Decline in U.S. Boat Exports
The marine industry saw its lowest export year in 11 years in 2015 and saw imports grow for a fifth consecutive year. According to the National Marine Manufacturers Association (NMMA)’s 2015 Recreational Boating Statistical Abstract, imports of recreational boats and marine engines coming into the U.S. rose 28% in value in 2015, driven by increases in imports of large inboard cruisers, sterndrive boats, and personal watercraft. Meanwhile, exports declined by 18.5% in 2015, reflecting the continued rise in value of the U.S. dollar (which had reached a 14-year high in late 2015/early 2016) against other currencies.
An estimated 171,500 new powerboats were sold in 2014, an increase of 6.4 percent over 2013. Annual retail sales of new boats, engines & marine accessories in the U.S. totaled $16.4 billion in 2014, up 12.3% from 2013. Florida again ranked first in total expenditures for new powerboats, outboard engines, trailers and aftermarket accessories. Spending in Florida increased 22.5% in 2014 compared to 2013.
With the increasing spending ability of the boat buyers throughout the world, boat export has become quite a big market in the U.S. as there are several companies which deal with importing, exporting and overall sale of boats. The global leisure boat market is anticipated to gain prominence over the forecast period owing to growing demand for recreational boat activities. Improving global economic scenario and rise in GDP levels along with rising disposable incomes have resulted in high adult participation in leisure boating activities.
U.S. exports of recreational marine craft and accessories totaled USD 2.3 billion in 2012, accounting for an estimated 31 percent of all US manufacturing in this industry. The United States is also a net exporter in this industry, exporting $446 million more than it imported. The U.S. recreational marine market makes up approximately 75 percent of the entire world market for these products. Servicing this market, U.S. firms provide high-quality products and benefit from production efficiencies that make them competitive worldwide. The best export category for the recreational marine sector is motorboats from 26-40 feet in length. This class of boat is also the highest-demand boat in the United States. As a result, U.S. manufacturers can produce these boats in a labor-intensive assembly line format, reducing costs but maintaining high quality.
Canada continues to be the United States’ best export market of pleasure boat products; however, economic growth in the Asia Pacific region in recent years also makes Canada an attractive target market for Asian boat exporters. Additionally, Canada signed an agreement in principle of the Comprehensive Economic and Trade Agreement (CETA) with the European Union in 2013, so Canada’s two-way trade of recreational boats will experience changes as the European Union looks to increase exports from this sector to Canada.
In the European region, countries such as Italy, France, Turkey and Greece are home to some of the major leisure boating markets. A momentous rise in tourism, travel, and sightseeing activities in these countries is favoring the market development in this region. The French pleasure boat industry ($1.49 billion in turnover) is the third largest in the European Union behind Italy ($ 2.99 billion) and Germany ($ 2.58 billion) and the fourth largest worldwide (after the United States, Italy, and Germany). Despite its relative weakness in the motorboat sector, France is the number one global sailboat producer, contributing 29 percent of worldwide exports in 2010.
Turkey is one of the fastest developing countries in this industry. Turkey is surrounded by water on three sides: the Aegean to the west, the Black Sea to the north and the Mediterranean to the south. Turkey ranks eighth in the world and first in the Europe in ship building with the help of its advantageous geographic situation. Additionally, Turkey is the sixth most visited country in the world and yachting has a remarkable share in this ranking. Approximately 1 million yachts regularly tour the Mediterranean; Turkey’s aim is to meet 5 percent of this demand, which adds up to approximately 50,000 yachts.
One way to achieve lower tariffs is through free trade agreements (FTAs) and multilateral agreements. FTAs with Mexico and Australia significantly opened up these markets for U.S. boating products. U.S. exports of boats to Mexico increased 65 percent in a four year period after implementation (1993-97) while U.S. exports of boats to Australia increased 82 percent in the first four years of the FTA. The Trans-Pacific Partnership (TPP) could see significantly lower tariffs in Vietnam, Malaysia, and New Zealand. In addition, the Transatlantic Trade and Investment Partnership (TTIP) could help balance tariffs with the EU, the second largest market behind Canada.