headlines and talk of consumer frugality, one would not expect a
boat show to be a place of much good news.
Lombard Marine Finance, however, saw a 10 percent increase in
applications for finance at this year’s show, and a 52 percent
increase in the value of those applications.
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“We have a good amount of liquidity at the moment,” said head of
marine finance Ian Braham, “and so we have a great opportunity to
offer finance.”
That liquidity is obviously being put to effective use, as
Lombard Marine Finance’s performance at the boat show occurs in the
context of a 30 percent increase in turnover year-on-year.
Braham noted no radical changes in trends among applicants,
except for the continuing rise of financing for luxury yachts.
Gross tonnage of assets financed by Lombard this year was
noticeably up on 2007, as was the average value of business
written, suggesting a shift towards these larger vessels.
Such an increase in superyacht sales (the UK sector is now
valued at €375.36 million) corresponds with constant growth amongst
the ranks of the extremely wealthy: those considered to be
“economy-proof” and thus very unlikely to be hit by the current
economic tension.
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By GlobalDataAlso mentioned by Lombard was the continuing shift in financing
towards sail- rather than motor-powered boats – with sailboats now
taking a sliver over half of a market traditionally dominated by
the motor segment.
Commenting on Lombard’s 52 percent increase in application value
in a market that has certainly not grown by 52 percent, Braham put
the market share growth down to the flexibility of finance plans
offered.
An example given was that of the finance plan of a yacht bought
for charter use. Monthly payments were varied across high and low
tourist seasons, to accommodate the difference in revenue reaching
the boat’s owners as it was chartered through a broker.
“Marine finance is very different to real estate” said Braham.
“The system appreciates that it is rarely essential for someone to
own a boat, and so we are very flexible in the way we structure
finance.
“For example, take early termination. It is very rare for a boat
to go past five years in a 15-year plan, but people will almost
always switch to a different plan and a different boat rather than
leave the market entirely.”
Meanwhile, elsewhere at the boat show, over at HBOS’ marine
finance stand, things looked less rosy. According to one major
manufacturer, it was “turning a lot of their customers away” from a
near-empty booth.
Fred Crawley
