Yacht industry sails ahead

A growing number of European yacht manufacturers are planning to set up plants in China.

At the same time, domestic companies are also acquiring foreign players.

In 2012, China's equipment manufacturer Weichai Holding Group Co Ltd - the largest subsidiary of the Shandong Heavy Industry Group - bought a 75 percent stake in debt-laden Italian luxury yacht maker Ferretti Group for 178 million euros ($229.53 million).

Other leading yacht brands, including Azimut Yachts, Princess and Sessa Marine, also expressed interest in having production bases in China.

"It's a good (place) for the struggling European marine industry, which shrank by 50 percent compared with 2008," said Ingemanson.

And the move should also be positive for China's yacht industry as the foreign rivals' foray into the local market may help domestic players improve their quality standards and technology amid the intensifying competition, he said.

Meanwhile, Chinese companies are facing two distinct business situations.

Most Chinese yacht makers mainly exported their production in the past, while others moved into the domestic market earlier and grabbed some market share.

For instance, Zhuhai Sunbird Yacht Manufacturing Co, a major manufacturer in China, posted total revenue of 582 million yuan in 2012, up 46.9 percent year-on-year, according to the company's annual report.

The manufacturer, which has a 47.5 percent market share of China's special yacht market, forecast that they will get and deliver special yacht orders worth 500 million yuan in 2013.

But some other Chinese manufacturers have to deal with dwindling sales due to the lackluster global economic situation.

Dalian in Liaoning province, a city that developed a yacht industry some years ago, has about 15 yacht builders with an annual output of 250 million yuan, but the city's leisure boat industry saw a 50 percent drop in sales in 2012, the CCYIA said.

No more than 20 percent of the yachts made in Dalian are sold to domestic clients and the shrinking global market had a great impact on the companies in the city.

The lack of support facilities is also limiting the sales of leisure boats.

There were 46 yacht clubs in the mainland by April 2013 with 6,404 berths, but berths are still in short supply, the CCYIA said.

That situation also translates into business opportunities for Chinese investors.

The Fortune Character Institute said that marinas are the most promising investment in China's yacht sector.

"The Chinese real estate industry will show stronger interest to invest in the yacht industry," Zhou at the institute predicted.