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Poor infrastructure keeps Vietnamese millionaires away from yachts

Vietnamese millionaires are rich enough to possess yachts. The only reason which makes them hesitate to purchase yachts is the poor infrastructure and the lack of marinas.
How big the Vietnamese market?

Duong Hong Thuy, Director of the Representative of China-based Heno Company, which specializes in making ship parts and equipments, said that most of the demand from Vietnam focuses on medium class products, while there is almost no order for high class yachts.

The main clients are mostly private companies or travel firms who provide yacht leasing services. Few Vietnamese individuals purchase yachts because yachts are really expensive, while different tax rates are being applied to individual and institutional owners.

According to Nguyen Anh Tuan, Director of the Vietnam Maritime Technical Service Company, individuals are imposed 10 percent of import tax, 10 percent of VAT and 30 percent of luxury tax. Meanwhile, the travel firms which are licensed to carry passengers can enjoy the luxury tax exemption.

Also according to Tuan, a lot of Vietnamese millionaires want to own yachts, but the number of people who have purchased yachts remains modest because of the poor infrastructure.

Sharing the same view with Thuy, Tuan believes that the yachts in Vietnam are mostly medium class ones, every of which is valued at two billion dong.

Le Anh Tuan, Chair of BDC Company, said that BDC is possessing 10 medium class yachts, while it does not have any luxury one. In Vietnam, yachts are mostly used to serve families; therefore, medium size yachts that fit 10 travelers are the most wanted

There have been no official statistics about the number of companies operating in the field. However, Thuy thinks the number is not high, and the competition is not stiff.

“Most of the companies operating in Vietnam are trade companies, not manufacturing companies,” Thuy said. “The office of Heno in Vietnam only takes orders from clients and gets involved in import activities. Meanwhile, the Vietnam Maritime Technical Service Company has the function of designing and giving consultancy”.

Infrastructure poor

Despite the high demand, the yacht market in Vietnam remains quiet because of the poor infrastructure.

Tuan said that many clients want to buy yachts, but they still hesitate to do that because there are too few marinas

Tuan has emphasized that the yacht market in Vietnam has not developed not because of the economic crisis. The high inflation has been badly affecting the majority of people, who have low and medium income, while this remains untouched to the rich.

He went on to say that other luxury products such as super cars are still selling well. Despite the great efforts by ministries to curb luxury imports, enterprises still spent 1.5 billion dollars in the first four months of the year to import the products which Vietnam tries to restrict imports.

“The lack of marinas is the main reason behind this. No one wants to buy yachts and then leave them uncared or face the risk of being stolen or damaged.

In fact, many marinas have been licensed, but only the one on Tuan Chau Island has been operational. Vietnam still lacks marinas not because of the capital shortage or investors, but because of the complicated procedures.

“It costs only 200 million dong only to build a standardized marina, therefore, capital arrangement proves to be not the main problem,” Tuan said. “The biggest hindrance is getting permissions from many different state management agencies”.

However, despite the big obstacles, Tuan has affirmed that the market’s potentials are very big, because the number of people who are ready to pay millions of dollars to buy yachts is very high.

“Vietnamese millionaires now have private resorts, super cars or aircraft. So it would be quite normal if they plan to own yachts,” he said.

Source: VietnamNet