Source: Superyachts.com
Azzam, thought to be the world’s largest yacht.
Just as the luxury superyacht industry recovers from the
global financial crisis, it sails into another storm as wealthy
Russians, hit by the weakened ruble, look set to put off their
purchases.
Speaking to CNBC at an industry event this month, the chief executives of some of Europe's leading shipyards expressed their concerns about business from Russia's mega-rich.
"Someone who is ruble-based suddenly has to pay twice as much for a yacht, clearly that must have an impact," Peter Lürssen, CEO of Lürssen Yachts, the builder of the world's largest superyacht Azzam, told CNBC.
"Then the overall economic situation in eastern Europe is very difficult and possibly degrading. So far we have seen no impact on our business, but I can see it will
get more complicated and more difficult in 2015."
Speaking to CNBC at an industry event this month, the chief executives of some of Europe's leading shipyards expressed their concerns about business from Russia's mega-rich.
"Someone who is ruble-based suddenly has to pay twice as much for a yacht, clearly that must have an impact," Peter Lürssen, CEO of Lürssen Yachts, the builder of the world's largest superyacht Azzam, told CNBC.
"Then the overall economic situation in eastern Europe is very difficult and possibly degrading. So far we have seen no impact on our business, but I can see it will
get more complicated and more difficult in 2015."
Cancelled projects
The latest threat to the superyacht sector comes just as
the industry has begun to pick up since the financial crisis in 2008.
The number of super-yachts sold –which are mainly second hand – has
surged from 262 in 2011 to 412 last year, with the combined asking
prices rising from 2.5 billion euros to 3.2 billion euros in the same
period, according to data from Boat International.
The number of new orders plunged from 1,008 in 2009 to 763 the following year as the financial crisis took its toll, but has since been steady. Wright said concerns over Russian interest could dampen the bright outlook in 2015.
"2015 was projected for a very good reason to be the best year since the financial crisis, it probably still will be in many ways…(but) no sooner do we get out of one crisis then for whatever reason we get into another," he told CNBC.
The number of new orders plunged from 1,008 in 2009 to 763 the following year as the financial crisis took its toll, but has since been steady. Wright said concerns over Russian interest could dampen the bright outlook in 2015.
"2015 was projected for a very good reason to be the best year since the financial crisis, it probably still will be in many ways…(but) no sooner do we get out of one crisis then for whatever reason we get into another," he told CNBC.
Ruble trouble
Since the beginning of August 2014, the dollar has seen an
84 percent rise against the ruble as international sanctions damaged
the Russian economy and the dramatic fall in oil price added an extra
headwind. Over the last few days, fighting in Eastern Ukraine between
Pro-Russian rebels and the Ukrainian army renewed pushing the dollar up
against the ruble on Monday.
Russians are one of the biggest buyers of superyachts, industry chiefs told CNBC, highlighted by billionaire Chelsea soccer club owner Roman Abramovich's 162.5 meter boat called Eclipse. The price of the vessel was reportedly above $1 billion.
Read MoreLuxury yacht makers sail into China
Gary Wright, the co-founder and chairman of yacht brokerage Y.CO, said that the material impact of the ruble crisis has already been felt.
"I'm aware of one or two projects that have probably not gone ahead or deposits have gone ahead and been lost because of what has happened recently," he told CNBC.
Russians are one of the biggest buyers of superyachts, industry chiefs told CNBC, highlighted by billionaire Chelsea soccer club owner Roman Abramovich's 162.5 meter boat called Eclipse. The price of the vessel was reportedly above $1 billion.
Read MoreLuxury yacht makers sail into China
Gary Wright, the co-founder and chairman of yacht brokerage Y.CO, said that the material impact of the ruble crisis has already been felt.
"I'm aware of one or two projects that have probably not gone ahead or deposits have gone ahead and been lost because of what has happened recently," he told CNBC.
'Bright spot'
But there is a reason for optimism with one yacht-maker
suggesting that while he is expecting "softer demand from Russia" U.S.
customers are coming back to the market providing a "bright spot" for
the industry.
"I hope that Russia will come back. Russia is a very important market now it is a little bit quiet. But by the same token America is a bigger market and is picking up," Mohammed Al-Barwani, chairman of Oceanco - the shipyard behind the 88.5 meter Infinity being delivered this year – told CNBC. Oceanco did not disclose the price due to client confidentiality.
"I hope that Russia will come back. Russia is a very important market now it is a little bit quiet. But by the same token America is a bigger market and is picking up," Mohammed Al-Barwani, chairman of Oceanco - the shipyard behind the 88.5 meter Infinity being delivered this year – told CNBC. Oceanco did not disclose the price due to client confidentiality.
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