Team: Blue Ocean PlanIT

(IIFT Delhi)
Sector: Luxury Yacht
Mahindra Odyssea

BY:
Dhruv Bhatia
Manvi Bajpai
Sirish Gupta
Yash Saxena
Boating Industry Segments:
Market Presence in segments comprising 70 % Revenues >
Sectors US UK Avg.
The Market segments in Marina/Storage 5.96% 8.64% 7.30%
recreational industries Boats sold 38.40% 42.06% 40.23%
was analysed in US & UK Servicing/Maintenance 5.16% 23.85% 14.50%
to arrive at indicative Equipment 19.40% 12.15% 15.77%
Engine 4.67% 8.10% 6.39%
figures
Others 26.41% 5.21% 15.81%

Revenue Sectors
Marina/Storage Boats sold Servicing/Maintenance
Equipment Engine Others

3. Enter:
1. Enter: 16% 7%
Odyssea
Ocean Blue JV 6%
7 % + 6% + 40%
7%
16% 40% 53% Market presence
2. Enter:
Mahindra Marine 15%

Engines
7 % + 6% 4. Enter:
13% Market presence Odyssea Services
7%+ 6 % + 40% + 15%
~70% Market presence
 1. Marina Capacity: Estimation >
No. of
Company Projects Status Locations Capacity

Under
Blue Ocean 1 Const. Cochin 50

15 Planned Maharashtra 700 ? Blue Ocean Aquasil H2O Goa Yacht Heaven
Goa 15 Projects 3 Projects 3 Projects 1 Project
Kerela
Tamil Nadu Others ?
Orissa
Chhattisgarh
Gujarat
H2O, Rajiv Capacity: Projection India
Somani 1 Built Goa 11 3 -4 Years under scenarios
1 Planned Goa 50?
1 Planned Mumbai 50?
Aquasil 1 Planned Goa 50?
Good Medium Low
1 Planned Chennai 50? Capacity (No. Projects)
1 Planned Kochi 50?
Goa Yacht Haven
1200 (20-30) 600 (8-10) 300 (4-5)
Pvt Ltd, 1 Planned Goa 300
Umaji V
Chowgule
Kochi, Bolgatty Marina
Total Planned 1300 Awarded to Gulf Marinas. The Indian arm is Ocean
Blue Marinas (49% partners of M&M).
Sujoy Chahal-
Another Opinion 8 Estimates India 800?
MIBS, Marina
Source:http://www.marinebusiness-
world.com/index.cfm?nid=45585, IBI News
Source:http://IBI News.com
Marina Segment: Revenues >

Typical returns in Marina business: 10-15% Depend upon

Rent Rate in Market

Depend upon Depend upon

Integration with Hospitality/ Abundance of boat sizes in Growth in coastal

Tourism and Travel industry > 12 m segments population growth
160,000

 Condominiums or  Small boats can also be 140,000

Residential marinas give stored at ‘Rackonium’
higher returns on  Rack storage is cheaper; 120,000

investment. Hence more suited for 100,000

 Mahindra is already into Indian markets 80,000

hospitality hence option  However larger than 12
60,000
of developing marinas at Mts boat can’t be stored
places where it can in racks 40,000

create synergy with  Rackoniums could be one 20,000

Hospitality business of of the opportunities for
0
Mahindra can boost mahindra 1990 1995 2000
returns. India US China
Marina Segment: Revenues >

Calculation:
As shown before ‘ Ocean
Blue Wave’

Investment
450 Crore 50- 75% Market share
estimated in Indian
Marina segment
@ 1300 berth
capacity
45 Crores Return @ 10% Calculation:
A Marina returns its
A 300 Berth Marina Investment over a period of
Usually costs, 100 10-20 years.
Crore and break Assuming median value of
evens in 10-20 15 Years to break even
gives 8 % return.
years.1 16 Crores PPP Partnership will
US$ 25000-30000 sweeten up the deals.
cost per slip. 2
Earning@ 75% market share
& 51% equity.
2. Engines: OutBoard Engine Motors Market> Potential & Revenues

Domestic •Most Outboard Motors have a running life of

Export Market 1500 Hours
Market
•Average usage of Boats stand at 600 Hrs/year
42 Cr for Commercial usage and 200Hrs/Year for
A US$ 2 Billion recreational personal usage. Hence commercial
market engine needs overhaul in two years
30 Cr 2012 •Motors in the 200 HP range are priced at 3.5
2008 Lac and are almost 40 % of the Boats cost .

Indian Export:
Only
US$18000 @ 50% Market share
Both Export & 66% & 33%
opportunity & 30 Crores Revenues from
Domestic Domestic & Export
opportunity markets
Boat Market: Factors affecting>
Per Capita Water Area 2
available per urban 1
coastal resident.

Inland and Coastal

86% Explained Wealth, HNWIs
water area availability by a statistical
analysis on
no. of boats Potential of
and the factors No. of Boats in
listed on a country
countries around
the world

3 4
Marina/ Coastal Sea Experience
Infrastructure
3. Total Recreational Boating Retail Market >
120000

Imports in US$
Imported recreational boats
100000 market to reach 400 Crores
by 2012.
80000
Using a simple forecast based
on Import figures for
60000
Recreational & leisure boats
40000 in India.
We calculated a CAGR : 40%
20000 (3 Years) Based on the 2008
figure of 140 crore we get
0
400 crores by 2012.
2002 2003 2004 2005 2006 2007 2008 2012 E

2002 2003 2004 2005 2006 2007 2008 2012 F

888 682 620 5767 2,640 9573 28,475 109389.56
-35.14% -23.20% -9.09% 830.16% -54.22% 262.61% 197.45%
Motor Boating Retail Market > India Potential
Marina Capacity Increasing
Recreational Boats Total Floating Stock in India
1500
150 100 1000 1000

Mumbai Goa 500

• Market is primarily in the small boats 0

segment 2009 2012 F

• Mumbai International Boat Show (MIBS) Motor Boats Imported in 2007-08

official told us last year MIBS sold only two
large boats rest all were small boats 100
• MIBS estimates the total boat deals of $
100 Million facilitated through the show 20% 40%growth based on
growth based on
• The real market in India can be far larger HNWIs growth recreational
rate industry CAGR
as a large no. of boats (80% ) are not
imported in India but registered at foreign
locations due to 35% import duty. Both 250 530
Mallya’s and Ambani’s boat are registered
No. of Boats Sold by
with foreign flags.
foreign players by 2012
Motor Boating Retail Market > India Potential Revenues

• Based on MIBS figures the overall market could grow to 1000-2000

Crores by 2012 calculated at 20%- 40% growth rates.
• Based on the growth in number of units imported- 250 and 530 at ASV
of INR 50,00,000 total import market could be 125-265 crores. At 50%
share of this market replacement can get revenues 60-120 crores.

Domestic market targets of 300 boats by 2012 is feasible at ASV of INR 25 Lakhs.
Total revenues from Home markets could then be around INR 75 crores.

Defence markets- Coast Guards (1073 Cr), Marine Police (500 Cr) can bring in
occasional additional large orders of that can amount to additional revenues.

75- 100 Crores – Domestic Markets

Recreational Boating Retail Market > Target Segments
Marine Police: Luxury Hotels in India Sporting events for Motor
With a budget of 72 maintain a fleet of even Boats, sports fishing
Marine Stations. 20 Mercedes, Hence a events.
Need 500 boats possible buyer of Yachts.

Indian Navy need 80

small boats. Sporting Motor Boat Exports
Marine police/ Hotels,
Coast Guards Boats
Boat Clubs,

India has 84000 HNWIs Investment & Buying patterns

HNWIs.
HNWIs
Individuals
70% of these HNWIs
live in Mumbai.

From 2005 to 2008

HNWIs in India grew
@ 20%

Yacht, Car like Investments

 Indian Market Competition>
140
117
120 20-27 feet segment
Price (Rs Lakhs)

100

80

60 54
42 40 37 35
40 31 29
19 15
20 14

0
Larson Beneteau Regal 2565 Regal 2520 Bayliner 265 Cobalt 232 Cobalt 220 Cobalt 222 Sea-Doo Mahindra Sea-Doo
Cabrio 350 Window Cruiser Islandia Odyssea 22 Challenger
Express

200 182
MO 22 and MO 33 are among
180
27-36 feet segment the cheapest in it
160
Price (Rs Lakhs)

140
120 Other players have already
100 made huge dealer network and
80 67.5
55
advertisement campaigns
60 50
40
20 Stiffer competition in 22 feet
0 category
Meridian Bayliner 300 Cruiser Mahindra Odyssea Silvercraft SC34
33
 > Export Market Targets
USA and Canada: Big market for motorboats for
younger crowd. High level of competition. So low
cost advantage will sell huge.

France: Excellent market for <25 feet

segment motorboats

Netherlands: Numerous but small Italy: Very low tax on pleasure boating. Best
waterways. Huge market ideal sale is for 32- sale is from 20-40 feet boats
36 feet
 Motor Boating Retail Market > Export Market Potential
• Outboard Motor Boat Sales in US: 150,000 Units; US$ is a 33 Billion
• China is one of the leading exporters today of Yachts including the larger ones
• Taiwan which also started with smaller boats did well initially to supply in export markets.
• The lower boat segment is relatively more price conscious hence a definite market for Low
cost exports.
Boat Business Price- Low Cost Technology & Design Brand Domestic
Inputs labor expertise Markets
India Yes (India can Yes (As shown in small cars No Introductory
leverage on Indian export- India has done
working in Boating better due to its relatively
Industry in Gulf better availability of
countries engineering talent
China Yes No No Maturity

75- 100 Crores – Export Potential

Historical Trends in Motor Yacht sub segment
World Floating Stock analysis : Product Development
Analysing the Floating stock available around the world. We found the favorites sub-
segments in numbers.
Categories to move in < 12 Above 30
Mts Boat segment Below 12 Mts 12-30 mts mts
World Motorboats 14549 18446 1103 100.00%
> Cruisers (42.7 %) – Very
high volumes in the Catamaran 433 222 18 2.98%
> Caddy Cabins (20.27%) Small Cruisers 6208 353 12 42.67%
> Bowriders (8.87 %) Pontoon 197 22 1 1.35%
Narrowboats 24 32 4 0.16%
To be analysed further>
Catamarns- Only 2.98 % Bowrider 1289 2 0 8.86%
present, Hence not a very Cuddy Cabin 2949 37 0 20.27%
favorable segment. Houseboats 360 970 42 2.47%
Historical Trends in Motor Yacht sub segment
World Floating Stock analysis :

12-30
• Of the total available boats 6-12 Mts Mts >30 Mts
in 6-12 mts segment Till 2000 9338 57.15% 10083 47.00% 531 37.00%
availability has decreased After 2000 7001 42.85% 11368 53.00% 904 63.00%
from 57% to 42% While
availability has increased Used 14538 93.13% 18435 90.11% 289 20.76%
other segments New 1073 6.87% 2024 9.89% 1103 79.24%

• The availability of New boats

has decreased even more
rapidly in the world market Larger Boat Smaller Boat
for below 6m segment. 22000
300000

17000 250000
• The new boats sold in US in 200000
12000
Small and Large segments
7000 150000
has also decreased over the 1980 2007 1980 2007
years.
Positioning Matrix for all Boat brands >
Scouting for partners- Analysis of other brands: Strategic Positioning

After 2000 Market

6-12 Mts 12-30 Mts >30 Mts Sirena Marine of the group will produce yachts
in Bursa in the name of Italian Azimut in
Total 5021 7630 511 turkey- A potential candidate for being a a low
Sea Ray 584 Azimut 810 Azimut 40 cost supplier
Carver 361 Sunseeker 773 Falcon 32
Sealine 329 Fairline 566 Benetti 26 Searay is facing close downs and cost upscales
Jeanneau 259 Princess 557 Sunseeker 25
Silverton 208 Sea Ray 532 Burger 24 Hence the matrix can be used to find potential
Bayliner 199 Ferretti 398 Maiora 23 partners or Co- Branding strategic alliance
Cranchi 178 Carver 378 Westport 22 partners, Potential manufacturers to whom
Beneteau 172 Pershing 203 Mangusta 16 Odyssea can supply as Low Cost Partners
Fairline 171 Sealine 194 Overmarine 13
Meridian 144 Cranchi 158 Custom 12 Some other companies facing close downs and
financial crunch could also be tracked down in
Regal 127 Meridian 126 San Lorenzo 12 the matrix Like ‘Couach’

Cruisers 117 Cruisers 107 Cantieri Di Pisa 11

Azimut 115 Silverton 106 Isa 11
Bavaria 109 Astondoa 100 Baglietto 10
Brand Building Through Strategic Alliances: Strategic Alliances for Co-Branding

• Disadvantage of the ‘Made In India’ and the unknown

Mahindra name in this segment can be overcome with
design collaborations with leaders like Pininfarina from
Italy.

• Enter into co-branding activity which are suffering from the financial
meltdown and provide them with cost effective manufacturing base in India
and use their network to sell our boats in established market

• India also has an advantage of having High Skilled Indian workers working in
the Gulf Boat building Industry which can be leveraged.
Yacht Brand building: The 8 Point agenda >
Inviting customers to see their Yachts in construction
Focus on Individual
customisation

High Price
Innovation & Imagery &
Creativity story telling
Independent
owned dealerships
& Consultants Selective Luxury Tradition
Distribution Brand and
Experience heritage
Stay in touch with the
customer in a segment
where repeat business Superior Superior
will drive growth Service Quality
Exclusive
communication

Personal Selling outranks glossy

advertisement in Boating Magazines
Independent owned dealerships
 Key demographics of first time boat
buyers
66% male; 34% female
Median age of 37
Married with children (1+)
Homeowner
Household income at least Rs 20,00,000
Typically resides in rural/town and suburban areas

Segmentation Characteristics % of Total Boat Owners % of Total Households Index

Fast Track Families 4.20% 1.00% 430

Country Casuals 5.7 1.6 367
Big Fish ,Small Pond 5.90% 2.1 285
Country Squires 4.00% 1.40% 278
Big Sky Families 2.30% 0.90% 243
Winners Circle 1.70% 0.80% 204
Shotguns &Pickups 1.30% 0.60% 202
God's Country 4.40% 2.20% 202
Blue Blood Estates 1.60% 0.80% 199
Mayberry Ville 5.00% 2.60% 190