FOUNDER AND MD OF ASIA’S LARGEST YACHT DEALERSHIP, MIKE SIMPSON REMAINS AS MOTIVATED AS EVER AFTER 33 YEARS LEADING SIMPSON MARINE – SO WHEN WILL HE SLOW DOWN AND ENJOY THE LIFESTYLE HE HAS BEEN PROMOTING FOR SO LONG?
FOUNDER AND MD OF ASIA’S LARGEST YACHT DEALERSHIP, MIKE SIMPSON REMAINS AS MOTIVATED AS EVER AFTER 33 YEARS LEADING SIMPSON MARINE – SO WHEN WILL HE SLOW DOWN AND ENJOY THE LIFESTYLE HE HAS BEEN PROMOTING FOR SO LONG?
You recently staged the Asian Premiere of Lagoon’s flagship Seventy 7 in Hong Kong, an exciting event for Simpson Marine, Lagoon and the Beneteau Group. What was your take on the reaction to the yacht?
I think most people had the same reaction I had when I saw it for the first time at the Cannes Yacht Festival. I was bowled over by it. I thought it was an incredible yacht, such a leap forward for Lagoon. One of the key features is the drop-down balcony in the owner’s cabin. You have the natural stability of the yacht because of its huge beam, so when you’re sitting at anchor the yacht is nice and stable, and to have your breakfast out on that little balcony would be fantastic. That was one thing that struck me and a number of people obviously comment on that as it’s a major feature.
I think the huge interior volume is another key feature along with the styling, which I think is brilliant. A few years ago, Lagoon brought in Nauta Design to get involved with the design of their fleet and it started to really transform the interior from that rather mass-production look, which we were used to, to something much more stylish.
It’s got that Italian flavour and I think that is really transforming the brand image and certainly now with the bigger Lagoons, it’s a winning combination.
The Seventy 7 incorporates a lot of luxury motor yacht features like the bar and drop-down TV in the saloon and I think the yacht could actually appeal to motor yacht owners. Of course, they’re going to have a motor yacht version of it (Seventy 8), so that’s on its way.
The Lagoon Seventy 7 is proving so popular that there’s a bit of a backlog in production – an order today may only arrive in 2021. Is that a problem?
Let’s put it this way: I’ve had several discussions with the shipyard about this, asking them to build another shipyard so they can increase the production. As it is, Lagoon is doing so well, they are expanding and in fact they’ve taken over a couple of the Beneteau yards to increase the production of the smaller Lagoons.
They have now just finished a new shipyard in Bordeaux to build the Seventy 7 and Seventy 8, and that is ready to go into full production fairly soon. I think they’re doing their best to increase delivery, but this kind of yacht is labour intensive. It requires a lot of craftsmanship compared to, let’s say, the Beneteau production yacht lines. This is much more hands on and I think to increase the production beyond a certain point, the quality would tend to tail off, so there’s that limiting factor, I’m afraid. But I really wish they could build more! I would be very, very happy if they could because we are getting customers lining up now, which is obviously very good to see.
Overall, do you see catamarans continuing to grow in popularity?
They are. It is interesting how that has developed. We’re getting more and more enquiries and what’s interesting is the demand for bigger and bigger cats. We’ve been talking to Lagoon for many years about building bigger Lagoons. A number of our owners who had bought the 620 in the past and more recently the 630 said, ‘We want to continue with Lagoon, but where do we go from here?’
It’s taken Lagoon a long time to take up this challenge. For them, the Seventy 7 was a major challenge. They were used to building a production boat where they had a guaranteed market and they were very successful, and to some extent this was a step into the unknown. Here we are, dealing with much bigger yachts, huge set-up costs with building the new factory, hiring skilled workers and so on – and the question was, is the market really there for it? It took a long time for them to be convinced, but I think now they’ve also just been blown away. Everyone is so delighted with the reception it had and with the product. It’s a beautiful yacht.
Simpson Marine recently announced its EPower financing scheme. What drove this initiative and what has been the reception?
EPower was dreamed up by my CFO Elliott Cheng, but it’s something that we’ve been thinking of for many years. Yacht finance in Asia is an issue – not easy to arrange. In Hong Kong, generally it has been pretty easy to organise, but in other parts of Asia it has been pretty difficult.
In Singapore in the last few years, we’ve managed to get financing but Thailand has been difficult, Malaysia, difficult, Indonesia, difficult, and China, very, very difficult. Around the region, financing for yachts has always been an issue, so we had this idea of developing our own in-house arrangement.
Elliott dreamt this up and it has taken us quite some time to build up and develop this to the point where we felt we were ready to go public with it. We announced EPower just before the Singapore Yacht Show and during the show we actually managed to sign two contracts with EPower – a Lagoon 620 for Malaysia and a Beneteau GT46 for Singapore – so that was a very good start. We want to expand this so we can take in bigger yachts and bigger deals. We see this as having great potential for us.
What are your thoughts on the Singapore Yacht Show, where you had a huge contingent and a very prominent location?
Because of its strategic location, the Singapore Yacht Show is the most important show in Southeast Asia. In fact, I have to say it’s probably the most important in Asia now that the future of the China Rendez-Vous in Hainan is less certain. Singapore is a major show for us so we obviously give it a major effort. We usually have people from all of our offices there. We were very happy with our position, as it was very visible, and we ended up with quite a good display of yachts and overall, we were very happy with it.
Why isn’t there an international boat show in Hong Kong, arguably the biggest market in Greater China and Southeast Asia?
I think you’d have to ask boat show organisers. Hong Kong should be the major show in Asia, you’d think. Certainly, this is the most active market in Asia, the most sophisticated market in Asia, even if there are no marina berths and no particular interest from government in allowing more berths to be created.
Notwithstanding that, this is still the yachting centre for North Asia and as we all know because of the current state of the China market, Chinese buyers considering the purchase of a bigger yacht would want to search for and keep it outside China, so certainly Hong Kong is the best place to showcase yachts. I think the main problem it’s a question of where.
What’s your feeling on the China market?
Years back, everyone was excited about China. It was rather like the early days in the Japanese market, back in the late ’80s. I remember all these statistics that people produced to show the boat-per-capita population of Norway and America and so on, then compared it with Japan, ‘so therefore the growth potential was huge’. This was how they hyped up the market potential and persuaded people to think this was a fantastic opportunity.
I think the same thing happened in China. Because it was starting from ground zero, everyone was thinking: ‘What’s the population again – 1.4 billion? And they’ve got how many yachts at the moment?’ Everyone got excited about the potential. The reality is that those who could possibly even consider buying a yacht are a very small percentage of that huge population.
Even those who might be tempted to buy a yacht face the challenge of the current crackdown on displays of conspicuous wealth. Of course, the 45 percent tax in China is also a major put-off for people considering buying larger yachts. For a smaller yacht buyers might accept it, but for buyers who can buy a larger yacht the tax is a big deterrent.
That excitement about the China market reached a peak during the crisis in 2008 and 2009, when China was still pouring money into the economy and many in the yacht industry saw this as being a lifesaver. In fact, not so many were able to make a success out of it. A number of companies came out here, looking at possibly opening offices, but if you look around, very few of them did. And I think we can see now that things did slow down dramatically after the crackdown on corruption in China. I think the market is going to be slow to develop from now on. I think everyone now realises it’s going to be a slow growth in China.
However, there have certainly been some success stories including sailing yachts and the Lagoon sales into Sanya.
That’s it – there’s a caveat. We can see that it’s going to be a long haul in China and it’s not going to grow nearly as rapidly as we had all hoped, but at the same time there are good signs. You can look at Wanda Group and their marina development up in the north of China and you can see the impact that’s going to have in generating interest, buzz, excitement around the water.
You can see other signs like that, other marinas and marina projects still opening despite the crackdown. You’ve still got interest there and you’ve still got people seeing the value of it within China. When developers keep putting their money on the table, it means there’s an awareness that this has great potential in the future. All that is very encouraging. In addition, there have been some good signs of recent sales.
For us, the most exciting thing in China is actually the Chinese who want to buy a large yacht but not necessarily keep it in China. We’re told now there are more high net worth consumers in China than anywhere else in the world and those buyers have studied all the good magazines and seen what people with considerable wealth do in other parts of the world. Obviously private jets and superyachts figure pretty highly on the bucket list of things that every billionaire has to own and do, so for us that’s a rather interesting part of China at the moment.
As well as Hong Kong and multiple offices in mainland China and Taiwan, Simpson Marine has offices in Singapore, Malaysia and multiple offices in Thailand and Indonesia. Which Southeast Asian markets most excite you now?
That’s interesting because I was recently in the Philippines and I was quite amazed to see how Clark has grown. I was shown the development plan for Clark through 2032 and they’re looking at having – if I remember correctly – around 35 million passengers going through Clark at that time. They’re trying to shift from Manila north because Manila is less attractive now because of traffic and everything else.
That was just an indication to me. I’d heard they were buying yachts down there, we’ve heard of a few and we’ve been involved in a couple of negotiations down there recently. We’ve known there’s been interest down there, but not a lot happening for some time, and then suddenly it does appear that the market or that economy is starting to float. Around Subic, too, are signs of big developments. Expressways are being put in and you can see infrastructure has been developed there, so Philippines is one ‘new’ market.
The most exciting of all, however, is Indonesia. I think that’s the market everyone is watching to see what happens next. I’m afraid the result of the election in April in Jakarta was disappointing for the yachting industry because ‘Ahok’, who’s very close to the President, lost. That’s caused a little bit of a hiccup. I know a number of people who were seriously hoping that Ahok would get in because he was progressive and for development.
Nevertheless, it’s not the end of the story because the President is very keen on developing marine tourism and certainly a number of his allies and supporters in business are all standing by to go with a number of interesting infrastructure projects for marine development and so on right through the island chain. With over 17,000 islands, the potential of the area between Australia and Singapore and then up into Malaysia, Thailand and Vietnam is just enormous. I think for the next 30, 50 years, this is going to be one of the world’s biggest growth areas in terms of yachting.
I hope that in the shorter term we do see at least some marinas and possibly some boat yards. Any time we’ve talked to someone in any kind of authority there or business people, they’ve expressed the view that what you really need there is to get some boatyards in because one of the big problems with cruising in Indonesia is getting a boat repaired if anything happens. You could be 1,000 miles from help, so that basic infrastructure is pretty important.
Apart from that, Thailand is showing its usual promise and Malaysia has been strong. At the moment, it has been a little bit quiet because everyone is feeling a little bit nervous in Malaysia at the moment. There’s still loads of resources there so that could easily spring back again. After all, that was the biggest superyacht market for us in Asia back in the 1990s, long before it developed in the rest of Asia. We did very well in Malaysia for superyachts. All of these markets have their growth potential.
Taiwan started off vigorously, but it has gone a little bit quiet again, but again that obviously has potential. There’s plenty of wealth there. I think the restrictions on boating around Taiwan and limited places to go are some of the factors that limit the development there to some extent. You can look around Asia and each country has its story and that’s the whole point about having regional coverage as we do.
Mike, over the past decade, new dealers have set up office not far from your headquarters and spread their business across multiple markets. Simpson Marine is a clear leader in terms of scale and reach, but do you ever look over your shoulder?
Of course, we have to keep an eye on what other people are doing. You can’t not be aware of it. And, of course, we are aware there are other people out there who would like to knock us off our pedestal, as it were, and some who have declared that they want to try and do what we’ve done by having a regional presence. I think that’s understandable, so what we have to do is to make sure we stay ahead of the game – try to keep one or two steps ahead. It’s inevitable that people will follow – why not. It’s an open market. For sure, people are going to come in and try to do the same thing.
How has Simpson Marine adjusted to life without Azimut Benetti, who you’d represented since 1987, and representing new yards including Sanlorenzo and Monte Carlo Yachts?
It was always Azimut’s intention to have a single-brand dealer and obviously that wasn’t us. On the one hand, we thought it was time to make a leap to become closer to the Beneteau Group. We’ve represented Beneteau since 1986 and Monte Carlo Yachts (created by Beneteau Group in 2008) is a brand I know well. I’ve known [MCY Founder and President] Carla Demaria since her early days with Azimut and she’d been trying for some time to persuade us to take on Monte Carlo Yachts, which we couldn’t do as long as we had Azimut.
On the other hand, was her very good friend, Massimo Perotti, the owner of Sanlorenzo, and he was also very keen for us to represent him out here. They were both Azimut connections from way back in the early days when both Massimo and Carla were with Azimut, so that friendship and that connection has remained and so here we are – we ended up together. It all sort of fitted together quite well.
Of course, along with this, the Chinese investors came on board [in 2015] because they had already made their connection with Sanlorenzo. Two years previously, they had invested in Sanlorenzo and so the whole thing came together. I could see the trend was towards superyachts and here we had the opportunity to represent what I could see as being the rising star among the world’s superyacht builders and at the same time to further cement our relationship with Beneteau Group by taking on Monte Carlo Yachts around the region. All of these opportunities came together at the same time, like happy coincidences.
Are you happy with your first two years representing Sanlorenzo and MCY?
Very happy. We get tremendous support from both shipyards. Sanlorenzo are going on from strength to strength. It’s amazing all the new ideas they had, the new launches they had; they’ve had tremendous success. So, of course, we bask in their reflected glory, even if we are out in Asia. Increasingly Asians do go to Europe, they go to European boat shows, so I think Sanlorenzo’s reputation is spreading around the world. Certainly, they’re already very established in Europe. They’re a big success in the Russian market, now doing very well in the American market and we’ve seen already that we’ve started to make very good inroads into this market, with a number of yachts sold already. I’m sure this is going to be actually quite a good year for us with Sanlorenzo and we’ve got quite a lot of deals in the pipeline.
And Monte Carlo Yachts? You represent them in many markets, but not Hong Kong, Macau and the Philippines.
The only little problem we really had with the changeover was here in Hong Kong, because this had always been one of our strongest markets. Giving up this market was difficult because we didn’t have Monte Carlo Yachts here to replace Azimut, so that was a problem for us, but not so much now that Sanlorenzo are building yachts down to 78ft and some new models are on drawing boards now.
Sundiro Holdings upped their stake in Simpson Marine to 25 percent last December, so what’s the upcoming acquisition schedule?
They will have the majority equity in Simpson Marine next year, so that’s all going ahead. They can see the results are good, they’re very happy with the way things are going and the idea is they will take over the majority equity of Simpson Marine next year. And we’ve got all sorts of ideas for further expansion and it’s all very positive.
Mike, you’ve been selling yachts a long time, so when do you plan to step away and start enjoying this lifestyle you’ve been marketing for so long?
How can you? When your name is attached to it, it’s not so easy just to walk away. I love the business and I don’t really see any reason for walking away when the business is doing well. We’ve got a great team of people right through the company. All that’s really positive. But once the Chinese become the majority shareholders, they’ve told me repeatedly – and it’s written into our investor agreement – that they want me to remain involved.
So, even if I’m less involved, which is what my intention is, I’ll still be sitting on the Board. I think for me to walk away and just leave would never happen, but I do want to take more time off. Certainly, after they become the majority shareholders, the idea is to find a Managing Director who will then take over the day-to-day running of the business and I hope, with the support of Sundiro, take it to new heights. That’s certainly the intention.
I’ll stay in touch and I’ll remain on the board to steer it and make sure that things go the right way, but I intend to go off and do more flying and sailing and other stuff – as you say, the lifestyle I’ve been inspiring other people with all these years! It’s time for me to try it out for myself for a bit.
What boats have you owned?
In terms of my own yacht ownership, I have owned various yachts from 35-51ft: a Peterson 46, CT49, Taswell 49 and a Beneteau Sense 57. I now own a little a Windy 22 speedboat, which I commute with every day. It’s a little diesel-engine speedboat, which has done me very well since the late 1980s.
I lived on a yacht when I arrived in Hong Kong. Then I sold the yacht and moved onto another one, then sold that and moved onto another one, and that did go on for about three years. Then I moved ashore for a little bit, stayed in the penthouse here at the Aberdeen Marina Club for a while, then Happy Valley and finally I moved across to Lamma after about five years into the business.
After that I bought this little Windy, so it must be back in about 1988 or ’89. Even then, it was already quite old because it was a 1970-something vintage. It still goes fine with our service department looking after it – they’ve kept it going all these years. If you’ve got something old, you need to have a good service department to keep it running.
If you had a year to cruise around the world and an unlimited budget, which boat would you choose?
An unlimited budget? That wouldn’t necessarily lead me towards a very big yacht. I think the Lagoon Seventy 7 is a beautiful yacht and I must admit when I stepped aboard that in Cannes, I did think, this could be really nice. I could see myself there, enjoying the lifestyle.
But the only trouble is that I’d probably need a full-time crew of three and I’d think, do I really need that with all the issues? Personally, I like my independence. In my sailing days, I used to skipper my own yacht, maintain it, look after it and so on. That was the joy of it. Simpson Marine has the tagline ‘Yachting Freedom since 1984’ and to me that’s really what yachting should be all about. The point that we make when we say ‘Yachting Freedom’ is that we take care of all those side issues.
That’s fine when you’re working out here, you’ve got a boat out here and you have this network of offices looking after you. This is one of the main advantages we can offer to a buyer: that wherever he goes cruising, we can look after him. But that’s a luxury you can’t necessarily enjoy in other parts of the world and I don’t really want that dependence on shore support, so I’d prefer something smaller.
Something around the 55ft mark is a good size for a sailing monohull because that’s a yacht that you can manage yourself, sail yourself and generally speaking, in terms of maintenance, it’s not too much to look after with yourself and a couple of friends. Maybe up to 60ft. A friend of mine has a 63-footer and that’s a lovely yacht. It would definitely be a Beneteau because I can guarantee they would give me a pretty good price. I suppose I would still wave the flag for Beneteau after all these years working together, so it would be a Beneteau. They’ve come on in leaps and bounds, too. They build beautiful yachts and I’d be very happy to have something around the 55-60ft mark.
I always enjoyed cruising more than racing. I just like the idea. To me, one of the great joys about yachting is the exploration aspect of it – going to new places, exploring new coastlines and that’s always the fun of it.
I’m also looking at flying and that’s one of my ambitions when I have the time. I intend to maybe get an aeroplane out here – that’s why I was in the Philippines recently, with the idea of flying around Asia. That could be quite a nice project to take on, just to fly around. I know the Philippines very well, I’ve flown all over there, but then to fly through Malaysia and up to Thailand and, who knows, beyond there. It would be fun to try it out.
So, you always see yourself as keeping one foot in Asia?
I’d still obviously spend time in the south of France, as I’ve got a place down there. I suppose I had thought of getting a yacht down there, but I have a friend who has got one down there and it’s always ready. It’s a beautiful yacht, so I’d probably go with him and do quite a bit of sailing in the Med and possibly across the Atlantic again. But otherwise I’d like to sail through the Indonesian islands, so I think I’d definitely get a yacht out here just so I could go sailing through the islands for a while. I’d really enjoy that.
