January 9, 2009 / 9:40 PM / 10 years ago

British boat industry buoyed by exchange rate

LONDON (Reuters Life!) - Britain’s boat manufacturers attending this year’s London International Boat Show were in buoyant mood, forecasting that a weaker pound would help them stave off tough competition from abroad.

Luxury cruisers are moored outside the London International Boat Show January 9, 2009 REUTERS/ Eddie Keogh

“London has always been an international show — we have always had a lot of international visitors, but the vast majority of sales have been from people from the UK,” the National Boat Show’s Managing Director Andrew Williams said.

“But now what we’ve got clearly with the way the euro is all of a sudden Europe will want to come here and do their shopping for boats because it is a lot, lot cheaper than it is buying in Europe at the moment.”

The boat show, the world’s oldest, expects 130,000 visitors to pass through the doors at the ExCeL exhibition center in east London during the next week, a small rise on last year.

International sales tickets, mainly from Europe, are up about 10 percent.

“I think that (the euro) is the silver lining on the economic cloud at the moment,” Williams added.

Derek Carter, chief executive at Fairline Boats, based in Oundle, Northamptonshire, said the exchange rate was a “positive development in the world of (British) boats.”

About 85 percent of its motor boats, which range in price from 220,000 pounds ($335,300) to 2.3 million pounds, are exported, with a large chunk going to continental Europe.

Ben Davies, sales manager at Northshore Yachts, based in Chichester, West Sussex, said it had seen a huge increase in interest from Germany and France.

Manufacturing costs in the eurozone have risen by about 25 percent — putting pressure on their prices and margins.

European yachts took the unusual step of delaying advertising their prices on preview day until their rivals had shown their hand.

“Usually the price is stuck on the bow of the exhibit boats, but this is the first time I’m aware that some are holding off until they see what others are doing,” Johnny Cochran, UK director of the German yacht manufacturer Bavaria, said.

Interest is also strong in the Baltic, Scandinavia, the United States, the Middle East and Indonesia, boat makers said.

Northshore is finding that some British customers are particularly keen to buy British boats during the economic downturn.

It also welcomed the temporary 2.5 percent cut in sales tax, down from 17.5 percent, announced by finance minister Alistair Darling in his November pre-budget report.

“When you have a boat worth 305,000 pounds the VAT rather helps,” Davies said. “When you are buying a low-level item, it’s less so.”

$1=.6561 Pound

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