People 'taking longer' to purchase dream yacht


HanseYachts one of Germany’s leading yacht builders, predicts the global recession will trigger a slump in sales as customers postpone plans to buy boats, according to a Bloomberg report.

‘We don’t think that the crisis will be over in half a year,’ Chief
Financial Officer Udo Potthast said, ‘It will be a longer process.’

HanseYachts fired 110 employees in the second half of 2008 and about 70 of
its remaining 500 staff are working shorter hours to compensate for a drop
in orders. The world economy will shrink for the first time in almost 50
years this year, according to the Institute of International Finance.

In Germany, the world’s largest exporter, the government has proposed
stimulus measures to cushion the economy against recession, including paying
half of employers’ social insurance contributions for short-shift workers to
discourage job cuts.

HanseYachts is using the shorter week to try to and hold its workforce
together. The boat-builder may take advantage of the government proposal to
extend the current six months of truncated hours, Potthast said, adding that
there are no plans to reduce the workforce further.

Yacht builders throughout Europe have been hurt because of lower demand for more expensive leisure activities such as sailing. Beneteau SA, the world’s
biggest yacht builder, last month said it expects a ‘pause’ in profit as
customers rein in spending on its yachts. The company also said temporary
lay-offs affecting a total of 3,500 workers would begin this month.

Poncin Yachts, the French maker of Catana catamarans, was forced to seek
bankruptcy protection last year after failing to reach an accord with its
creditors and as demand for its Harmony sailboats slumped in countries such
as Spain. Rodriguez Group SA, the maker of Mangusta and Leopard motor-driven
yachts, also reported plunging sales last year and has been struggling to
get rid of its stock of second-hand craft.

‘The problem is that customers are no longer spontaneous about making their
dreams come true,’ Potthast said. ‘They think about it much longer that they
used to.’

Prices for HanseYachts vessels equipped to its normal standard and excluding
sales tax range from £61,000 to £730,000, putting them in the same
price category as luxury cars and luxury homes.

HanseYachts shares declined 86 percent last year as Germany, Europe’s
largest economy, fell into the worst recession in at least 12 years. The
company, which went public in March 2007, has a market value of £21.1 million.

Capacity utilization should increase in the months ahead so that the company
can reduce short-time work, Potthast said.