In February, Massimo Perotti, Sanlorenzo’s chairman, appointed Fulvio Dodich as CEO. Dodich is well-versed in the large-yacht and megayacht markets, having held similar positions with Ferretti Yachts and Custom Line starting in the mid-1990s. Equally important, Dodich has experience outside the yachting realm in a variety of industries, giving him broader business insight. In this Leadership Series interview, Dodich discusses why he joined Sanlorenzo, what yacht buyers want these days, and how clients and companies alike need to practice transparency.
Q: What made you become interested in yachting, and what convinced you to enter it from a business perspective?
A: I had the opportunity to meet Norberto Ferretti in 1995. (Editor’s note: Norberto Ferretti is the founder of Ferretti Yachts.) One of my relatives, my brother-in-law, was working with Norberto, and I had a conversation with Norberto and his partner—a general conversation, nothing specific. One week after, my brother-in-law called me and said, ‘What did you say to Norberto?’ It turns out Norberto and his partner were really impressed and wanted me to come in. So I went, and Noberto asked me if I wanted to join Ferretti because there were no dealers, and he thought there was potential. I was coming from industrial work. I had a company with my family, which we had sold, and I was working at the time when I met Norberto for a company producing air-conditioners for big plants, big machinery to produce furniture, and shop-keeping and check-out counters for supermarkets. So I thought, ‘OK, if you like the idea, yes, we can try.’ So I joined the company. The company had eight dealers at that time, €34 million of turnover. One year after, we had 35 dealers, and the turnover was double. I stayed with the company and took on more responsibility through growth and acquisitions. I decided to leave the company in 2007. I still have an excellent friendship with Norberto; it has nothing to do with business.
Q: When you were hired by Sanlorenzo, Massimo Perotti said your experience overseeing the Ferretti brands would help Sanlorenzo particularly in the smaller end of the market. What experience do you feel you bring that Sanlorenzo did not previously have?
A: Probably it’s not one experience, but a combination of several things. First of all, I’m coming from industry, so I have good knowledge that lets me take an industrial approach to the production. Second, I have been part of the process of growing a brand, like Ferretti, and this is essential. I know how I can help a company to grow. I created a network for Ferretti, and this experience can be repeated. I have a lot of knowledge about how a boat can be built not just for one single client, but for one single client and for the market. There is a big difference between building a boat for one client and building a boat for the market that can be perfect also for one single client. These are the skills I have brought to Sanlorenzo, and because I have spoken about it many times with Massimo Perotti, I know that his point of view is exactly this one. I am also rather clever in working with numbers. It’s not only doing the work with the dealer network, with the production, and with the product, but also maintaining control over the essential numbers inside the company.
Q: Sanlorenzo has 14 different models available, ranging from sizes akin to production boats up to megayachts. Are any particular models attracting renewed interest from buyers returning to the market?
A: Yes, there is a big change in many clients. We have a complete range of boats that can more or less satisfy whatever a customer requires, the flying-bridge boats and the megayachts. Also, we also are not manufacturing open boats, because open boats are still a limited quantity of the niche. Several years ago, it was very cool to have fast boats. Now, the trend of the client has changed a lot. Today, it is cooler to say, ‘I have a boat, and you know something, the fuel consumption is very limited.’ So we see more and more the clients are paying a lot of attention to fuel consumption, and this is one of the reasons our semi-displacement boats are more and more successful and the fast boats are more or less not successful on the market. There is an increased demand among clients to have a semi-displacement boat versus a planing boat. This is the reason why we opened the SD line. I think this can be an increasing market for the future. The environmental passion as well as the attention to fuel consumption is still very high. Every day it is a little bit higher than before. I understand that in the United States, this is less important, but in Europe, environmental protection is one of the biggest points. In addition to that, we pay much, much more for fuel than in the United States. It’s the combination of the two.
Q: Some estimates state that Sanlorenzo has more yachts under construction in the 30- to 40-meter range than any other shipyard. While this is positive, some people may wonder if there is a risk of flooding the market, considering buyers are still taking a long time to make decisions. How do you address this concern?
A: During the economic crisis, the big boats still sold. It doesn’t mean the market has not been affected by the crisis. If you look at numbers, the size range that has been more affected in a negative way is up to 70 feet. The people who buy, for instance, at 50 feet are not extremely rich. Yes, they have money, they stay well, but basically it’s more a family budget than anything else. So, when you have a yacht of 30 or 40 meters, you are speaking to people who are extremely rich. They are using the boat not just for vacation, but also to have business onboard. Those who have the capacity to spend 15 million to 20 million euros for a boat have much more money at their disposal, so that also during the hard times, they can afford to buy a boat. We can take an example from another smaller market to make it clear. Sailing yachts are bought by people who love the sea, probably have knowledge about the sea and sailing. Even though they are not extremely expensive, during the crisis the clients said, ‘We’ll wait for a while, because this is spending money. It’s a hobby that I have, a passion that I have, but I must wait for a better moment to buy my small toy.’ The demand has remained rather strong in bigger yachts while it has decreased in smaller yachts. So it’s not really the decision of the shipyard. The decision of the shipyard has been only to follow the market trends. There is no concern.
Q: Sanlorenzo’s “Experienced Yachts” program allows clients to trade in their current yachts, regardless of builder. Why accept brands other than your own?
A: This is important for a shipyard. The moment you are recognized as one of the top players in the market, of course you are maintaining and keeping your own customers, and Sanlorenzo customers are trading in a Sanlorenzo boat. But at the same time, our best clients are our salesmen, because they are speaking to other prospective clients. Those clients are coming from different experiences. Once they are speaking to a Sanlorenzo client and receiving a lot of positive information, the next time they go to buy a boat, they come to Sanlorenzo. We are attracting clients from other brands. It’s very important, because it’s one of the ways that Sanlorenzo can grow, and continue growing in the coming years.
Q: Many people in the yachting industry believe more transparency is needed, so that buyers feel more confident and that there is accountability. Do you agree?
A: It is difficult for a client to make a distinction between one manufacturer and the other. It’s important for the good shipyards—and good shipyards can be big or small—to make clear to the client that they are reliable and making good promises. In times of financial crisis, we see a sort of filtering of the market, where the not-so-good ones have disappeared. Probably we are not at the end of the story there, but the good ones are the only ones that are in a position to survive. The good ones at the end of the story have kept their position, kept the turnover, kept the good people and staff to manufacture the good boats. But I think transparency also depends on the clients. Sometimes the clients are attracted by the price. The suppliers for motoryachts are more or less the same. There are a limited amount of engine manufacturers, a limited amount of manufacturers of generators. So if someone comes out offering too low of a price for a yacht, where is the trick? Because there must be a trick. Sometimes the clients do not think that because the price is too low, they are not getting the quality. In this millennium, everybody is able to get the best price from the manufacturer. So if there is a difference in the price, normally there is a difference in quality. The client should know what type of quality he wants, and go and look at the shipyard—the way they are manufacturing—to see if it is a serious company or if it is not. Because there are some shipyards that are set up like a Hollywood stage, there’s nothing behind it. Or, you look at the advertising, and it’s fine, and you look at the photo of the boat, and it’s fine, but if you go look at the shipyard, it’s a disaster.
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