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Is the China-US trade war a challenge or an opportunity for China's yacht manufacturing industry?

Is the China-US trade war a challenge or an opportunity for China's yacht manufacturing industry?

  • 2020/06/02


Is the China-US trade war a challenge or an opportunity for China's yacht manufacturing industry?



During the Sino-U.S. Trade war, after the United States added a tariff of US $ 200 billion in goods, China added an additional US $ 60 billion in tariffs on goods. As you come and go, the tax-increased products include many yacht-related products, including whole ships and machinery. , Spare parts, etc. What kind of challenges will this trade war bring to China's yacht industry? But from another perspective, is it also an opportunity?




Such a large-scale trade war will inevitably have a serious impact on the yacht industry with such a long industrial chain, and will also be a serious challenge to the developing yacht industry. There are about 400 Chinese yacht manufacturing companies, including 100 whole boat manufacturing companies and 300 spare parts manufacturing companies. Among them, according to the data released by CCYIA, more than 80% of the main core parts, accessories and materials such as machinery and spare parts required for yacht manufacturing rely on imports, and more than 90% of power and electromechanical equipment, many of which are from the United States Imported equipment, especially small and medium-sized yachts. According to the data obtained from the survey, if no alternative products are found, the manufacturing cost may increase by 15% -20%. Of the 300 equipment and spare parts companies, most of them rely on exports, and the products are mainly sold to Europe, the United States and Australia. In particular, the spare parts required for the production of small yachts are mainly exported to the United States. As can be seen from the list of trade wars between China and the United States, China imposes an additional 25% on diesel engines required for yachts, an additional 5% on gasoline engines, and some machinery and equipment; and the United States imposes tariffs on Chinese products. In the list, some commodities are not necessarily dedicated to yachts, but they are also in the range required for yacht production. Therefore, the Sino-US trade war will inevitably have a certain impact on the yacht equipment manufacturing industry and needs to be paid attention to.




China's yacht manufacturing output accounts for half of its exports and domestic sales. Except for a few brands such as HEYSEA and FAREST, few yachts have their own brands for export. Most are mainly OEM production, mainly exported to Europe, the United States and Australia In particular, the proportion of small and medium-sized yachts sold to the United States is relatively high. In the list of goods subject to tariffs imposed by the United States this time, ships, yachts and other vessels used for recreational sports are included, so yachts exported to the United States will be significantly affected. If the cost increase caused by imported equipment is superimposed, the impact will be more obvious for the entire yacht manufacturing enterprises that depend on exports, especially those exporting to the United States.



The Sino-US trade war will still have a certain impact on the yacht market. After 10 years of development, the domestic yacht market has expanded from the tall luxury yachts to the normal market situation with small and medium-sized yachts as the main market. However, among the small and medium-sized yachts, sports boats and speedboats are almost dominated by imported brands from the United States, and a few from Europe Imported from Japan. In the list of China's 25% tariffs imposed on the United States, there are sports yachts, which can be imagined for the developing domestic yacht market. How to face challenges will test the strength of the enterprise.



As can be seen from the above discussion, whether it is the manufacturing industry or the yacht market, the impact of the Sino-US trade war on the yacht industry will be obvious. Although such a result is said to be caused by the trade war, it is also necessary to see the structural problems of the yacht industry itself, especially the yacht manufacturing industry. Is it also an opportunity when facing serious challenges?





China's yacht manufacturing industry has a history of more than 30 years. Its products range from small yachts to superyachts. The product category is relatively complete, but its influence in the international market is limited. Except for a few self-owned brands such as Starfish and Far East, most of them are mainly exported in OEM mode, especially small yachts. As for why it will attract European and American buyers, in addition to meeting the technical quality requirements of buyers, having a certain price competitive advantage is the biggest reason, but the inspection system for export yachts is also one of the key factors. The inspection system for exported yachts is more flexible and practical, which improves production efficiency, while the type inspection allows small yachts to have the premise of mass production, which greatly reduces production costs and inspection time. This has also prompted a considerable number of yacht manufacturing companies to prefer to focus on the export market, but it is precisely this export model that adds more uncertainty, such as the reduction in orders caused by the global financial crisis in 2008. This time, the Sino-US trade war, foreign exchange fluctuations, etc. have had a small impact on manufacturers exporting to the United States. But in turn, the Sino-U.S. Trade war also prompted yacht export companies (not only yacht and boat spare parts export companies, but also import yacht agency companies), in a complex international economic environment, the risk of relying on a single market Think about it.





When it comes to why some companies are more willing to export, in addition to the initial stage of the domestic market, the above-mentioned inspection method of the domestic yacht production process is an important reason. If the produced yacht is used in China, the requirements of the inspection agency for the parts and equipment required in the manufacturing process are much higher than the inspection standards used by yachts abroad. The failure to meet the type inspection standards has led to the inability of the company to conduct mass production. The same company can produce products that meet the standards of European and American users, but may not be able to meet the domestic use standards, resulting in the cost of yacht manufacturing on the domestic market. It is much higher than exports. This can be seen from the market share of imported small yachts and domestic small yachts. For example, after the type inspection of domestic small sailing ships is achieved, the market price is much lower than that of imported sailing ships of the same type. Possessed. The large sailboats that cannot achieve type inspection are still mainly imported sailboats, and domestic small and medium-sized sports boats that are also unable to achieve mass production can hardly compete with American sports boats, resulting in the domestic yacht market being almost occupied by American brands.


China imposes a 25% tariff on US imports of speedboats, which will affect the sales of US speedboats, which will be an excellent opportunity for domestic yacht manufacturing. But for the yacht market with complete market behavior, good quality and price-performance ratio can attract users. At the same time, how to reduce the manufacturing cost of domestic yachts, whether it is possible to implement the yacht production inspection standards in line with international standards, is it worthy of management's consideration? Yachts under 24 meters are not required by IMO to meet the requirements of international conventions. Various countries and regions can formulate specifications according to their own requirements. However, in the domestic yacht manufacturing inspection, they fully comply with the IMO mandatory requirements for commercial ships. the way. This of course can guarantee the quality and safety of yachts, but for yacht manufacturers, it reduces efficiency and increases costs, resulting in the strange phenomenon of yachts that can be exported to Europe and the United States to compete, but cannot compete with imported yachts in China. If this situation does not change, even in the face of the sudden opportunity, it can only be a sigh and helplessness.


Cut down cost or keep the high quality?


It seems that it is a paradox, because it is rarely difficult to have both high quality and cheap price for every product. But why not start from the marine hardware when you still confuse on picking up which part as the "cut down cost" progress??

There is no doubt that we still can search some good products or supplier from the internet if you spend more time to do this job, it will helpful for your business not only in the special time but the further business development.

For Example, we need to keep the quality of the marine seacock or the seawater strainer, because they are so important that will make sure our boats working well, we do not need to worry about the sink when all of them are broken.





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