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12.02.2018

Exports driving the Finnish boat industry

Finnish boat exports are doing well: the value of exports increased by over 8 per cent last year. Boat sales in Finland remained at their previous level, but the industry is hopeful about future prospects.

According to Jarkko Pajusalo, Managing Director of Finnboat, the Finnish Marine Industries Federation, two already strong trends became even more pronounced last year: the popularity of aluminium-built motor boats continued to grow, and large sailing boats built in Finland fared well on global markets.

"Aluminium boats have been built by industrial means in Finland since 1955, and the number of boat builders keeps growing as does the share of aluminium-hulled boats of all motor boats. Finnish companies are also highly competent - and competitive - builders of yachts and large top-quality sailing boats. Sailing boats only represent one per cent of the aggregate number of boats sold, but in the combined value of exports, their share is over one-third," Pajusalo explains.

The aggregate net sales of Finnboat's member companies - boat builders, yards and industry traders - were EUR 535 million in 2017 (VAT 0%, calculated based on production and import prices). The industry employed some 3,500 persons in Finland.

Malta, Sweden and Norway, the most important export destinations

According to customs statistics, the strongest export countries were Malta, Sweden and Norway. In January-November 2017, only eight boats were exported to Malta, but their average unit price was close to EUR 9 million.

The value of exports to Sweden was almost as high, but the number of boats exported was markedly different: more than 4,700 boats built in Finland were bought in Sweden, amounting to an export income of EUR 66 million. In comparison, 91 boats were exported from Sweden to Finland, for a total value of good EUR 5 million.

Exports to Norway have been hampered by the long-term relative weakness of the Norwegian krone and the strong dependence of the country's economy on the offshore industry. Thus, the value of exports to Norway decreased in January-November 2017 by about 12 per cent. In contrast, exports to the UK and Russia soared last year.

"In Russian trade, we are behind the level of the peak years, but the market is showing signs of returning to normal. The U.S. market is growing as well, although the euro-denominated value of exports decreased from the level of 2016, owing to a major yacht deal made that year amounting to EUR 5 million," Pajusalo explains.

Domestic boat sales holding steady

Although boat sales in Finland showed signs of growth late in the summer of 2017, the number of boats sold during the entire year stayed at the level of 2016. Measured in euros, the whole industry's domestic sales of products and services fell by 0.6 per cent while the total net sales increased by 3 per cent.
The slow growth also manifests itself in the outboard engine sales figures: in 2017, the number of outboard engines delivered to Finland was up by 3 per cent on the previous year.

The sales of sailing boats continued to be very modest. There were only 11 initial registrations of new boats over 20 feet long.
"The sales of new sailing boats are well below the level of the best years. This, however, does not tell the whole story of what's going on in the business, because at the same time, the imports of second-hand sailing boats have increased over the past few years. This boosts the demand for industry-related trading and services as well as travel-related services," Pajusalo states.
On the whole, Pajusalo considers the current year's prospects as promising.

"The Finnish economy continues its strong growth, consumer confidence is high and the outlook on boat industry exports remains positive. However, Finland holds great potential for boat travel that we haven't been able to exploit so far. The waterways of our archipelago and lakes are unique in global terms, but we must combine forces in developing the services and marketing our water areas," Pajusalo says.

Boat registrations in Finland

In 2017, the number of boat registrations remained virtually on the previous year's level, totalling 3,578 registered boats.
Altogether 2,754 motor boats, 692 personal watercraft and 67 RIBs/inflatables were registered.
In terms of numbers of registrations, the largest growth took place in PWCs (+43 registrations/6.6%)
Only 11 sailing boats over 20 feet long were sold in Finland, which is a very small number compared to the most active years. At the same time, the trade of high-quality second-hand sailing boats has grown and become international.
The sales of small boats (rowing boats and boats less than 4.5 metres long) fell from the previous year's level, totalling 2,810 boats (-6%).

Value of boat exports

In 2017, the euro-denominated value of invoicing in boat exports, as reported by the companies, amounted to EUR 239 million, an increase of +7 per cent over 2016. Of the total production of the Finnish boat industry, the share of exports was 73 per cent in 2017.

The currently available customs statistics only cover the period January-November 2017, which means that the total number of boats that actually crossed the border during the year is yet unknown. In January-November, the value of exports was EUR 248 million (+8.3%).

Exports to Malta increased to over EUR 70 million, placing Malta above Sweden as Finland's number one export country. During the review year, the other countries or territories surpassing the EUR 1 million mark in Finnish boat exports were Greenland, Denmark, Belgium, British Virgin Islands, Turkey, Japan, Italy, United States Virgin Islands and Estonia.

A total of 9,184 boats were exported to 40 countries in January-November 2017. In terms of numbers of boats exported, sailing boats accounted for a share of 1 per cent, but in terms of export value, their share was 34 per cent.

Trade statistics on the top 10 export countries:

Country No. of boats EUR million Change
Malta 8 71.8 +96.7%
Sweden 4,733 65.7 +11.7%
Norway 3,243 48.7 -12.7%
UK 99 8.4 +99.2%
Germany 263 8.0 +6.5%
Russia 222 6.0 +85.1%
USA 8 4.6 -29.0%
France 102 4.5 -16.17%
Switzerland 89 4.0 +259%
Netherlands 36 2.8 -21.1%

Boat imports

The customs statistics on boat imports are likewise from January-November. During that period, the value of boat imports amounted to EUR 59.1 million (+44.6%).

The statistics exclude all boats that cost less than 840 euros.

The imports mainly consisted of personal watercraft from Mexico and Japan and also to some extent boats from Poland and Sweden. Most of the PWCs imported to Finland are sold further to other parts of Europe.

Trade statistics on the top 10 import countries in January-November:

Country   No. of boats EUR million Change
Mexico   3,775 26.7 +34.2%
Poland   220 7.5 +21.5%
Sweden   91 5.4 +225.1%
Japan   370 3.5 +291%
USA   709 1.8 -9.6%

Wholesale deliveries of outboard engines

Altogether 22,596 outboard engines (+1.0%) were delivered to retail sales through Finnish importers.

Of these, 11,000 engines (+3%) were delivered to Finland.

Finnish importers export outboard engines to other countries such as Russia and the Baltic states. Of all outboard engines sold in Finland and its neighbouring countries, some 80 per cent have power ratings of less than 40 hp, which reflects the fact that the demand for high-power outboard engines is notably lower in Finland than in the biggest boat industry markets.

A total of 1,275 outboard engines rated at over 100 hp were delivered to Finland, representing a growth of 5 per cent from the year before.

Net sales of member companies

The net sales of Finnboat's member companies in 2017, EUR million (VAT 0%, calculated based on production and import prices):

    Domestic, EUR million Exports, EUR million
Boats   89.6 (+8.6%) 238.8 (+7.4%)
Engines   51.5 (-8.2%) 19.2 (+5.2%)
Accessories   75.2 (-13.5%) 25.7 (+8.3%)
Services etc.   34.7 (+28.2%) 0.4 (-33.5%)
Total   251.0 (-0.6%) 284.1 (+7.3%)

ENTIRE INDUSTRY, TOTAL EUR 535 million (+3.3%)

Boat industry barometer; Industry outlook for 2018

Finnboat has once again compiled estimates from its members on their net sales and personnel. The industry expectations for 2018 are slightly positive, and employment is expected to continue growing to some extent.

Personnel in 2018

24% of companies expect to have more staff (21% in the previous year)
4% of companies expect to have fewer staff (5%)
72% of companies expect their number of staff to remain unchanged (74%).

Net sales in 2018

61% of companies expect their net sales to grow (51% in the previous year)
7% of companies expect their net sales to decrease (6%)
32% of companies expect their net sales to remain at the same level (43%).

Of all companies that responded, 9% had had temporary layoffs in 2017 (15% in the previous year).

Further information:

Managing Director Jarkko Pajusalo

Finnish Marine Industries Federation Finnboat
Käenkuja 8 A 47, FI-00500 Helsinki
Tel. +358 (0)207 669 341, +358 (0)40 673 4032
www.finnboat.fi
www.suomiveneilee.fi

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