Lamberto Tacoli, CEO and Chairman at CRN (Ferretti Yachts Group) has recently spoken exclusively to CPP-LUXURY.COM about his company’s strategic approach to future development and provided his overview of the sector.
Compared to other luxury industry sectors, how has the sector of yachts performed in 2013 and what are your expectations of 2014?
In 2013, the international nautical industry did not perform well. This resulted mainly from the international socio-economical scene, which affected not only purchases, but also the possibility to take out loans, and last but not least, buyers’ unwillingness to risk purchasing luxury products such as superyachts. The niche market in which we operate is certainly at the top of the luxury world and, normally, it is the first to suffer the consequences of an economic crisis. Having said that, we have high hopes for 2014. After a year of great depression such as 2013, we are hoping for a slow process of recovery, which is already taking place in some parts of the world. For example the United States, where the yacht market is showing the first positive signs mainly because of the second-hand market, which is performing well.
Recently, we signed two letters of intent for the construction of two 44 metre CRN megayachts for the European and the Middle Eastern markets and the construction of a 68 metre superyacht, the largest ever manufactured by our shipyard for the Asian market. With this news, together with other negotiations that are being finalised, we can confirm that our shipyard is thriving and this certainly bodes well for the years to come.
As a niche manufacturer of ultra-luxury super-yachts, which are the key elements in creating awareness for your brand as well as your products? How do you adjust or fine-tune your strategic targetting according to each region/market?
The nautical industry, especially that of megayachts, is definitely a niche market and, therefore, it is simple but at the same time challenging when it comes to creating brand awareness. What makes a difference in our sector is primarily the product. Only quality products, which stand out from the group due to their design and innovation increase awareness. Naturally, this is a difficult challenge to face. There are many shipyards which despite their presence on the market for decades, never managed to stand out, mainly because their products are always standard. CRN projects, such as J’Ade and Chopi Chopi, which were present at the Monaco Boat Show last September, have been fundamental to raising brand awareness globally and they have had, and are still having, a great influence on sales performance. Obviously, every shipyard has a different strategy for every single market. However, the commercial performance is definitely related to the product, its quality and global brand awareness.
Which is your present largest market in terms of sales (including orders) and which markets do you consider as top priority in terms of expansion – why?
Our main market at the moment is EMEA (Europe, Middle East and Africa); in fact, the Mediterranean is still a fundamental basin for CRN and the nautical industry in general. Recently we have unsigned important letters of intent for the construction of megayachts for the European and Middle Eastern markets and, therefore, it is clear that this is our trading focus. The reasons can be attributed to two factors: first of all EMEA has a deep nautical culture with years of experience and, secondly, the Mediterranean is an area that manages to link magnificent landscapes with the most efficient and modern infrastructures and services in this sector.
Shifting our focus onto the rest of the world, some markets, for example, North and South America, have had a significant crisis and sales stopped for four or five years. Last year, there were the first signs of hope, and sales, especially those in the second-hand market, are now starting to recover slowly.
Among the markets that we are analysing closely, there is certainly the American one, in its wider sense North, Central and South America, as well emerging countries such as Nigeria, Angola and South Africa. In addition, there is China, that is, mainland China, together with areas such as Hong Kong, Singapore and the Phuket area. Other markets that we would like to capitalise on are Russia and Turkey, which performed well during the crisis period.
What is the product development process for an ultra luxury super-yacht? (beyond design and technical features).
The development of our products does not differ much from what occurs in other industrial sectors. The research and development phase is very important as it leads to the manufacturing of products with innovative design and high quality. The biggest difference, when compared to other industries in the world of luxury, lies in the fact that the buyers’ desires have a great impact on the production of megayachts. Owners personalise and make decisions about the final product according to their desires. They are supported by the shipyard experts, but the decisions are theirs. This does not happen in any other industry, except in high level real estate, and this certainly has an impact on the manufacturing process of our products.
Which are nowadays the best selling super-yachts? (i.e. specifications such as size, interior design, technical etc).
Today, in the world of megayachts we can identify two main areas of interest for buyers: on the one hand there are superyachts, between 40 and 50 metres, and on the other hand there are those over 65-70 metres, a countertendency for the trend of the last ten years. Therefore, there is a gap, between the 50 and the 65 metre superyachts. The main reason is a matter of image; despite being able to afford larger superyachts, many buyers prefer to opt for boats that attract less attention in the current economic crisis. Another reason is the uncertainty of economic recovery. Many owners would rather not tie up large assets in a 60 metre, but opt instead for boats of 40-50 metres as ‘temporary’ boats, with plans to buy larger ones in the future.
There is then a very active market for boats over 70 metres; in this case clients have no financial or image problems and can use a large yacht as a communicative or business vehicle. These owners are taking advantage of the current climate and buying megayachts at lower prices, which at delivery, in three or four years time, will be far more valuable than the price they originally paid.
However, looking ahead I can predict that along with the global economic recovery there will be a recovery in the 50 to 65 metre segment, a segment which has always fared well.
How does CRN as a luxury brand relate to lifestyle? Do you see opportunities in cross marketing with major luxury brands from other sectors? i.e. fashion, interior design, furnishings, technology (TV, sound etc)
It is important to mention that CRN is associated with the highest level of the luxury world and, within the nautical world, we have managed to create an important space for the shipyard. There is a very high level of our brand awareness amongst owners and prospects. Our aim is to increase brand awareness outside this sphere, our clients’ “stratosphere”, to become a truly aspirational luxury brand that people dream of owning. Partnerships with other sectors within the world of luxury are certainly excellent opportunities to increase our brand awareness and in the light of this we are planning to collaborate with important companies that are expanding just like us.
Have you identified significant differences in purchase decision making between consumers in emerging versus mature markets?
Personally, I think that the essence of the purchasing process is the same all around the world and it is only the form that changes. I like giving this example: a Chinese, an Italian and an American customer would like to buy a pair of shoes and they go to the same shop, they try on the shoes and they buy the same shoes. Each one of them will have his own approach, the Italian will ask for a discount, the Chinese customer will have a long and formal negotiation while the American will immediately make an offer before he starts bargaining. The essence of the purchase does not change. The same thing happens in the world of superyachts: the purchasing process is common to all cultures but the form changes.
In terms of marketing, which are the most effective communications channels in reaching your existing as well as potential customers?
Our main communication channels are definitely our events: on the one hand, there are the macro-events such as the Monte Carlo Boat Show, which allows us to exhibit our products 360°; and on the other hand, there are the personalised micro-events, that allow us to systematically reach owners and prospects.
Which are your most important product launches in 2014? Please include unique features.
In 2014 we will have two very important product launches. The first one will be the new 60 metre, which will be launched on 1st March 2014 during a private function. The exteriors were designed by Francesco Paszkowski and the interiors by Design CRN office in collaboration with the owner’s designer. The unique feature of this new boat is the bridge for owner’s sole use, for the first time present on a yacht of this size. The second launch of 2014 is a 73 metre, designed by “Omega Architects” with a modern and aggressive design, which will feature one of the biggest, if not the biggest, beach club in the world.
More from LEADERS
Francois Graff, CEO of Graff, speaks of the strong foundation for company expansion and for pushing the boundaries of horology …
Last year, Grand Seiko was introduced as its own independent brand. How was this decision received and what are the …
How did Rado perform in 2017 and what are your expectations for 2018? We had a very positive year in 2017, …