Costing out a new boat

[Loren Beach]

Interesting article on building and pricing.
http://stephenswaring.com/marine-engineering-105-why-my-boat-costs-what-it-costs/

Applying their cost estimate (per pound) for an offshore boat like mine, my O-34 might cost over $700K to reproduce today. I guess that their formula really applies best to one-off boats, tho.

:0

If putting a new design into series production, once you create the tooling the cost per boat gets more reasonable. Couple of decades ago a yard owner that I know said that he always figured that when paying for making a new plug and mold, the break-even point would come at about 100 hulls. Of course the more you can charge per finished boat, the fewer you have to sell to reach that point.

This might explain why so many smaller builders have foundered over the decades after producing a short run of a new design and finding that there was just not enough market at any reasonable price point for them to make a profit.

When Ericson Yachts acquired the tooling for my new O-34, for likely pennies on the dollar, they could make a profit where the originator (Pacific Boats) could not.

Tricky Business.

ps: Just looked at an on-line inflation index. My boat sold for a reported (approx) 90K in 1988.
$100. then supposedly equals $206. now.... so today's price for my production "high end" boat might be at least $185K. Still a long ways from a one-off boat. We need to locate a winning Lotto ticket!

 

[Christian Williams]

Beneteau. This mass producer cranks out what we estimate is 3,000 to 5,000 relatively solid, low-cost-to-market yachts each year.

I had no idea they made that many boats.

 

[Mark F]

Interesting. So my mid level 8000lb E27 should price out at $200,000, new?

 

[Alan Gomes]

Thought I would pass along this interesting observation from my friend Neil Dutton, who worked for several of the southern Calif. boat builders in the 1970's:

Interesting treatment and it's hard to argue with their experience . . . . however, we did these same studies at Islander Yachts in the 1970's and found we could be much more accurate on the per pound scheme if we backed out the ballast weight from the formula. Keep in mind these were factory boats without the normal after-shipment add ons such as sails, winches and electronics.

Neil

 

[Loren Beach]

Breath-taking $$

Interesting. So my mid level 8000lb E27 should price out at $200,000, new?

True, I suspect, if building one custom boat. Or, maybe a couple of them.
Mass production of over 100 boats (in my one little example) is where the up-front cost of molds and patterns gets amortized out. And then there's Catalina, with 10000 of some models, so I recall.

IIRC, Ericson bore the whole startup cost of the low production run models like the 31C and the 36C, and later the Ron Holland 33 and 36. My guess is that they set the price at a level that reflected a limited run of those models, and sold them into an educated market.

Ironic that legend has it that the initial E-35 (mk one) was built from a cast off mold, in the 60's. As the end of production was approaching, in 1988, they obtained the tooling for three of the Olson's at minimal cost when Pacific Boats went under, so their smaller produced numbers of those should have made them some $.

Lots of speculation on my part. I do know that my "adopted" boat model shows the same attention to detail in construction that I have seen in Ericson's of the period. i.e. no corners were cut.

 

[Slick470]

Lots of speculation on my part. I do know that my "adopted" boat model shows the same attention to detail in construction that I have seen in Ericson's of the period. i.e. no corners were cut.

Loren, I think that is true to a point. My understanding is towards the end of the O911s production they built a version that was a little more up-spec'ed on the racing hardware but included less cabinetry and interior woodwork than the previous builds. I can only imagine that was a cost saving measure on the production floor that was spun as more racing oriented version of the boat.

Of course that is speculation on my part

 

[Rick R.]

I will list mine at the fire sale price of $150,000

 

[Kenneth K]

Price listed is base price. Beautiful Boat.

Also, a 2017 Pacific Seacraft 37 listed for $450,000.

Better start consulting the Admiral....

 

[Christian Williams]

To me, it's as beautiful as a Rolls Royce, and to me, a Rolls Royce is clunky and old fashioned.

People buy these boats because they know what they cost, and they know everyone else will know what they cost.

They're all around me, and I know some of the owners.

Meh.