SOURCE: USDOC, International Trade Administration SOURCE KEY: IT PROGRAM KEY: IT MARKET PROGRAM: Market Research Reports UPDATE: Monthly ID NUMBER: IT MARKET 111106458 TITLE: SWEDEN - PLEASURE BOATS - ISA9203 DATA TYPE: TEXT END YEAR: 1992 UPDATED: 09/17/92 KEYWORDS 1: | 9203 | BEST|PROSPECTS | CANOES | CC401 | COMPETITION | DISTRIBUTION | END|USERS | ISA | ISA9203 | MARKET|ACCESS | MARKET|ASSESSMENT | PLEASURE|BOATS | SPORTING AND RECREATION GOODS | SPT | STATISTICS | SURF|BOARDS | SWEDEN | TRADE|CONTACTS | TRADE|PROMOTION COUNTRY: | SWEDEN | EFTA | EUROPE | EUROPEAN FREE TRADE ASSOCIATION | OECD | ORGANIZATION FOR ECONOMIC COOPERATION & DEVELOPMENT | ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMET | SCANDINAVIA | SCANDINAVIAN COUNTRIES | WEST EUROPE | WESTERN EUROPE | WESTERN EUROPEAN COUNTRIES TEXT SWEDEN - PLEASURE BOATS - ISA9203 SUMMARY: This article is derived from a report titled: "The Pleasure Boats Market in Sweden", dated March 1992, prepared by N. Hoegstrom, American Embassy - Stockholm. This article consists of 6 pages and contains the following subtopics: OVERVIEW STATISTICAL DATA MARKET ASSESSMENT BEST SALES PROSPECTS COMPETITIVE SITUATION MARKET ACCESS TRADE PROMOTION OPPORTUNITIES A. OVERVIEW Since mid-1989, when the market was strongest, prices for pleasure boats have fallen drastically. Customers in these times of recession are leery of investing in a new boat. Imports have declined significantly, virtually halved from 1990 to 1991. The domestic boating industry has weathered the recent recession fairly well but is today living on foreign markets. Domestic demand will remain low this year. Exports should be stagnant or up slightly as the boat/builders continue to develop the foreign markets. B. STATISTICAL DATA $Million 1990 1991E 1992E Gain/Loss Import Market 112 58 58 0 Local Production 186 157 157 0 Exports 95 97 97 0 Total Market 203 118 118 0 Imports from U.S. 22 12 12 0 Exch. Rates $1.00 5.90 6.05 6.05 Future Inflation Rate Assumed: 3 percent in 1992. 1990 Import Market Share: 20 percent United States, 21 percent Norway, 18 percent Finland, 15 percent United Kingdom, 8 percent Denmark, 18 percent others. Receptivity Score: 3 Statistical data for 1991 are available only up to September 1991 but we feel that it is possible to make an accurate estimate for all of 1991. Marine accessories are not included in the data. C. MARKET ASSESSMENT There are more than 1.3 million leisure boats in this country of eight million people. It is estimated that 25 percent of the population are active boating enthusiasts. The conditions for boating are also excellent. Sweden has a long coastline and many inland lakes. A negative factor is that the boating season is very short. There are some 200,000 live-aboard cabin boats and sailing boats and about 175,000 daycruisers. In addition, there are 500,000 open boats with engine under 10 hp and also 275,000 open boats without engine. The number of canoes and sail boards is estimated at 150,000. Apparent consumption declined by 40 percent between 1990 and 1991. The decline in demand for pleasure boats has been caused mainly by the general economic downturn but also by new tax rules which have limited deductions for interest on purchases. The downturn has fallen on imported boats whereas the domestic boat manufacturing industry has gotten off lightly thanks to successes on foreign markets. The total market amounted to Skr 1200 ($203) million in 1990. Production value of boats was Skr 1100 ($186) million and exports amounted to Skr 560 ($95) million. Imports of pleasure boats had fallen in 1990 to Skr 660 ($112) from Skr 780 ($130) the year before. During the year 1990, a total of 22,000 pleasure boats were sold in Sweden. Of these, only 1000 were sail boats. Some 17,000 boats were sold in 1991, of which 700 sail boats. Unfortunately, the brunt of the decline has been borne by American boat suppliers. More than 50 percent of the pleasure boats built in Sweden were exported in 1990. The largest foreign markets for Swedish boats were Germany, Japan, United Kingdom, the Netherlands and the neighboring Nordic countries. The general trend this year appears to be towards smaller, less luxurious boats, type "cabin model". Sailing boats are also of more manageable sizes, often 24-foot. There is also an increased interest in "vintage" boats. Sales of marine accessories and engines have been less affected by the downturn in the economy. There has been a rapid growth of the market for navigational instruments and safety products. In the past few years, safety has become an important issue in the boating industry. There is no mandatory testing but the National Swedish Administration of Shipping and Navigation has introduced voluntary type approval of pleasure boats. Close to 300,000 owners of larger boats are subject to a modest tax (Skr 30 per year or $5), which is collected in order to pay for a registration. The Swedish Government ruminates upon the consequences of scrapping the register, but the Swedish Police would like to keep it. Obviously it facilitates search for stolen boats. The Swedish boat industry employs some 6,000 people including manufacturers, dealers and service personnel. D. BEST SALES PROSPECTS Although the trend is towards smaller boats, there is still a market for the traditional types supplied by American boat builders. Demand is expected to increase for canoes and surf boards. Although the dollar has moved up modestly in recent months, the consistently low value has created export opportunities for U.S. suppliers. A segment of the industry that did see positive growth was marine accessories. It should remain relatively strong as many boat-owners prefer to up-grade their boats rather than buying new boats. E. COMPETITIVE SITUATION Although apparent consumption has declined significantly, the Swedish boat building industry has done well thanks to increased sales in foreign markets. The industry had a trade surplus in 1991. It is estimated that on average, foreign markets account for more than 50 percent of the industry's output. Japan has become the second largest market for Swedish pleasure boats after Germany. The industry has also been making inroads into new markets in South East Asia and southern Europe (Italy and Spain), which are regarded as good prospects for long-term growth. It should be noted that the Swedish industry has increased its market share of the domestic market from 45% in 1990 to 50% last year. There are 10-12 large or mid-sized domestic boat builders. The largest firm is Nimbus AB with annual sales of $40 million. After a modest beginning in 1977, the Nimbus Group has grown to become one of Europe's largest boatbuilders. It presently manufactures 12 different models of motorboats and as of this year, the famous Maxi Yachts has become a wholly-owned subsidiary. Maxi manufactures four sailboat models. Nimbus Boats has a market share of 20 percent and Maxi Yachts 6 percent. The second-largest domestic boatbuilder is Utternbatar AB with 9 percent market share. Third-largest is Storebro Royal Cruiser AB, which primarily markets luxury boats for wealthy consumers. Obviously this is a sector that is not price sensitive. Another well-known boat-builder is Hallberg Rassy, luxury sail boat builder, which claims to have an export share of over 90%. A breakdown by company gives the the following market shares (of the Swedish market) for the leading boat building firms: Nimbus Boats 20 percent Maxi Yachts (Nimbus) 6 percent Uttern 9 percent Storebro 5 percent Hallberg-Rassy 3 percent Najad 1 percent Other domestic firms 6 percent Sales of U.S.-produced pleasure boats came to a virtual standstill in the early 80s when the exchange rate was extremely unfavorable. A turnaround came in 1987 when the dollar fell, and sales peaked in 1989 with a total volume of $35 million. The decline in the economy has greatly affected sales of pleasure boats and the sales figures for 1990 and 1991 have been disappointing. The year 1992 will probably turn out to be another weak year with at best stagnant sales. The leading U.S. boat suppliers are Bayliner and Sea Ray. Norway slipped ahead of the U.S. as boat supplier to Sweden with sales in 1990 of $23 million versus $22 million for the U.S. The leading Norwegian boat builder is Saga Boats, which have retained their popularity over the years. Barracuda and Draco are other successful Norwegian boats. At a time of continuing depressed demand, sales of Norwegian boats have remained relatively stable. Finland ranked third as a supplier to Sweden, exporting boats for $20 million in 1990, and United Kingdom ranked fourth with exports of $17 million. F. MARKET ACCESS Pleasure boats are classified under tariff number 89.03 of the Harmonized Schedule. Customs duties are low, only 3.8 percent. Canoes and rowing boats are duty free. There is a value-added-tax of 25 percent. U.S. firms normally operate through a local agent. A number of potential agents as well as other key contacts are listed in the Appendix. A point of contact that should not be overlooked is Sweboat, the Swedish boating industries association, which will help with general information about the market. The purchase of a pleasure boat is almost invariably financed on credit. Banks and finance houses have become very careful in granting large credits, which has adversely affected sales. A number of firms and publications are listed in the Appendix. Although we believe these to be reputable, the Foreign Commercial Service (FCS) cannot, of course, assume responsibility for any business relations that U.S. suppliers may have with them and FCS neither recommends nor endorses any of the firms or publications. However, we believe that a list of this type can be helpful for U.S. firms attempting to find customers or other contacts in this region. G. TRADE PROMOTION OPPORTUNITIES There is a number of magazines available to boating enthusiasts (see Appendix). Trade shows are very important as 50 percent of total boat sales are said to be consummated during trade shows. A Marine Trades Exhibition is held each February/March at the Stockholm International Fairs as well as one in January at the Swedish Exhibition & Congress Center in Goteborg. The events attract large numbers of both exhibitors and visitors. In addition, a Floating Boat Exhibition is held each year in early September in Stockholm and in late September in Goteborg. Stockholm International Fairs S-125 80 Stockholm Tel. Int/46/8-749 4100, fax 8-992044 The Swedish Exhibition & Congress Center P.O. Box 5222 S-402 24 Goteborg Tel. Int/46/31-109100, fax 31-160330 APPENDIX Page 1 KEY CONTACTS ASSOCIATIONS AND GOVERNMENT AGENCIES National Administration of Shipping and Navigation (Sjoefartsverket) S-601 78 Norrkoping Tel. Int/46/11-19 1000, fax 11-101949 SWEBOAT (Batbranschens Riksforbund) Ljusstoparbacken 20 S-117 65 Stockholm Tel. Int/46/8-744 0220, fax 8-744 1829 Contact: Mr. Bjorn Lagerkvist PUBLICATIONS Batagare (transl. "Boat-owner"), Frejgatan 18, S-113 49 Stockholm Tel. Int/46/8-150930, fax 8-612 0426 Batnytt (transl. "Boating News"), Box 70452, S-107 26 Stockholm Tel. Int/46/8-736 3700, fax 8-654 4477 Batliv (transl. "Boat life"), Box 8097, S-371 08 Lyckeby Tel. Int/46/455-29780, fax 455-20809 POTENTIAL AGENTS (Boats) Duvnasbatar AB, Saltsjobadsvagen 77, S-131 50 Saltsjo-Duvnas Tel. Int/46/8-716 2660 (Represents Bayliner) Skanstull Marin AB, Box 93, S-121 22 Johanneshov Tel. Int/46/8-722 8955, fax 8-912018 Venator Marketing AB, Ragvagen 7, S-182 75 Stocksund Tel. Int/46/8-85 1210, fax 8-856599 Owe Forslund Marine AB, Box 112, S-161 26 Bromma Tel. Int/46/8-730 4233 Caprice Marin AB, Helleflundregatan 12, S-421 58 Vastra Frolunda Tel. Int/46/31-29 2060, fax 31-690388 Jarleruds Bil & Marin AB, box 65, S-130 54 Dalaroe Tel. Int/46/750-50105, fax 750-51701 N K Kristensson AB, Box 50, S-163 91 Spanga Tel. Int/46/8-621 4100, fax 8-360052 Appendix Page 2 POTENTIAL AGENTS (Marine Accessories) Axhede & Hansson AB, Nya Varvet B 31, S-421 71 Vastra Frolunda Tel. Int/46/31-291111, fax 31-292789 Boatnav AB, Box 1582, S-221 01 Lund Tel. Int/46/46-304060, fax 46-305605 KG Knutsson Handels AB, Lastbilsvagen 8, S-191 81 Sollentuna Tel. Int/46/8-923000, fax 8-923307 Herman Gotthardt AB, box 505, S-232 24 Arlov Tel. Int/46/40-430520, fax 40-430769 Sportmanship Marin AB, box 53, S-427 22 Billdal Tel. Int/46/31-913050, fax 31-913231 Thermoprodukter AB, box 715, S-391 27 Kalmar Tel. Int/46/480-15080, fax 480-12775 Marine Power Sweden AB, Box 61, S-163 91 Spanga Tel. Int/46/8-621 8500, fax 8-621 1580 DOMESTIC BOATBUILDERS Najadvarvet AB, Angsvagen 8, S-440 90 Henan Tel. Int/46/304-31070, fax 304-31179 Nimbus Boats AB, Box 5152, S-421 05 Vastra Frolunda Tel. Int/46/31-299310, fax 31-294698 Hallberg-Rassy AB, Hallavagen 6, S-502 90 Ellos Tel. Int/46/304-50290, fax 304-51331 Storebro Royal Cruiser AB, S-590 83 Storebro Tel. Int/46/492-30160, fax 492-30300 Ryds Batindustri AB, Box 60, S-360 10 Ryd Tel. Int/46/459-80510, fax 459-80878 Utternbatar AB, Norrlangtrask, S-934 00 Kage Tel. Int/46/910-94027, fax 910-94044 Note: List is partial. No discrimination is intended and no guarantee of reliability implied.
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