Bavaria Yachts, the buyers unveil a radical strategy

Bavaria shipyard

Drastic reduction in the range of boats, internalization of production, relaunch of the Nautitech brand The new management of Bavaria has announced its new strategy.

Back to boats 100% Made In Germany

The new management of the Bavaria group presented its strategy to overcome the difficulties it had faced until the announcement of its takeover by the CMP investment fund in September 2018. The first decision of the new management is to repatriate all the production of its boats to its German stronghold in Giebelstadt. Bavaria thus intends to better control the quality of its boats and regain the prestige of Made In Germany. The Bavaria R55 motorboat, which has been subcontracted to Croatia until now, will be built in Germany in the first half of 2019. The repatriation of tools is in progress.

Image of the Bavaria R55

Take back control over the development and construction of boats

The Bavaria group is pleased to have been able to retain its staff during its safeguard period. It now intends to rely on the loyalty of its employees to re-internalize as many skills as possible. "The staff identify very well with Bavaria Yachtbau, it is the heart of our company," says Erik Appel, Managing Director of Bavaria Yachtbau."That is why we want to continue to develop our permanent staff while reducing the number of temporary employees. This will allow us to significantly reduce production costs."

This strategy also applies to the field of boat design. The Bavaria manager announced the creation of interdisciplinary teams to better organize the transfer of new models developed from engineering to production and reduce costs.

Half as many boat models

Bavaria's new management considers the current product portfolio to be too complex. It sets itself the objective of increasing the number of models from 26 types of boats to 10 / 12 within 3 years, focusing on the core of the demand in the yachting market. In this way, it aims to improve the reliability of the product.

The Bavaria C65 model is abandoned

End of the C65 and the electric boat

Several boat models have already been abandoned, while others are being redesigned. The C65, Bavaria's largest sailboat, has been shut down, as has the range of electric and hybrid motor boats. The sail range is currently being reengineered. The process started with the Bavaria C50 and will continue with the C57 and then the C45.

Slow down the pace of new developments

Bavaria intends to limit the pace of new boat developments. The German shipyard announces 2 to 3 new models per year, a consolidation choice that contrasts with the strategy of rapid renewal of competitors such as the Bénéteau group.

Return of the Nautitech catamaran brand

The Nautitech brand, which disappeared when the German group bought the French multihull manufacturer for Bavaria Catamarans, will be reborn. "It is important to us that both companies can further enhance their respective identities in the future. Technically, the two countries will work closely together and significantly develop the partnership between Germany and France," said Ralph Kudla, Chief Restructuring Officer.

Involvement of employees and dealers

Kai Brandes, managing partner of the CMP buyer, confirmed the end of the acquisition process. "The Federal Cartel Office (Bundeskartellamt) has given its approval and the closing, i. e. the execution of all contractual conditions, has just taken place. This means safety for employees, customers and distributors as well as suppliers. Without giving more details, he welcomes "a good investment at a good price".

Bavaria Yachtbau's works council chairman Christian Hartmann welcomes the safeguarding of 800 jobs in Giebelstadt and France and calls for strong employee involvement. "We wish, as employees, to be more closely involved in the development of production and sales. The people who work on yachts every day are extremely important for improving existing processes and methods."

Ralph Kudla, wants to involve Bavaria's distribution networks around the world in strategic choices. "Among other things, a dealer advisory council will be established to allow us to hear customer feedback, take it into account and integrate it as quickly as possible into the manufacture of our products. In other words, to improve our products."

Difficult economic results until 2020

Restructuring specialist Ralph Kudla predicts that it will take many more months to see the effects of the changes at Bavaria. "Stabilisation, further development and a return to the growth trajectory are central themes of the restructuring. In addition, the future range of models must be defined. This is the biggest challenge and we will certainly take six good months to make the first decisions and give impetus."

In the first, shorter financial year, and due to the start of production, Bavaria will make a loss that CMP will bear as an investor. In addition, it takes a relatively long time to achieve efficiency gains in boat building. The German boating industry forecasts a zero result for the next full financial year (1.8.2019 to 31.7.2020) and significant improvements within two to three years.