Sail-World.com : India and emerging markets: the Truth, it’s out there!
India and emerging markets: the Truth, it’s out there!
'Gateway of India'
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Mike Derrett is well known in marine circles – ubiquitous you could say. He has advised the Korean government and provinces, consulted to the Middle East, various boat show organizers and currently, to an Indian organization formed of 80% of its recreational boating industry. Nobody is in a better position to shed light on the true state of emerging markets and the main players in manufacturing.
Currently in Dubai for the boat show, which although 5-10% down on exhibitor numbers is impressive in its format and the superyachts it has attracted (24), Mike says there is only a smidgeon of truth to the hyperbole that comes out of India.
True, there is vast wealth and enormous potential from the world’s biggest democracy, there is an affluent market segment buying boats and water craft of all kinds, and India boasts thousands of kms of coastline and waterways worth visiting, but, and here’s the barrier to actual growth, there is opposition from various community organizations who thwart marina development at every stage, development is bound by bureaucracy in government circles and in the industry itself, there is friction and factions.
KOTRA’s Graham Worthington and marine advisor, Mike Derrett. - Jeni Bone
As Mike explains, 'People are buying boats and the main hub of boating is Mumbai. There are around 150 moorings in front of the Gateway of India and they are mostly full of large luxury pleasure craft. There is a temporary marina in Goa, but you couldn’t call it a world-class facility. There are no real marinas. They have been talking about it since 2003, but many things have hampered their development.'
Waterfront real estate is exorbitantly expensive, much of it is government owned, there are plenty of objections whenever an investor lodges plans for an ambitious project, and the boating industry is frequently in disarray.
The recent Mumbai International Boat Show, which runs with government support, was significantly down on previous years because, says Mike 'of politics in the industry'. There was a mere handful of exhibitors and no post-show information available to media, despite plenty of local hype and a plethora of articles touting the 'explosion' of luxury yachting in India.
I won’t bore you with the extravagant claims, but contrary to the news reports, it would seem that the Med and Caribbean can rest easy that India is not yet their rival as a superyacht destination.
Those proponents who had come to feel alienated and unrepresented by the organizers of MIBS – approximately 30 dealers, brokers and marine businesses – broke away and formed their own group, now known as the Indian Marine Federation, to whom Derrett consults.
IMF recently joined ICOMIA and is planning various events to showcase their members’ products.
'For our part we are organizing ‘IMF Boating Days’ to introduce the boating lifestyle to Indians and visitors to the region. We have been facing a lot of conflict from the organizers of MIBS as we try to organize a venue, but we will get there.'
The next IMF ‘Boating Days’ event is scheduled to run 19 and 20 March at a venue yet to be determined. More at indianmarinefederation.org
The Gulf States
The six Gulf countries have seen strong growth in their boating markets in the past five years and with high revenues from oil have invested in substantial infrastructure projects in all of the countries.
Until recently, it was felt that the Gulf was largely immune from the global financial downturn. However, throughout 2009, business confidence had fallen in the UAE Emirate of Dubai and in Kuwait and peaked in late November 2009 with the announcement that Dubai World, the investment group owned by the Dubai Government had requested a deferment of 10 billion US$ bond payment due on December 14th.
This announcement created global uncertainty about the financial stability of Dubai that was only partially alleviated when Abu Dhabi, the UAE capital Emirate, supported Dubai to make the payment on time. Dubai is highly financially leveraged with borrowings estimated at 80 billion US$ to fund the once rapidly growing real estate market. The result of the down turn has been a considerable slow down in leisure boat sales which is also apparent in some other Gulf countries. Kuwait is at the other end of the Gulf from Dubai Kuwait and historically the best market in the Gulf for small boat sales but has had slow sales in 2009.
The over 100 marina developments under construction or planned in the 6 six Gulf countries had made it the most concentrated area of marina development in the world. The viability of many of these projects will be affected in the short term, at least for the next two to three years, the time widely estimated for the real estate markets to recover in the Gulf.
Mike is the expert on emerging markets and how they are performing and can be contacted at www.mikederrett.com
To give you an idea of just what kind of enthusiastic talking up there is about the Indian marketplace, check this out.
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