats from other countries”.
Antony Sheriff, Executive Chairman of Princess Yachts, based in Devon in Southwest England, also confirms a beneficial impact from Brexit. Earnings at Princess in the second half of last year rose 20%, with gross profits up 50% (year on year). Also, business is booming for British boat maker Sunseeker, with orders up 40%.
With pound Sterling expected to continue to weaken, Sheriff and others expect the UK luxury boat market to continue to grow. Many customers are private investors, and it seems that large boats for large parties are popular.