Brunswick forecasts China yacht sales to increase 25%

Lake Forest-based Brunswick Corp., owner of the Boston Whaler and Sea Ray brands, forecasts sales growth of 25 percent in China this year as boating gains popularity, Chief Executive Officer Dustan McCoy said.

“We believe the long-term potential in the marine business is larger than anywhere else in the world,” McCoy said in an interview April 2. “There is so much wealth here it is unique. Boating culture will take hold very strongly.”

Government attempts to clean up the country's lakes, a growing appreciation of family-oriented leisure pastimes and rapidly increasing prosperity are driving demand for vessels from dinghies to yachts, McCoy said in Hainan, southern China, where he attended a luxury fair.

Brunswick sold about 55 boats in China last year, accounting for 35 percent of the 180 boats shorter than 40 feet long (12 meters) imported into the world's second-biggest economy. McCoy said that makes Brunswick the Chinese market leader in that class.

Brunswick, whose share price has surged 37 percent this year, expects sales growth in China this year to match the 25 percent posted in 2010, he said. The stock rose 0.6 percent to $25.59 on April 1 in New York trading.

Demand for larger boats is growing in China, and the company plans to introduce its Meridian and Hatteras yachts that are as long as 100 feet, McCoy said.

Princess Yachts, owned by French luxury goods maker LVMH Louis Vuitton Moet Hennessey SA, started selling in China in 2009. It's already sold five luxury boats in China, including a 95-foot yacht bought by a Dalian property developer last year.

“China is really coming online,” said Nigel Robert How, general manager for Princess Yachts Asia (Singapore) Pte. Ltd. said in an interview on board an 85-foot boat on display worth about $6.2 million. “There is a lot of interest for bigger boats.”

China had 447,000 millionaires in 2009, a 31 percent increase from the year before, according to a report by Capgemini SA and Merrill Lynch & Co., ranking it behind the U.S., Japan and Germany.

“The level of wealth creation taking place in China is reaching an inflection point, resulting in exponential growth for high-end luxury goods,” said Aaron Fischer, a consumer analyst at CLSA Asia Pacific Markets.

In addition to more than 15 yacht-makers at the Hainan fair, other exhibitors included Boeing Business Jets, Ferrari and Porsche.

Brunswick vessels on display included a 47-foot-cruiser, the Meridian 441, which sells in China for 7.8 million yuan ($1.2 million) inclusive of taxes. China imposes a 43 percent levy on imports of boats, according to data from China Customs.

The nation accounts for 1 percent to 2 percent of global yacht sales of $3.4 billion in 2010, the executive said.

Brunswick entered the Chinese market in 1998 and has sold over 600 private luxury yachts to Chinese customers, it said in a press release.