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SOURCE: USDOC, International Trade Administration SOURCE KEY: IT PROGRAM KEY: IT MARKET PROGRAM: Market Research Reports UPDATE: Monthly ID NUMBER: IT MARKET 111101683 TITLE: SPAIN - YACHT MARKET PROFILE - IMI930309 DATA TYPE: TEXT END YEAR: 1993 UPDATED: 03/16/93 KEYWORDS 1: | 9303 | CC469 | IMI | IMI9303 | PLB | PLEASURE BOATS AND ACCESSORIES | SPAIN COUNTRY: | SPAIN | EC | EEC | EUROPE | EUROPEAN COMM. | EUROPEAN COMMUNITY | EUROPEAN ECONOMIC COMMUNITY | OECD | ORGANIZATION FOR ECONOMIC COOPERATION & DEVELOPMENT | ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMET | WEST EUROPE | WESTERN EUROPE | WESTERN EUROPEAN COUNTRIES TEXT SPAIN - YACHT MARKET PROFILE - IMI930309 SUMMARY This article is derived from a telegraphic report dated 9 March 1993, prepared at the American Embassy - Madrid. It discusses the Spanish market for yachts. The article consists of 2 pages. 05 MAR 93 AMEMBASSY MADRID SUBJECT: RECREATIONAL BOAT MARKET IN SPAIN: INTERNATIONAL MARKET INSIGHT. SUMMARY: IMPROVED STANDARDS OF LIVING AND A SEAFARING TRADITION HAVE MADE SPANIARDS DEMAND RECREATIONAL BOATS. THE RECREATIONAL BOAT MARKET IS WELL ABOVE US$ 230 MILLION AND IT IS FORECASTED THAT IT WILL GROW AT AN ANNUAL RATE OF 7 PERCENT THROUGH 1996. A SLOWDOWN IN MARINA CONSTRUCTION IS AFFECTING QUITE HEAVILY SALES IN THIS MARKET. U.S. MANUFACTURED SPORTS AND PLEASURE BOATS ARE HIGHLY REGARDED AND MAKE UP 30 PERCENT OF TOTAL IMPORTS. YET, U.S. MANUFACTURERS HAVE TO INVEST MORE IN THE DISTRIBUTION OF THEIR PRODUCTS IN SPAIN IF THEY WANT TO GAIN LARGER MARKET SHARE. END SUMMARY. 2. AS A SEAFARING NATION, SHIP BUILDING 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. BUT 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. 3. THIS REPORT CONSIDERS THAT THE SPORTS AND RECREATIONAL BOAT MARKET IN SPAIN IS MADE UP OF THE FOLLOWING PRODUCTS: SPORTS AND RECREATIONAL BOATS AS SUCH (MADE UP OF YACHTS, SAILING AND MOTOR BOATS, ZODIAC TYPE VESSELS, CANOES, ROW BOATS, ETC.); ENGINES FOR VESSELS; AND ARTICLES FOR THE PRACTICE OF WATER SPORTS (WATER SKIS AND SURFBOARDS OF ALL KINDS). 4. SPAIN HAS ALMOST 5,000 KILOMETERS OF COAST LINE, AND BOTH 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. 5. 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. 6. THE RECREATIONAL BOAT MARKET IN SPAIN WAS ESTIMATED TO BE OVER US$ 231 MILLION IN 1992. GROWTH FORECASTS THROUGH 1996 ARE AROUND 7 PERCENT EVERY YEAR. 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. 7. 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. 8. THERE IS ALSO AN IMPORTANT PRESENCE OF U.S. ENGINES. OVER 24 PERCENT OF TOTAL SPARK IGNITION OR ROTARY INTERNAL ENGINES IMPQRTED INTO SPAIN CAME FROM THE UNITED STATES. WITH REGARDS TO COMPRESSION IGNITION ENGINEQ, 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. 9. 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 TIMES, 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 THAT ADVERTISE HOW TO BUY A BOAT IN THE UNITED STATES. 10. 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 A MORE SOLID PRESENCE IN SPAIN, EITHER DIRECTLY 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. (FCS MADRID/JRCARBAJOSA/EIODICE)## GREENLEE
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