Superyachts, once a luxury commodity produced only within the prestigious circle of historical European shipyards, are now available closer to home, much to the delight of boat lovers with deep pockets. Ambitious commercial shipyards on the mainland have been picking up the manufacturing of steel-hull superyachts.
There obviously are incentives for buyers to choose local products. On the mainland, the effective tax rate is over 40 per cent of the total purchase price for a foreign vessel, at least 10 per cent higher compared with ones made in China.
Domestic players manufacturing custom-made superyachts at competitive prices include Shanghai's Double Happiness, Sunbird in Hunan, Singapore's Raffles Yacht operating out of Shandong, and Hong Kong's Cheoy Lee, whose shipyard is in Guangdong.
Roger Liang Chong-wai ran a shipyard in Italy for 10 years before starting afresh with Kingship, based in Zhongshan, Guangzhou in 2004.
"Although my family business involves the industry, I didn't know much about the mechanical side until I took over the shipyard in Italy," he says. Liang had to buy the shipyard because it was the only way he could keep his yachts when it filed for bankruptcy. The decade of running a foreign shipyard gave him a better understanding of the trade, in terms of business and manufacturing. About nine years ago, he decided to move the base to China for its proximity to a growing market, skilled labour and abundant suppliers. His shipyard, spanning a total of 24.3 hectares and with more than 100 staff, focuses on building steel-hull superyachts over 24 metres in length.
The yachts are built in compliance with Lloyd's Register or RINA and MCA LY2 certificates - all internationally recognised quality control standards. All the compartments are shipped directly from Europe for assembly in the China shipyard.
The price range for imported luxurious superyachts can exceed HK$500 million. Kingship's most recent achievement, Star, a 42-metre yacht equipped with a state-of-the-art mechanical heart designed by famous Dutch firm Vripack, is priced at HK$128 million. It comes with two salons, a master bedroom and four guest suites, a jacuzzi and an open deck. The yacht can accommodate up to 12 guests and 10 crew members.
Mainland-based operations not only enjoy lower tax rates, but also lower labour costs. "Making a superyacht is a very labour-intensive project," Liang says. "I have to pay at least €40 to €50 [HK$400 to HK$500] per hour for a worker in Italy, but in China, it's about one-tenth of that. Do the maths."
Aspiring owners can have their own design team and engineers to build their dream home on the sea. The process takes about two years.
"Owners can be very much involved in the process. Often the husband and the wife will be looking at different things," Liang says.
The husband, Liang says, will be looking for a safe, powerful and strong yacht, while the wife will be more focused on the interior and aesthetics.
Star, for example, was initially a bespoke project for a very active family, and extra parking space was designed for the owner's two speedboats. A lounge was built inside the captain's chamber to enable guests to interact with crew members.
Regarding customised services, manufacturers have noticed differences between European and Asian owners.
"European buyers enjoy the building process. They want everything bespoke, but our Chinese buyers don't want to wait," Liang says.
Liang's wife, Kingship's board member Diana Lee Man-choi, recalls that during a yacht expo in China, clients asked to see more yachts.
"They didn't understand that it actually takes a lot of resources to build superyachts and the process is part of the fun," she says.
"European buyers are often very excited about the building process. They'd e-mail us every day and send their own engineer to the shipyard to overlook the progress."
Asia's wealthiest have certainly whipped up their appetite for the ultimate luxury. A whole chain from marina clubs to boat shows and talent training programmes has been set up to cater to customers' demands. "You can see in mature markets that yachting is an industry involving many segments and offering many jobs," says Giordano Pellacani, general manager of Azimut Benetti Group (Asia).
According to Cheuram Consulting Group's report on the superyacht market in China published in September last year, the number of marina clubs on the mainland has gone up to more than 90, and another 100 marinas are under construction.
"In Hong Kong, there are too many boats and not enough berths, but it's the other way round on the mainland," Liang says.
Yu Wenzhe, owner of Shanghai Metropolitan Marines Yacht Club, has witnessed a growing demand for berths on the mainland since he first founded a marina along the North Bund about 10 years ago.
"There has definitely been more demand for berth spaces for superyachts," Yu says.
He has expanded the business into a second marina on the Pudong side, expected to open in June.
Many yacht expos, such as The China (Shanghai) International Boat Show and the Hainan Rendez-Vous, have bloomed across the country in recent years. Tickets to such high-end events have been selling like hot cakes.
The China (Shanghai) International Boat Show, opening next week, was almost fully booked by exhibitors two months ago, and the number of visitors is expected to exceed 40,000.
"When I started working for the [Shanghai] boat show in 2004, there were only 40 exhibitors, but in 2009, the number reached 350," says French expat Delphine Lignieres, founder of the Hainan Rendez-Vous boat show.
The show, one of the most recognised boat shows on the mainland, concluded its fourth edition earlier this week. "[The superyacht market] is growing faster in Asia because there's excitement."
Liang agrees. "You see, in China, everything is possible. Customers on the mainland learn very fast and are eager to know what they're paying for." Pellacani adds that it's the children of the rich and famous that superyacht makers are targeting. He explains that many of these privileged young people are educated overseas and exposed to the luxury yachting lifestyle.
The allure ultimately comes down to the sense of exclusivity that comes with having a yacht, as the wealthy look for the next status symbol available
As Lignieres puts it: "People feel that owning a boat makes you belong to a prestigious community. It's a lifestyle."
What makes a superyacht super?
Steel hull rather than fibreglass hull
Size ranges from 24 metres upwards. The largest superyacht in the world is the Eclipse of Blohm + Voss, owned by Roman Abramovich (who also owns Chelsea football club), which is a staggering 162.5m
Can accommodate: a sauna, gym, massage rooms, plunge pool, cinema, library and helicopter pad
Features a full crew including chefs and stewardesses, in addition to the captain, deckhands and engineers