Viking Yachts & New Jersey Yachting Industry Improving

After luxury yacht-builder Viking Yachts furloughed more than 200 boats workers in the Fall of 2010 amid a downturn in boat and yacht sales, executives looked to the Fort Lauderdale International Boat Show (FLIBS) in October.

At the annual event, prospective clients from all over the world would walk along its docks and contemplate spending millions of dollars on a Viking sportfish or cruiser.

It turned out pretty well. Twelve boats were sold. “We had a very, very strong Fort Lauderdale boat show,” said Viking Yacht’s Peter Frederiksen. “We carried that into the Miami Boat Show (the following February).”

Viking Yachts, based in the New Gretna section of Bass River right next to Little Egg Harbor, expects it will sell 55 to 60 yachts over the 12 months that ends in July, a number that will make the builder profitable, and an increase from 42 boats last year. And, since February, Viking has called back about 200 workers.

It’s a bit of buoyant news for the yachting industry that has had its sales sink in recent years. Marine industry officials hope the slide will end this year. Some boat dealers at the Jersey Shore are reporting better sales as well so far.

Boat sales in New Jersey have seen treacherous waters over the past 5 years. In 2010, $183 million was spent on new powerboats, motors, trailers and accessories in the Garden State, down from a whopping $414.7 million in 2006, according to the National Marine Manufacturers Association (NMMA).

But in recent years, the pace of the drop has slowed. Last year’s sales figures were 19% lower than 2009, which were 24% lower than 2008.

While reports are mixed, with some businesses not seeing improvements that were forecasted, Melissa Danko, executive director of the Marine Trades Association of New Jersey in Brielle, said optimism is rising. Improvements in the economy and consumer confidence will help the yachting industry, she said.

“Overall sentiment has been much more positive in terms of heading in the right direction,” Danko said. “I think we are seeing signs of improvement, some signs of recovery. There is always a piece of negative that may impact us along the way, same as other industries.”

It follows a national trend.

“Even in this environment, there are people who have saved money and who have de-leveraged and who are in the position to buy a boat,” said Thom Dammrich, president of the National Marine Manufacturers Association in Chicago. “They are buying boats, they are just not buying them in the numbers that we have seen previously.”

At Comstock Yacht Sales & Marina in Brick, 30 more new and used boats were sold during the first three months of the year than during the same period in 2010, said Chip Gahr, the company’s president. He is seeing more confidence in consumers. While customers still must have good credit, buyers are able to qualify for a loan, he added.

Over the past 3 years, consumers put plans on the back burner and waited to see what would happen with the economy and the stock market, he said.

“The (Dow Jones industrial average) is over 12,000, everybody’s 401(k)s came all the way back and plus,’’ Gahr said. “I think the feel, the mood of the customer right now is kind of like, ‘Hey, things look a little bit better’ and they’re willing to part with some money.”

Boat buyers are being discriminate, looking for quality, value and price, said Paul Zamoyta , owner of Coastal Boat Sales in Brick. “Our sales are increasing,” he said.

The industry also faces another issue: high fuel prices.

“Fuel prices always have an impact” on sales because gas prices are higher on the water, Danko said. “What we have seen in past times when fuel prices have risen is that most boaters don’t give up the activity or give up the sport.” Instead, they plan shorter trips or stay tied to the docks to reduce fuel expenses, she said.

“Because these outboards are so fuel efficient these days, those gas prices have not hindered the acquisitions,” Zamoyta said.

Viking Yacht’s boats, outfitted with large cabins designed for long trips, are between 42′ – 82′, costing upward of $7 million. “We are finding that after the 2010 Fort Lauderdale Boat Show, people really started getting interested again,” Frederiksen said. “They had a home for their boat (by selling it) and they were able to buy a new one.”

Its factory on the Bass River is capable of building 102 boats a year. But the company has cut staff to meet its lower production numbers. Between 2008 and 2010, Viking Yacht furloughed about 700 workers, and now has about 780 employees in New Jersey.

“We are doing fairly well compared to what the industry is doing,” said Bill Healey, president and co-owner of Viking Yacht.

The company had to manage its inventory.

“We slowed down our production so we could not fill the pipeline with inventory,” Frederiksen said. “It didn’t make any sense for us to build these boats and then furlough people when the boats didn’t sell.”

International business, now at 35% of total sales, has helped Viking’s bottom line. “We are seeing more international sales than we ever saw,” Healey said. One boat just left for Puerto Rico and another to Dubai. Three boats were sold and headed for the Dominican Republic.

Source: APP.com (David Willis)

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