THE LEISURE BOATS MARKET

An Expert's View about Pleasure and Sporting Boats in Turkey

Last updated: 25 Sep 2011

Turkey is surrounded by water on three sides: the Aegean to the west, the Black Sea to the north and the Mediterranean to the south. Additionally, the Marmara Sea, the Dardanelles and the Bosphorus straits are also located in Turkey. There are approximately 290 shore facilities on Turkey’s 8,333 km (approx. 5200 miles) of coastline. There are 165 ports accommodating ships of over 500 gross tons. Some ports are conventional ones that can handle a wide variety of cargo with a wide variety of equipment, whereas some are more specialized, such as container ports.

There are several large lakes (natural and artificial) as well as numerous small lakes and reservoirs in Turkey. There are numerous rivers in the country, Kizilirmak being the longest, 1,355 Km (approx. 850 miles) in length. We can safely say that neither the lakes nor the rivers, except for rafting in very few places, have yet to be used for leisure boating. The main reason is the wide availability of seas. Additionally, rivers vary in the amount of water seasonally; there is an unstable security situation in the eastern and south eastern regions (where the Euphrates and Tigris rivers are), a low welfare of inhabitants, and a lack of infrastructure in these areas. These are the main reasons why leisure boating is not yet fully developed. However, officials are trying to encourage leisure boating in the Ataturk Dam reservoir and Lake Van area by arranging sailing races for very small sailing boats.

Due to an advantageous geographic situation, Turkey has long been a dominant force within the shipbuilding industry, and has achieved specialist status in the production of ships for short sea shipping. Turkey ranks eighth in ship building in the world; first in Europe.

The Turkish yacht industry has been developing a strong reputation since the 1960s, especially among European customers, with the traditional production of wooden gullets from Bodrum. After the 1970s, the Turkish yachting industry started coming into its own; with the investment decision of Italian Fabio Perini in Turkey in 1980s, Turkey is now a major location for yacht production. The celebrity Bernie Eccelstone, a Formula 1 organizer, attracted attention to the Turkish boat building industry after specifying his preference for moving his yacht orders to Turkey, since there is high quality production not the cheap process. Some of these celebrities have dubbed Turkey “the secret boat-building area of the world” and have continued to invest in this market. Investors and high quality products made Turkey third in the world for mega yacht production. Currently, some companies located in Turkey are focusing on sophisticated engineering skills, instead of relying on a cheap work force to win business from more expensive markets in the West.

The yacht production is aided by well-established and renowned Turkish after sales servicing. Both high quality workmanship and reasonable prices attract international yachts to Turkish waters for after sales servicing. This has resulted in an active parts industry, both serving the yacht producers, as well as the after sale providers. Exception is products such as deck equipment, which have negligible local production of high technology parts. This makes the importation of products such as engines, radar apparatus, electronic maritime parts, etc. into the country mandatory.

Turkish buyers are very receptive to U.S. products. American suppliers are known for their high quality and technologically sophisticated products. High technology products such as compression, ignition, internal combustion, piston engines of various sizes, radar apparatus, and most electronic apparatus are major import-products that Turkish buyers would gladly welcome from the United States.

A. MARKET HIGHLIGHTS & BEST PROSPECTS
o Market Profile
Turkey is the 7th most visited country in the world, and yachting has a remarkable share in this ranking. Turkey specializes in the super (24-40 meters long) & mega (40 meters and longer) yachts building, and it ranks 3rd in mega yacht building in the world. On the contrary, local production in the small leisure boats is limited, therefore the market mostly relies on imports of yachts of up to 24 meters (approx. 80 ft.) in length. The super yachts and mega yachts are custom designed and custom manufactured according to the needs of the customers, in specialized boat yards.
Between 2004 and 2008 the leisure boat building sector enjoyed significant foreign investment with a number of the world’s higher profile yacht builders looking to Turkey to set up production facilities either as subsidiary companies or by working with partner companies. Examples include Vitters, Nedship, Oyster and Perini Navi.

Increase in the yachting industry also brings the need for new marinas. In 1984, there were only two marinas in Turkey with a total capacity of 435 yachts. However, today, the total number of marinas is 46, with a capacity of 26,000 yachts, and is expected to grow. Turkey is one of the fastest developing countries in this industry. Approximately one million yachts regularly tour the Mediterranean, and Turkey’s aim is to meet 5% of the demand, which is around 50,000 yachts, given the limited possibility of growth in Europe.

The same success seen in the yacht industry applies to the parts market, as well. Turkey, being one of the product centers for yachts, and also a major service provider for yachts traveling in the region, has also become a large parts consumer. The Turkish yacht industry currently uses high quality import parts in addition to the ones that are produced locally at reasonable prices.

o Best Sales Prospects
Products with the highest sales potential include inboard/outboard engines, marine communications, flow meters, and all similar electronic apparatus of high quality.

B. COMPETITIVE SITUATION
o Domestic Production
Modern yacht production is relatively young in Turkey. Regulations of the previous Turkish governments promoting deep-sea ships also attracted interest in yacht production and local producers became more successful in the production of yachts for foreign markets.

Industry benefits from the high quality and cheaper labor force, resulting in very competitive prices and more foreign firms transferring production to Turkey. Yacht producers are spread around the country, continuing their production in small facilities. Most builders have been involved in the boating business for generations; however, in the last decades they have converted their family production facilities into more modern production facilities, and commenced exporting to other countries, such as the U.S., Netherlands, Germany, Italy, Greece, France, etc. Production lines grew tremendously from the classical to modern contest lines. Depending on the order, these facilities can also provide CE marking, which is very important. A few years ago, a yacht produced in Antalya was selected as the “third best yacht” in the world at the Monaco International Boat Show.

There is significant production in some parts, like generators used for boats, and deck equipment of anchor windlass, steering systems, capstan, deck cranes, boarding ladders, gangways, etc.

o Third Country Imports
Italy, followed by the United States and France, are the largest suppliers in the Turkish leisure boat market. The U.K. and Germany are other important suppliers. The Undersecretariat of Maritime Affairs in Turkey says there is a higher demand for leisure boats between 5-9 meters (16-30 ft.) in length. Jeanneau, Bavaria, and Beneteau are the top suppliers in Turkey, followed by Fair Line, Azimut, Sea Ray, and Princess Yachts. Beneteau, Bavaria, and Grand Soleil are popular sailing boats, whereas Fairline, Sun Seeker, Ferretti, and Azimut are popular in the motor yachts market.

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Posted: 24 September 2011, last updated 25 September 2011

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