USDOC, International Trade Administration

 SOURCE:       USDOC, International Trade Administration
 PROGRAM:     Market Research Reports
 UPDATE:      Monthly
 ID NUMBER:   IT MARKET 111110221
 END YEAR:    1992
 UPDATED:     09/18/92
 | 9012
 | CC484
 | ISA
 | ISA9012
 | SPT
 | EC
 | EEC
 This article is derived from a report titled:  "The Pleasure Boat Market in
 Greece", dated December 1990, prepared by George Bonanos, American Embassy,
 Athens.  This article consists of 11 pages and contains the following
 Market Assessment
 Competitive Situation
 Market Access
 Trade Promotion Opportunities
 Best Sales Prospects
 Statistical Data
 As his flight touches down in Athens airport, a visitor looking out of his
 window and seeing the numerous tightly packed marinas can observe that there
 is a good market for pleasure boats in Greece.  Once on the ground and on
 his way to his hotel, the visitor sees boat dealer after boat dealer along
 the boulevard.  From a first glance, one would think that the pleasure boat
 market is thriving.  In reality, certain difficulties, caused by a lack of
 infrastructure, set restrictions on the market's growth.
 Although most of the major foreign pleasure boats firms are represented in
 Greece, U.S. firms can still find capable businessmen interested in
 generating sales for products new to the market.  U.S. firms, however, must
 be aware that pleasure boats are a luxury item in Greece and that their
 sales depend on people having extra money to spend.
 Presently, Greece's market for motorboats and cruisers is estimated to be
 around U.S. dollars 32 million and, its growth is expected to continue if
 peace and stability remain in the region (especially in the Gulf).
 U.S. firms hold nearly one third of the import market, and they lead the
 market for imported motorboats and small cruisers ranging from 6 to 8 meters
 in length.
                       U.S. Dollars Millions
                      1988   1989    1990       Est. Avg. Annual Real
                                                Growth - Next 3 Years
 Import Market          6.8    10.8    12.3       20.0 percent
 Local Production      15.5    18.3    20.1
 Exports                0.2     0.3     0.6
 Total Market          22.1    28.8    31.8       10.4 percent
 Imports from U.S.      2.5     3.2     4.2       30.0 percent
 (Greek Sources)
 Imports from U.S.      6.8             7.0        9.4 percent
 (U.S. Sources)
 Exchange Rates:      141.9   162.4   159.3
 Future Inflation Rate Assumed:                   19.0 percent
 1989 Import Market Shares (as a percentage of the total import market, based
 on Greek official statistics):
 U.S.A.:                       29.6 percent
 Italy:                        18.5 percent
 Taiwan:                       16.9 percent
 United Kingdom:               16.7 percent
 Japan:                         8.7 percent
 Total 1989 Import Market
 Shares held by European
 Community (E.C.) Countries:   40.2 percent
 Receptivity Score (1-4): 4 (Very receptive)
 Greece's total market for motorboats and cruisers in 1989 was estimated to
 be nearly U.S. dollars 29 million.  Nearly 40 percent of this market is
 supplied by imports.  The total market appears to have an annual growth
 rate of over 10 percent, while the growth of imports is expected to be
 double that; i.e. 20 percent per year.  However, imports from the United
 States are expected to grow at an even faster rate of 30 percent per year.
 Industry contacts explain that the reasons for this growth are the
 -    the exchange rate of the U.S. dollar to the drachma has been more
      favorable compared to the exchange rates of the British pound and the
      Italian lira;
 -    the U.S. boat builders have not increased their prices due to the
      industry's recessionary situation;
 -    Greek boat fans have realized the advantages and benefits of the
      guarantees which U.S. firms provide; and
 -    growth of the import market is achieved at the expense of domestic
 Industry contacts commenting further on the high receptivity to U.S.
 pleasure boats explain that this is due the following factors:
 -    competitive price;
 -    product reliability;
 -    a belief that a U.S. manufacturer and his agent will honor guarantees;
 -    high resale value.
 Although the overall picture for the market is very optimistic, there is one
 negative factor for at least 1991.  Some industry contacts express concern
 that due to the crisis in Gulf the market may actually fall in 1991.  This
 is because the Greek boating industry is heavily influenced by recession and
 higher fuel prices, both of which would be a likely outcome for Greece in
 the event of a war in the Gulf.
 As for actual market size, there is a significant difference between data
 concerning imports as presented by Greek and U.S. official statistics.
 There may be several explanations for the difference, such as U.S.
 statistics include Greek-owned vessels which end up under a foreign flag,
 while such boats are not included in Greek statistics.  The reasons for
 flying a foreign flag are that an owner either wants to avoid the Greek tax
 authorities or that a specific flag was prescribed to him by the bank which
 issued the loan for the purchase of the boat.  In reality, these boats fly a
 foreign flag and are usually owned by a Liberian, Panamanian, or Cypriot
 company which is ultimately controlled by the person who uses the boat.
 Another explanation for the difference in statistics is that certain Greek
 businesspersons purchase pleasure boats from the U.S. and then sell them in
 the markets of nearby countries, such as Cyprus.  These purchases would be
 captured in U.S. statistics but would show up in Greek statistics as
 reexports.  Both of these explanations may be true to some extent.
 Greece has hundreds of islands and an endless coastline.  Very few of the
 lakes are navigable while there are no waterways at all.  Therefore,
 practically all pleasure boats are used in the sea, and the models purchased
 are all seagoing vessels.  Traditionally, low budget boat owners had to be
 content with small rowboats which were sometimes fitted with an inboard or
 outboard engine.  Today, they have the option to purchase an inflatable boat
 which is light, fast, reliable and available in all sizes.  The light weight
 of the boat makes it ideal for being towed on a trailer or strapped to a car
 rack without requiring a powerful vehicle.  However, inflatable boats are
 not only for low budget boat enthusiasts.  Every year, larger and better
 models become available.  When fully fitted with motors and equipment, this
 can require a $30,000 - $40,000 budget.  The statistics presented in the
 statistical chart do not include inflatable boats, but their widespread use
 is directly related to the difficulties of owning a larger, better boat in
 Greece's large pleasure boat market has its foundations on the desire of
 individual Greeks to own their own boat.  The sea is accessible within a one
 or two hour drive for the majority of Greece's residents.  However, three
 negative factors make this desire difficult to fulfill.  These factors are
 cost, the lack of marinas, and government taxation.  Provided the boat
 enthusiast can overcome the negative factors of cost, marinas, and taxation,
 he will often chooses to purchase a small cruiser.  Local production
 satisfies the less demanding customers, with exports made on an irregular
 basis to some E.C. and Middle Eastern countries.  The more demanding
 customers show a preference for imports.  Industry contacts described the
 purchaser of U.S.-made pleasure boats as the successful businessperson or
 professional with two homes, two cars, and with excess money which he wants
 to spend entertaining his friends.
 Industry contacts say that in the area which surrounds Athens, where 80
 percent of the market for pleasure boats is, there is a shortage of 5,000
 mooring places.  On a nationwide scale, the shortage is 10,000 places.  This
 shortage creates a black market for mooring places and the congestion in
 most marinas is unbearable.  The government has an ambitious program for
 privatizing existing marinas and allowing the private sector to build
 additional ones.  Most contacts commented that new marinas will improve the
 situation but will not be able to satisfy demand entirely.
 Practically all pleasure boats sold in Greece are sold for private use.  The
 reason why they are not sold for chartering is that Greek law prescribes
 that they have a skipper.  This adds to the cost and when the boat is small
 the renter has no privacy.  There have been several requests to the
 government to remove this requirement, but, according to industry contacts,
 this will not happen for another year or two.  If and when this requirement
 is dropped, the market will acquire a new and important category of
 clientele, the motorboat rental firm.
 Another important factor which make prospective purchasers reluctant to
 purchase a boat is the lack of credit offered.  Although Greece's investment
 laws offer grants and subsidies to purchasers of sailing boats, such
 incentives are not available for the purchase of motorboats.  However, some
 purchasers of motorboats obtain credit directly from foreign banks, either
 directly or with the guidance of the Greek pleasure boat representative.
 Industry contacts suggested that if U.S. boat manufacturers become more
 involved with assisting their overseas customers to obtain credit, the terms
 of the credit could be better and therefore they could secure additional
 D.  BEST SALES PROSPECTS: Motor boats of a length exceeding 7.5 meters Motor boats of a length not exceeding 7.5 meters
 The segment of the market where U.S. firms have best prospects is that of
 motorboats and small cruisers ranging from 6 to 8 meters in length.  These
 sizes partially fall in both of the above product categories.
 The market for motorboats is broken down into two categories:  those over
 and under 7.5 meters.  U.S. boat manufacturers are highly successful in
 selling boats ranging from 6 to 8 meters.  The U.S. import market share here
 is approximately 50 percent.  Competition comes from Taiwan, Italy, and the
 U.K.  According to industry contacts, the market segment for boats under 6
 meters is dominated by local production, while Italy and France have the
 leading shares in the limited market for larger pleasure boats over 8 meters
 in length.
 Most major U.S. firms, such as Bertram, Boston Whaler, Hatteras, Bayliner,
 and Cris Craft have a presence in the Greek market.  Additionally, their
 major competitors such as Princess, Sunseeker (U.K.), Riva, Ferretti
 (Italy), and Jeanneau (France) are also present.  Most of the major agents
 represent U.S. as well as other foreign firms, in order to be able to carry
 a broad product range.  Most firms carry a limited volume of stock, with
 only one or two vessels on display.  There are, however, a few distributors
 which display 10 to 15 vessels.
 According to industry contacts, the advantage of U.S. firm is based on
 quality, reputation and service.  Price is also an important advantage, and
 U.S. pleasure boats not only sell at fairly affordable prices when new, but
 they also succeed in maintaining good prices when sold secondhand.
 Promotion is also important but boat enthusiasts appear quite knowlegeable
 about the subject from reading reports and tests in local and foreign boat
 Motorboats imported into Greece from non EC countries are subject to an
 import duty of 2.5 percent applicable on the CIF value.  There is also a
 Value Added Tax of 18 percent, which is applied to all motorboats (including
 locally produced) regardless of their origin.
 In order to enter the Greek market, U.S. firms must appoint an agent or a
 distributor.  Greek businesspersons frequent major international boat shows
 held in Europe, and U.S. firms can make good contacts at these shows.
 However, before making any commitments, U.S. firms are advised to obtain
 some information, such as a credit report, providing good information about
 the prospective agent.  One major boat importer commented that a U.S. firm
 seeking representation in Greece must be very careful when appointing an
 agent or distributor because the market is full of semi-knowlegeable boat
 importers.  He added that pleasure boats are expensive items with a seasonal
 market.  To make thing more difficult, style preferences change from time to
 time.  More than once, a successful Greek businessperson, such as a car
 importer, has diversified into the pleasure boat market, and then panicked
 when the summer went by with a portion of his stock unsold.  These
 businesspersons are accustomed to the auto market which moves much faster.
 Another problem is that several people visit trade shows outside of Greece
 and pick a boat that they like.  If the boat is not represented in Greece,
 they suggest that they be appointed agents for Greece hoping to reduce the
 actual cost of their own personal acquisition.  The result is that the boat
 manufacturer ends up with an agent, who may not actually be interested or
 capable of promoting the product.
 According to industry contacts, there are no difficulties related to meeting
 specific safety standards for pleasure boats in Greece.  In order to
 register a pleasure boat, the only documents required are the following:
 -  If the boat is under 6.5 meters in length, a certificate of suitability
    issued by the manufacturer is sufficient.
 -  If the boat is over 6.5 meters in length, the manufacturers
    specifications and a bill of safety are required.
 In preceding sections, we have mentioned several factors related to credit
 and financing which are important to the success of U.S. firms.  Following
 are several items related to the financing of exports to Greece in general
 which U.S. firms should be aware of.
 Over the past year, the government has liberalized the import payment
 process.  Banks are now virtually free to finance imports as they see fit
 and to make payments in foreign exchange without approval from the Bank of
 Greece.  As a consequence, the import payment process is similar to that
 used in the rest of Europe utilizing cash against documents, sight drafts,
 time drafts, and irrevocable letters of credit.  Greek banks have extensive
 correspondent relationships with U.S. banks, and Citicorp, Bank of America,
 Chase, and American Express all have offices in Athens.
 However, U.S. exporters should know that letters of credits and drafts are
 very expensive for Greek importers.  Banks require that the cash equivalent
 be on deposit before issuing any guarantees.  In a country where working
 capital loans now cost more than 34 percent in interest, this poses a heavy
 economic burden on the Greek importer.  To get around this, Greek businesses
 often seek cash against documents or extended credit terms of 30-60 days or
 longer from their suppliers.  European companies routinely deal on this
 basis making U.S. products less competitive, since U.S. suppliers unfamiliar
 with the market correctly require more stringent payment terms.
 An additional problem concerns the size of the Greek importer.  He is
 normally a small businessperson representing a number of different
 products/lines.  His orders are usually small, and he often cannot afford to
 keep large stocks on hand.  Therefore, he will request special consideration
 if a U.S. supplier demands large orders or asks him to carry a large
 inventory for reasons of service.  European supplies know the Greek market
 better, visit it more often, understand its peculiarities, and because of
 transportation distances are able to supply stock more quickly than their
 American counterparts.  Thus, they are often willing to provide easier
 credit terms to Greek importers than are American suppliers.
 U.S. banks and business should exercise caution in extending credit to Greek
 business.  It is important to obtain full credit background checks on any
 prospective recipient of liberal financing terms.  Most Greek businesses
 have an unhealthy debt/equity ratio and are highly vulnerable to changing
 interest rates.  Therefore, it is a good idea to run periodic credit checks,
 even on businesses which have good payment records.
 As a final caveat, we should point out that we occasionally experience
 payments disputes involving Greek banks which have inadvertently released
 documents, and therefore goods, before payment has been received from sight
 drafts and even letters of credit.  We can only conclude that in such cases
 we are dealing with an inexperienced Greek banking system and one in which
 personal relations (i.e. between bank employee and businessperson) can lead
 to actions which are detrimental to the supplier.  Therefore, we recommend
 that the U.S. exporter exercise caution at all times in selling to Greece.
 Drafts and letters of credit should clearly spell out all requirements for
 the release of goods, specify all currencies, payment terms, and details of
 quality/quantity of goods.  In short, nothing should be left to chance or
 interpretation.  Ninety-five percent of business with Greece is
 straightforward without problems.  It is the other five percent which U.S.
 bankers and businesses have to pay attention to.  In short, if you do not
 know your customer, exercise every precaution.  Above all, never/never make
 subsequent shipments to an importer who has been unable or unwilling to pay
 for earlier shipments.
 The following list includes names and addresses of key contacts in the
 Trade Associations:
 Association of Boat Importers
 c/o Aqua Sport
 20 Ellinikou Street
 GR-167 77 Elliniko (Athens)
 Phone: 01130/1/8981649, 8981650 & 8981651
 Fax: 01130/1/8981637 & 8981639
 Contact: Mr. F. Sidiropoulos, President
 The association has no offices of its own and operates out of the office of
 its President who is one of Greece's leading boat importers.
 Greek Yacht Brokers Association
 c/o Ghiolman Yachts and Travel
 7 Fillelinon Street
 GR-105 57 Athens
 Phone 011/30/1/3233696 & 3230330
 Fax: 011/30/1/3223251
 Contact: Mr. M. Ghiolman, President
 The association has no offices of its own and operates out of the office of
 its President, who is one of Greece's experts on issues relating to pleasure
 American-Hellenic Chamber of Commerce
 16 Kanari Street
 GR-106 74 Athens
 Phone: 01130/1/3636407 or 3618385
 FAX: 011/30/1/3610170
 Telex: 223063
 Contact: Mr. Simos Tsomokos, General Manager
 The Chamber is an association of local firms engaged in business with the
 U.S.A.  The Chamber and the U.S. Embassy organize U.S. participation in
 major Greek trade shows.
 Local Boat Dealers:
 Aqua Sport
 20 Ellinikou Street
 GR-167 77 Elliniko (Athens)
 Phone: 01130/1/8981649, 8981650 & 8981651
 Fax: 01130/1/8981637 & 8981639
 Contact: Mr. F. Sidiropoulos, General Manager
 Firms represented:   Sea Ray, Boston Whaler, Tiara (U.S.A.);  Princess,
                      Fairline, Sigma (U.K.);  Tresfjord, Marex (Norway);
                      President, High Star, Hylas, Ocean Alexander (Taiwan);
                      Clanship (Italy);  Sunway (Turkey)
 Alevin Boats
 510 Vouliagmenis Avenue
 GR-174 56 Alimos
 Phone: 01130/1/9928285 or 9913341
 Fax: 01130/1/9930055
 Contact: Mr. B. Alexandropoulos, General Manager
 Firms represented:   Bayliner (U.S.A.);  Tullio Abbate (Italy)
 Aquadynamics Marine Technosport Specialists Co Ltd.
 9 Epaminonda Street
 GR-166 74 Athens
 Phone: 01130/1/9622820
 Fax: 01130/1/9625219
 Contact: C. Riginos, Import Manager
 Firms represented:   Glastron, Rinker, Renken (U.S.A.);  Doral (Canada)
 Athinaika Kotera ltd
 2 Achileos Street
 GR-175 62 Athens
 Phone: 01130/1/9811820
 Fax: 01130/1/9818092
 Contact: Ms. D. Leshopoulou, Manager
 Firms represented:   Jeanneau (France/U.S.A.)
 Azzura Yachting
 48 Synassou Street
 GR-184 50 Piraeus
 Phone: 01130/1/9833395, 9830379 & 49265589
 Fax: 01130/1/4905621
 Contact: C. Mamfos, Manager
 Firms represented:   Carver Yachts, Invader (U.S.A.)
 2 Davaki & Posidonos Street
 GR-174 55 Alimos
 Phone: 01130/1/9848992
 Fax: 01130/1/9848227
 Contact: Mr. K. Themelis, Manager
 Firms represented:   Hatteras, Grand Banks (U.S.A.);  Ferreti Craft, (Italy)
 Importex Marine S.A.
 97 Syngrou Avenue
 GR-117 45 Athens
 Phone: 01130/1/9219411
 Fax: 01130/1/9224402
 Contact:Mr. D. Primikiris, Manager
 Firms represented:   Four Winds, Sunbird (U.S.A.)
 Ison S.A.
 32 Kifisias Avenue - Atrina Center
 GR-151 25 Athens
 Phone: 01130/1/6846253
 Fax: 01130/1/6846662
 Contact: Mr. M. Papatheodoulou, Manager
 Firms represented:   Grand Soleil (Italy), Hudson (Italy)
 Kappa Marine
 201 Syngrou Avenue
 GR-171 21 Athens
 Phone: 01130/1/9358222
 Fax: 01130/1/9358273
 Contact: Mr. A Katsoulas, Manager
 Firms represented:   Viking (U.S.A.);  Azimut, Diantoni, Rafaeli (Italy);
                      Sealine, BirchWood (U.K.);  Sea Hawk (Taiwan)
 Korfiatis Yachts
 76 Kalirois Street
 GR-117 41 Athens
 Phone: 01130/1/9237166
 Contact: A. Korfiatis
 Firms represented: Nimbus (Sweden)
 Kyriakoulis Mediterranean Cruises Shipping S.A.
 51 Posidonos Avenue
 GR-175 62 Palio Faliro
 Phone: 01130/1/9815207
 Fax: 01130/1/9817823
 Contact: Mr. K. Kyriakoulis
 Firms represented:   GIB'SEA (France);  Najad (Norway)
 Maritime Marketing International
 23 Papanastasiou Street
 GR-154 52 Psihiko (Athens)
 Phone/Fax: 01130/1/6722497
 Contact: Mr. K. Pontifix
 Firms represented:   Ocean Yacht (U.S.A.);  Guy Couach, (France);  Bruno
                      Benetti, Persing, Gianetti (Italy)
 9 Syngrou Avenue
 GR-117 43 Athens
 Phone: 01130/1/9234649
 Fax: 01130/1/3245476
 Contact: Mr. S. Constantinidis
 Firms represented:   Century, Glasstream (U.S.A.);  Wolfe (U.K.)
 Golden Dolphin
 15 Paleologou & Orfeos Streets
 GR-175 64 Paleo Faliro (Athens)
 Phone: 01130/1/9410105 & 9410153
 Fax: 01130/1/9410103
 Contact: Mr. F. Bouboulis, Manager
 Firms represented:   Bertram, Cris Craft, Cigarette, Trojan Yacht Formula
                      (U.S.A.);  Riva (Italy);  Sunseeker (U.S.A.)
 As stated earlier, leading international boat shows are frequented by Greek
 businesspersons and prospective buyers.  In Greece, several competing and
 conflicting boat shows have been held over the past few years.  The industry
 has finally decided to sort things out and to settle on one show which will
 be held twice a year.  The show is the International Boat Exhibition, and it
 is organized by Helexpo, the official organizer of the Thessaloniki
 International Show.  The International Boat Exhibition has been scheduled to
 be held in Athens from March 9 to 17, 1991, and in Thessaloniki from
 November 2 to 10, 1991.  The address of Helexpo is the following:
 Helexpo S.A.
 154 Egnatia Street
 GR-546 36 Thessaloniki
 Phone: 01130/31/239221
 FAX: 01130/31/229116
 Telex: 412291
 There is also the possibility of participating in the Thessaloniki
 International Show, where the American-Hellenic Chamber of Commerce has its
 own pavilion.  The show is held every year, is horizontal, and attracts over
 a million visitors from all over the Greece.  The next show will be held
 from September 7 to 16, 1991.  Participating in this show could offer good
 publicity, provided the U.S. firm has already reached a working relationship
 with an agent.  However, participating in this show without an agent is not
 recommended.  The address of the American-Hellenic Chamber of Commerce is
 the following:
 American-Hellenic Chamber of Commerce
 16 Kanari Street
 GR-106 74 Athens
 Phone: 01130/1/3636407 or 3618385
 FAX: 011/30/1/3610170
 Telex: 223063
 Another method of promotion is through various trade magazines.  Following
 is a listing of the major publications in Greece:
 Plefsi Magazine
 Cambas Publications
 38 Dimocratias street
 GR-154 51 Neo Psihiko (Athens)
 Phone: 01130/1/6479421
 Fax: 01130/1/6712685
 Sea and Yachting
 Naftikes Ekdosis EPE
 22 Akti Themistokleous Street
 GR-185 36 Piraeus
 Phone: 01130/1/4529571
 Fax: 01130/1/4137805
 66 Posidonos Avenue
 GR-174 55 Alimos (Athens)
 Phone: 01130/1/9837877 & 9840766
 Fax: 01130/1/9812822
 Hellenic Marine Guide
 Samouhos Bros Publications
 330 Syngrou Avenue
 GR-176 73 Kalithea (Athens)
 Phone: 01130/1/9594567
 Fax: 01130/1214276

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