Why are high performance boats so expensive!
 

I've have always wondered why hp boats are so expensive, what is it that drives the prices up so high? I know motors, drives, hull are not cheap, but dang !! Once you get over 30ft and within a few years of when the boat was built it sky rockets out of most peoples reach!

Are the boats that cost anywhere from $100k up to $650k because people are willing to pay it, or is there really that much money put in them?

Hypotheticaly, if someone could do everything from ground up, I mean everything from building the motor, not putting together or buying parts,, I mean just like they do say at mercury, then fiberglassing and or whatever material to mold a hull, gauges, drives, paint and whatever else goes into it to have a completed hp boat. Would the coast be anywhere near what they sale for.


I'm just curious is all, I know, if you have to ask!! But I just really was curious, I have no clue what goes into the building of one of these boats so I figured I would Ask.


Rick

I would guess that R&D and overhead play a big role in the cost of boat/engine production. Also from reading about people doing re-rigs it seems that all those little parts that you forget about, every nut and bolt, and retaining clip all add up to a lot of money.

Yeah i know i left out lots of what goes on to complete, but those nuts and bolts are in the cent ranges.. I've seen huge beautiful homes for less than some of these boats cost and you get so much more ! I'm not bashing them at all, again just wondering..

Rick

Don't forget you're paying for the facilities and all that goes along with that...those fixed costs are a big chunk of money since square footage is needed to product these products. Add in labor, materials, all the variable costs and you get a high priced item.

I know high quality home builders that work out of their garages, basically they just move their equipment from one job to the next and don't have to incur much overhead like the boat builders do.

I think it's because we're all drug importers and have bales of money to spend on Rolex watches, breast implants, Italian cars and cigar boats.

Does the few people that can and are willing to fork over that kind of money keep those prices up? If no one wanted to spend that kind of money would the prices drop? That has to be one heck of a profit, guessing around 150k to 200k.. Again guessing!!!

If no one was to make a penny in the build, would a boat that sales for 500k cost 100k to build?

Well there has to be profit built in. It would be nowhere near 400k on 500k boat. look at the price of power and drives and that eats up a big chunk of the budget. At the rate companies are going out of business they are can't be turning much profit. Many of the companies that are still areound are running staffs far less than what they used to. Many companies are in survival mode. There are companies that can't sell hulls for the cost of glass and resin I inquired about a hull form one manufacturer and the quote they gave me was the same as they would have sold for in 1993.

Now some companies are doing well considering. I remember reading an article on Outerlimits and how they had to look at everything they do in order to become a more efficient builder. They went as far looking at using lean manufacturing techniques. (for a custom builder that has to be interesting. OL has also diversified there business by consulting, re-power, storage, etc. rather waiting for the market to come back they went out grabbed different parts of the market.

I here what you are saying about building a boat start to finish and offering your own power etc. (I believe that OL sells there own power plants as well with the connections to Whipple they have) But that is big R&D that nobody is willing to spend right now even if they wanted to build that way.

Also the custom nature drives the price up. Many of there boats have many custom set ups, that takes man power which is expensive. Also Raw material cost are up across the board. And lets not forget economies of scale These guys are not selling many boats. Again not to keep bringing up OL but they slotted to sell something like 8 29's for the year! and sold out production and said that was their most popular product launch. MTI, Skater, OL,DCB,Nortech, combined put out what maybe 100 boats? (I could be way off)

Limited production, one off stuff, labor intensive. Not many of the pieces are coming out of injection molds or off stamping dies. Long term builds, a cash flow roller coaster for sure. Especially if they build ahead and hope they sell.

Do some research. No, a new boat that sells for 500k has 300k in material. Add 30k for a paint job. Also need to pay some guys to build it. If the builder does make a few bucks he has to give 40% to uncle sam. It's a wonder these boats even exist.

Just imagine your boat. Then make everything way stronger, bigger, and nicer quality. It doesn't sound like you've had the chance to get your hands on a truly hi po boat. Walk around one or and look at the rigging and equipment on these boats. Then you'll understand. The cost to maintain these boats are more then what some boats cost.

Posts 7 and 8 nailed it.

Yup !
The terms "automation and/or robotics" do not exist in this industry. There isn't two of these things built the same.
ed

also on the economics of scale thing I remember reading that mercury will not sell in 1 year the amount engines GM produces in a day.

The guys that buy the new boats keep it all moving. For every $500k boat, there's advertising, marketing and Warranty. Don;t forget that a $500 k boat rarely if ever sells for $500k. Look at the prices Merc charges for their engines and drives. But then look at the company, not a huge profit put in proportion.

For normal recreational boats, look at the difference in price for a Cobalt versus many others. But then look at the longevity of the boat. Now add in the huge increases, not to mention fluctuations, in the cost of high-quality resins. Add to that a highly-qualified staff to do all of the labor required. Add in backroom staff, R&D, designers, transportations, etc...

The real killer is Volume, or lack thereof. Most of the industry has determined that they now need XXX dollars to survive, on far less volume. So for an Outerlimits or a Cig or whomever to not only remain in business, but to have current product and keep customers happy, they need margins. Maybe you can get a 30% margin, but after you pur it back into the business and new orders and R&D, it evaporates quickly. I'd guess many are probably returning a 5% to 12% margin overall at most.

I fully understand, I grew up in havasu and also lived in Parker on the water, ive seen plenty of nice boats, yes, my 25 Baja is nothing in comparison! I just have always wondered if there was 500k in boat, or more in mark up. Yes motors and drives are expensive, but are they really worth as much as we are forced to pay for them? It just seems to me that every part to a boat cost way more than it should, just my 02...

I am a huge fan of these boats, so please don't take this thread as me bashing!

They are only worth what someone will pay for them. You'd have to be stupid to pay MSRP on these types of boats. Realistically (especially in today's economy) I'm sure most can get them for 80% of MSRP, maybe less. I know our Donzi speced out how it is has an MSRP of $910k new and the Formula is close to $600k but you'd be nuts to spend that, or just ridiculously rich

I think I was looking at it a bit differant... I was thinking, lets use seats... Say they cost 2k to build, they add 5k to the boat price... Then motor, 15k to make, $35k added to cost of boat, so on and so forth, I'm just using made up numbers to present my question. Is this how the cost of a $500k boat gets it price tag...

Your not kidding, I think the ridiculously rich part is most accurate!! I would have to believe if you have that kinda money you really don't care how much they spent on building your new toy!!

Henry Ford did not invent the automobile, he created a way to build them by the thousands.......cheap. When 40,000 people will pay $60K for a 33ft cigarette boat you just might see an assembly line to build them that cheap. Currently, even the builders that put out "standard" models are actually building a fairly custom product.

And their is the sponcership of the race boats to help promote the sales to the consumer to factor in. This is a huge part of the overhead, as well as advertisement. They proberly equal each other. Advertisement is my biggest overhead in my business.

Thank you sir, that is exactly what I was wondering.

it would be safe to say take the sum of the actual parts, double that and you may get close to what it actually costs to build and thats with zero profit. The other factor is simply this, I have a set of molds . . . . why on gods green earth would i ever build two boats for fifty thousand dollars when i can build one and sell it for a hundred? Not a single boat coming from my mold is my hobby :D

Ok, I'm getting it... There is not 500k worth of boat, just all the other factors such as advertisement, labor, huge mark ups etc makes it cost so much!! Probably why they depreciate so much so quick... At least the ones I can afford!!

Rick

On a 500k msrp boat, dealer cost will be in the 300-325k, they will try to get 10-15%. themanufacturer will have 250k in it, so manufacturer makesv50-75k gross profit and dealer makes 30-45k . So it will sell for 330-370k

Just go to so,e of the websites that have price sheets. (Donzi, sunsation, formula do I know, probably others as well). Look what they charge for items where you know the approximate cost.

Example:

Donzis build sheet on a 43ZR lists a 3 bank battery charger for $1,160. Even a top of the line 3 bank charger only costs ~$350. Of course there is labor of installing it built in but it's still way over priced.

A garmin 740 is listed for $5760 and at the store is about $1000.

Hell even props are heavily marked up. Triple Mercury Racing cleaver props is listed at $31k and would be about $18k etc etc

So if there where no mark ups, no dealer cost etc etc, that boat that sales for $500k would be around 300k. I've been looking on power boats for sale by owner and some are asking for 500k plus, how does that work?

I mean there are lots of factors in pricing of a boat. Name, engines, options, hours, maintenance upkeep, age, etc etc etc depending on the brand and the way it's optioned out, it's not in common to see used boats over $500k. You will quite often see those for sale for a long time

We looked at a new 39 Cig back in 08 at sports marine in ft Myers. They wanted MSRP and wouldn't come down. Had to laugh and walk away and he i sisted the boat would be gone in a week. I believ That boat was for sale 4 years before it finally sold

I guess it just takes that one person with deep deep pockets! I know there is nothing cheap with those boats, repairs, fuel, up keep, transport etc etc!! It's like it doesn't end ! But I guess if you can afford the boat, you can afford the rest! I know personally I couldn't afford the weekend fuel cost!! But I can afford YouTube to watch the vids of them !!

Rick

You do know you could build comparable power to Merc for less than half the cost. On each package they sell...

Well said, these r toys and having fun isn't cheap!! If we all needed them to go to work they would be cheaper!!

The craftsmanship and technology in these boats today are awesome and we pay for it cause it makes us happy

Oh yeah! I believe that completely ! however, I am one of the guys who doesn't have the knowledge needed to build a motor so I'm stuck having to have it done and pay that big ticket at the end!!

Rick

I have been boating my entire life, lived in Parker Az, and in lake Havasu. I've seen some of the nicest boats imaginable with all the state of the art technology, biggest power, nicest paint jobs ect. But when i hear what they have invested in them it blows my mind!!

No matter how hard I try to wrap my mind around it I just don't see 500k-800k sitting in the water. Don't get me wrong, they drop my jaw every time I see one !!

For that kind of money, I see a nice house that will last me a lifetime with a few cars in the drive, all of wich would be paid in full !!

Rick

True, very true. But were talkin new boats here. Just try and sell a new boat with anything but a motor from Merc.

I do agree that the numbers are mind bending though. When I think of an eight hundred thousand dollar boat I then think what kind of house would that buy? Are there equal amounts of time, materials and labor in both? I actually do know why each costs what it does but on the surface it's still mind bending :cool:

Ahh, yes u could but u would not be on the water!! And probably pay a whole lot more in taxes!!

Guaranteed, the guys buying those boats new already have a garage full of whatever they want also!

Haha...
No, I'll keep my little Baja, And I guarantee there fuel cost and repairs are more than my taxes are per year!!.

Yeah, there is no doubt they have all the cool toys !!

Rick

Some do and some did.......

you could sell it to me....I hate Mercury. It would be interesting to see a dealer have two identical boats side by side on his sales floor, one with Merc power and one with aftermarket and see the buyers reaction when they see the price difference. Aftermarket companies need to sell/advertise more eng/drive "packages" and advertise the savings more in the media. That's the only way prices will ever come down. Anyone have a guess to what the diff would be with two 525 packages?

Exactly, I see more in a home than I do in a boat for that kind of money!

Rick

That's funny! I had to read it twice!!

Rick

Just saw a 35 DCB M35 2009 for $550k for sale by owner, i just dont see itI think of my lil 25 OL, it seats the same amount of people, floats, loud, my boats does 80 plus, but yet his boat is 500k ( half a million )more than mine.. I just dont see it...

Again, not bashing, I would take that boat in a second if someone gave it to me !

Rick

Fact is, less then 1% of the boats registered in the us are performance boats. Its a special, one off, custom product. If you want one, it will cost. Unique items are always expensive, then you add the fact that they are performance based and the cost goes up 10 fold. HP costs money, how fast do you want to go......lol