USDOC, International Trade Administration

 SOURCE:       USDOC, International Trade Administration
 PROGRAM:     Market Research Reports
 UPDATE:      Monthly
 ID NUMBER:   IT MARKET 111101013
 END YEAR:    1993
 UPDATED:     05/14/93
 | 9302
 | CC469
 | ISA
 | ISA9302
 | PLB
 | EC
 | EEC
 This article is derived from a report titled: "The Sports amd Recreational
 Boat Market in Spain, dated February 1993, prepared by J.R. Carbajosa,
 American Embassy - Madrid.  This article consists of 11 pages and contains
 the following subtopics:
 As a seafaring nation, shipbuilding in Spain has traditionally been a very
 important economic activity.  It enjoys some excellent naval engineering
 schools.  Spain has the third largest fishing fleet in the world and used to
 boast one of the largest merchant fleets.  There is a much less strong
 tradition of pleasure boat ownership.  Up to a short while ago, people
 believed that only millionaires could enjoy marine sports such as sailing
 and boating.  At present, more Spaniards have the means to practice all
 sorts of water sports.
 This report considers that the sports and recreational boat market in Spain
 is made up of the following products: sports boats, yachts, sailing and
 motor boats, zodiac type vessels, canoes, row boats, and other recreational
 boats; engines for vessels; and articles for the practice of water sports
 (water skis and surfboards of all kinds).
 Imports account for almost 66 percent of the total market.  The United
 States is the second largest foreign supplier after the European Community.
 The domestic market is small but competitive, as they are exporting quite
 well to the rest of Europe.
 Infrastructure investment is vital for this market.  There are only 80,000
 mooring spaces available for 125,000 registered vessels.  Construction of
 new marinas lags behind demand.  According to industry sources, the lack of
 new mooring space  is limiting boat sales by as much 25 percent.
 Spain has almost 5,000 kilometers of coast line, as well as a seafaring
 tradition plus a favorable climate in which to practice water sports.
 Improved standards of living augur well for an expanding sports and
 recreational boat market in coming years.
                          US DOLS MILLIONS         PERCENT GAIN/LOSS
                                                   Est. Avg. Annual Real
                     1990      1991      1992*     Growth - Next 3yrs
 Import Mkt.         157.1          153.1          151.0             2%
 Local Prod.          98.2          106.2          117.6            10%
 Exports              32.3           34.9           37.5            12%
 Total Mkt.          223.2          224.4          231.1             7%
 Imp. from US         44.1           46.2           47.0             7%
 Exch. Rates         101.8          103.5          102.0
 Future Inflation Rate Assumed: 5.5%
 Last Year's Import Market Share*
 USA: 30.2%          EC: 51.6%      Japan: 8.6%
 Receptivity Score (1-5): 4 = receptive (The scale goes from 1 = not
 receptive to maximum of 5 = extremely receptive.)
 U.S. sports and recreational vessels are considered as a good quality
 product at a very competitive price.  Nonetheless, U.S. manufacturers should
 consider local representation to distribute their vessels.  A large portion
 of U.S. vessels have been imported directly by the end-user after a trip
 made to the United States.
 Sources: Customs Agency Statistics, Fira de Barcelona Research Study on
 Nautical Sector in Spain, ADIN research department.
 **Note: data for 1992 is based on industry estimates.
 Demand for sports and recreational boats is still rising despite the
 economic slowdown.  Annual growth estimates through 1996 are around 7
 percent; still lower than in recent years.  Spain has experienced a very
 fast growth rate in the last 30 years for this type of vessels.  In 1965,
 there were only 700 sports and recreational vessels registered in Spain.
 Ten years later, the number of units had increased by 2000 percent to 45,000
 vessels.  The latest figures available (1991) indicate Spain had 125,000
 registered pleasure boats.
 Spain enjoys 4,964 kilometers of coastline and fair weather to practice
 sailing all year round.  At present there are 313 marinas with a total
 capacity for 80,000 moorings.  The Mediterranean shoreline and the Balearic
 Islands have 53 percent of these marinas, which enjoy 84 percent of Spain's
 total mooring capacity.
 There are two types of marinas clearly differentiated in Spain.  Those
 streamlined or designed for tourism purposes and those serving the local
 population.  Marinas in the Balearic Islands and in the southern part of
 Spain target the tourist industry.  Their mooring capacity is full during
 the vacation season, and there is a 7:3 ratio between foreign vessels and
 domestic ones.
 Marinas in Catalonia and Valencia on the Mediterranean, as well as those
 established in the northern Atlantic coastline, are mainly serving clients.
 They are usually located close to large urban areas.  The vessels moored in
 these marinas range from 8 to 10 meters in length; with a few units ranging
 from 10 to 12 meters in length.  Most of the powered vessels in Spain range
 from 6 to 8 meters in length.
 The market needs more mooring capacity.  Infrastructure investment is
 vital.  There are only 80,000 mooring spaces available to accommodate
 125,000 registered vessels.  Construction of new marinas lags well behind
 demand.  According to industry sources, the lack of new mooring space is
 reducing boat sales by up to 25 percent every year.
 This market is also burdened by the high taxes which affect every vessel
 whose length exceeds 7.5 meters.  Beyond this length, ships pay an
 additional registration/luxury tax that amounts to 13 percent of the
 vessel's value.  Normal V.A.T. is 15 percent for all products and services
 marketed in Spain and must be paid by the end-user directly.  The
 registration/luxury tax can be paid by the middleman, but the tax will be
 reflected in a higher price to the end-user.
 The current economic slowdown is affecting this market in the same manner as
 in other sectors.  Consumers are more wary about spending their money on
 non-essential goods.  Nonetheless, end-users in this market are in high
 income brackets, and they are usually less affected by economic recessions.
 End User profile
 Spain's demographics have changed significantly over the last 30 years; its
 "baby boom" generation is only now entering its high earning and high
 consumption years.  Moreover, Spaniards have further to go in catching up to
 the living standards of its EC neighbors.  While per capita income (in U.S.
 current dollar terms) has risen sixty percent over the last five years,
 local living standards are still only three-quarters of the European
 average.  Spain's relatively large market, including almost 40 million
 residents and over 50 million visitors per year makes this market very
 People interested in a sport and recreational boat must have the appropriate
 license.  In 1991, there were 20,000 new licenses given, with 17,835
 renewals.  In the first three quarters of 1992, there were 11,669 new
 permits issued.  In order to get a license, one must attend intensive
 training and pass a strict exam.  This is another factor that limits sales.
 Highest demand for these kind of vessels is found in Catalonia, Valencia,
 the Balearic Islands in the Mediterranean, and in Cantabria and the Basque
 Country along the northern Atlantic coast line.  Madrid is becoming an
 interesting market as many of its residents buy small boats to use in some
 of the reservoirs that surround the capital.
 - Sports and pleasure boats: motorboats and sail boats with ship length
   below 7.5 meters  (HC8903)
 - Spark ignition reciprocating or rotary internal combustion piston engines
 1.  Domestic Production
 Domestic production of sports and recreational boats is quite important in
 Spain.  Yet, it has not been able to satisfy total demand.  Stiff import
 competition has aroused this subsector from its sleepy posture in the late
 1970's.  New manufacturing companies have sprung up and are beginning to
 compete fiercely with foreign suppliers.  Spanish manufacturers have the
 know-how to manufacture top-level products.
 Over the last two years, domestic production has grown while imports have
 actually decreased.  Also, Spanish manufacturers have increased their
 exports by as much as 10 percent at a time when the local currency was at
 its strongest level.  This trend is forecast to continue due to the Fall
 1992 peseta devaluations of about ten percent, which have automatically made
 Spanish products relatively cheaper and imported goods more expensive.
 Domestic sports and recreational boat manufacturing is strongest in yachts
 and motorboats with ship length between 7 and 9 meters.  The manufacture of
 engines (compression piston engines) is the second most important good
 manufactured domestically in this subsector.
 Despite the fact that domestic manufacturing has grown considerably, the
 subsector is concerned about the high interest rates that exist in Spain,
 which makes financing new ventures very expensive.  This market requires
 continued technological innovation in order to keep up with competition.
 2. Imports
 Imports make up over 65 percent of the total market.  The main suppliers to
 this market are the European Community member countries with over 51 percent
 import market share.  Products for the domestic sports and recreational
 vessels market coming from the United States make up 30 percent of total
 imports, while Japanese goods follow at a distance with just over 8 percent.
 By major product line, the EC totally dominates the domestic market for
 yachts and small boats that fall under the Harmonized Code 8903 with 54.28
 percent import market share.  Spaniards also buy most of the engines that
 fall under heading 8408 from the EC, mainly Germany, amounting to 55.15
 percent of imports.  Japanese engines under heading HC 8407 make up almost
 40 percent of imports followed by those from the EC, mainly Belgium, with
 32.7 percent.  Most of the marine complements and accessories that are in
 heading HC 9506 come from the EC as well, 61.6 percent of imports.
 3. U.S. Market Position and Share
 U.S. products account for 30 percent of total imports.  Over the last three
 years there has been a large increase in the demand for U.S. pleasure
 boats.  A strong local currency, and a competitive price/quality ratio on
 behalf of U.S. products have allowed American pleasure boats to almost
 dominate this segment of the market.  Sport and pleasure boat imports from
 the United States make up 38.24 percent of total imports of heading HC 8903.
 There is also an important presence of U.S. engines.  Over 24 percent of
 total spark ignition or rotary internal engines imported into Spain came
 from the United States.  With regards to compression ignition engines, close
 to 17 percent of imports were manufactured in America.  As to other articles
 and complements, U.S. products made up 10.3 percent of imports.
 Many of the U.S. manufactured sports and pleasure boats have been privately
 imported by the end-user after a tourist visit to Florida.  A strong peseta
 versus the U.S. dollar made it possible to import boats at a less expensive
 cost than acquiring it locally.  Most of the time, boats were purchased from
 a U.S. distributor, instead of directly from the manufacturer.  Until last
 year, certification requirements were not enforced, so the only hurdle was
 to pay the corresponding customs duty and transport the boat to Spain.  Even
 today, there are advertisements in trade publications about how to buy a
 boat in the United States.
 There is demand for good quality U.S. products at competitive prices, but
 U.S. products in general lack solid distribution channels in Spain.  There
 is little U.S. manufacturer presence in Spain.  Manufacturers have to
 establish solid presence in Spain, either through representation or through
 joint-ventures with local manufacturing companies.  Many domestic companies
 would welcome an American firm as a partner targeting the EC Single Market
 and bringing in technological know-how.
 4.  Competitive factors
 Price is by far the most important factor.  With similar navigational
 capabilities, price is the determining factor in this market.  This is
 especially true for sail boats and other recreational vessels.  With regard
 to engines, apart from price, after-sale maintenance service is very
 important.  Quick repair service and available parts are necessary to
 compete successfully.
 A good distribution network is becoming more and more an essential
 competitive factor.  Manufacturers from the EC have been investing a lot of
 money on improving their distribution network in this market.
 1.  Import climate
 There are both custom tariffs and product approval certification impediments
 that limit the free marketing of sports and recreational vessels in Spain.
 Also, they are heavily taxed by the Administration.  End-users have to pay a
 general value added tax amounting to 15 percent, and for larger boats, over
 7.5 meter length, there is an extra 13 percent registration/luxury tax.
 Industry sources complain that these impediments are affecting the sector's
 growth very seriously.
 Under the Single Market regulations, custom tariffs for the products covered
 in this study are the same for all the EC.  This means that boats coming
 from other member countries are not levied any tariffs, and only boats
 manufactured outside of the EC have to pay these common customs tariffs.
 Customs tariffs are as follows:
   Spark ignition reciprocating or rotary internal combustion piston engines:
   between 6.9% and 10%
   Compression ignition internal combustion piston engines (diesel or
   semi-diesel engines): either 0% or 5.3 %
   Yachts and other vessels for pleasure or sports; row boats and canoes:
   either 2.5% or 3.8%
   Water skis, surf boards, sailboards and other water sport equipment: 6
 2.  Certification Requirements
 Pleasure boats in Spain, whether manufactured locally or imported must meet
 strict certification requirements.  These requirements are called locally
 "homologation".  Pleasure boats must present extensive documentation to the
 Inspection Department of the Merchant Navy General Directorate in order to
 be "homologated".  Once all the necessary documents have been reviewed by
 this department, and the boat has passed a navigation test supervised by the
 inspectors, the boat can be marketed in Spain.  The process takes at least
 one month.
 The following do not need certification or "homologation" requirements to be
 sold in Spain:
 - Row boats, canoes, kayaks or similar (including surfboards)
 - Water motorbikes
 - Motored and sailing ships with an LBD factor below 2
 - Pneumatic motor boats, length less than 2.7 meters
 - Pneumatic sailing boats, length less than 3.7 meters
 The legislation that implements these requirements is spread among several
 laws and regulations.  This has made enforcement of certification
 requirements difficult.  Many boats imported in the past got away with
 minimum requirements. The General Directorate of the Merchant Navy published
 a Ministry Notice in March 1992 (Circular No. 3/92) pointing all the steps
 necessary to certify pleasure boats in Spain.  Strict implementation began
 in June of last year.
 The US&FCS in Spain managed to work with local authorities to obtain
 recognition for U.S. manufactured pleasure boats that hold certification
 from the National Marine Manufacturers Association (NMMA).  This applies to
 pleasure boats with total length below 15 meters.  The Inspection Department
 of the General Directorate of the Merchant Navy accepts the NMMA documents
 to substitute those required by the 3/92 regulations for this kind of
 boats.  Nonetheless, there must be a unit present in Spain for the
 navigation tests.
 3.  Distribution/business practices
 Distribution patterns in this subsector change depending on the products
 marketed.  Recreational boats as such, that is sailing boats from Optimist
 class onwards, cruising sailing boats, yachts, motorboats and pneumatic
 boats (zodiac type) are distributed mainly through distributors and
 represent 75 percent of units sold annually.  The remaining percentage of
 boats sold annually are marketed directly from domestic manufacturer to
 end-user (20 percent) and from foreign manufacturer to consumer (5 percent
 of units).  The majority of boat distributors, 80 percent of units sold
 every year, buy from manufacturers and re-sell to final user.  Remaining 20
 percent of boats are left on consignment by the manufacturer for the
 distributor to sell.
 The 20 percent of boats sold by domestic manufacturers to end-users are
 usually small regatta sailing boats, 420, 470, Europa, etc., and for large
 boats over 15 meters of length.  These large boats are built directly by
 shipyards, and the end-user typically makes the order himself.
 The other products reported in this study are not sold directly to
 end-users.  The distribution chain is respected.  Usually these products are
 sold by distributors to specialty retail stores.
 4.  Financing
 The general rule in this market is the 90 day payment turnover.  Regarding
 boats, the common practice is that payments are delayed if the distributor
 has not sold the boat.
 Distributors have their own financing or have special agreements with banks
 to finance boats over US$10,000.  In theory boats can be mortgaged like a
 house, but in practice no bank accepts this risk any more.
 Large recreational boats, on the contrary, are financed by the end-user.
 The customer contracting with a shipyard to build its boat must make payment
 advances.  (This refers to boats that cost over US$1 million.)
 5.  Key contacts
 A full list of government and private contacts in the recreational boat
 market can be found in Appendix 1.  This list contains the addresses of the
 Government agency in charge of certification requirements, of useful trade
 associations that can provide information about this market, major
 importers, and related specialized publications.
 There is a large trade fair on recreational boats and complementary products
 held annually in the last week of November in Barcelona.  This is organized
 by the city's trade fair Authority and by the domestic Association of
 Maritime Industries (ADIN).
 The trade fair's address is the following:
 Fira de Barcelona
 Salon Nautico Internacional
 Avda. Reina Maria Cristina s/n
 E-08004 Barcelona, Spain
 tel: (34-3)423-3101
 fax: (34-3)423-8651
 The U.S. Department of Commerce and the U.S. and Foreign Commercial Service
 in Spain offers the Gold Key Service, a custom tailored, appointment-setting
 program to introduce a company's products in Spain.  This service has
 allowed many firms to identify and establish commercial relations with
 qualified local companies.  For further information please contact:
    Commercial Attache
    US&FCS Madrid
    PSC # 61, Box 21
    APO AE 09642
    tel: (34-1)577-4000
    fax: (34-1)575-8655
 Ministerio de Obras Publicas y Transportes
 Direccion General de la Marina Mercante
 Inspeccion General de Buques
 Contact: Mr. Antonio Calvo Anton, General Inspector
 E-28014 Madrid, Spain
 tel: (34-1) 580-1400/580-1450
 fax: (34-1) 523-4120
 Trade Associations
 Asociacion de Industrias Nauticas (ADIN)
 Contact: Mr. Miguel Company Martorell
 L'Escar 5,
 E-08039 Barcelona, Spain
 tel: (34-3) 310-7948
 fax: (34-3) 315-4259
 Contact: Mr. Rodrigo Andrade
 Puerto Deportivo de Vigo
 Apdo. Correos 249
 E-36200 Vigo, Spain
 tel: (34-86) 431-402
 fax: (34-86) 434-472
 Contact: Mr. Pedro Mirete
 Avda. Artero Guirao 19
 E-30740 San Pedro del Pinatar (Murcia), Spain
 tel: (34-68) 182-050
 fax: (34-68) 184-018
 HARRY WALKER (Div. Nautica)
 Contact: Mr. D.P. Garcia
 Aragon 105
 E-08015 Barcelona, Spain
 tel: (34-3) 226-3812
 fax: (34-3) 226-3812
 Contact: Ms. Catherine
 Puerto de Rosas
 E-17487 Ampuriabrava (Girona), Spain
 tel: (34-72) 452-354
 fax: (34-72) 452-354
 Contact: Mr. Chris Collman
 Muelle de Levante
 E-07701 Mahon (Menorca), Spain
 tel: (34-71) 366-144
 fax: (34-71) 366-144
 Contact: Mr. Eduardo Falcon
 Juan Rejon 67
 E-35008 Las Palmas (Canarias), Spain
 tel: (34-28) 246-288
 fax: (34-28) 249-526
 Contact: Antonio Macias
 Mendez Nunez 106
 E-38001 Santa Cruz de Tenerife, Spain
 tel: (34-22) 270-962
 fax: (34-22) 270-966
 MARINA 2001
 Contact: Mr. Abelardo Garcia Linares
 Avda. Moscatelar 5
 Poligono La Hoya
 E-28700 San Sebastian de los Reyes (Madrid), Spain
 tel: (34-1) 654-4256
 fax: (34-1) 654-4256
 Contact: Mr. Jose Donatiu
 Autovia Castelldefels 104
 E-08860 Castelldefels (Barcelona), Spain
 tel: (34-3) 636-0310
 fax: (34-3) 664-5155
 Contact: Mr. Enrique Maso
 Autovia Castelldefels Km. 9
 Apdo. de Correos 53
 E-08830 Sant Boi de Llobregat (Barcelona), Spain
 tel: (34-3) 630-5533
 fax: (34-3) 630-5533
 Contact: Mr. Salvador Santiago
 Pintores 2, bajo izda
 E-28037 Madrid, Spain
 tel: (34-1) 306-7858
 fax: (34-1) 306-4906
 Contact: Mr. Miguel Soldevilla
 Sartena Auzoa 48F
 E-48940 Leioa (Vizcaya), Spain
 tel: (34-4) 423-0806
 fax: (34-4) 424-7334
 Contact: Mr. Robin Tupper
 Puerto Pesquero
 E-29600 Marbella (Malaga), Spain
 tel: (34-52) 777-098
 fax: (34-52) 822-737
 Contact: Mr. Brian Livingston
 Paseo Saralegui 50
 E-07470 Puerto de Pollensa (Mallorca), Spain
 tel: (34-71) 530-426
 fax: (34-71) 530-426

Return to Recreational Boat Building Industry Home Page