Ferretti sails into choppy financial waters

Weichai declined to comment.

China has more than 1 million millionaires and 67,000 super-rich with 100 million yuan ($16.11 million) or more, according to the 2014 Hurun Wealth Report, an annual China rich list.

But the number of luxury yachts sold is still low. Only around 0.3 percent of China's wealthy consumers with financial assets of at least $1 million own a yacht, according to a 2011 study by the Italian Trade Commission.

The problem is partly cultural. For Europe's wealthy boat owners, sleek motor yachts conjure images of lazy family holidays along the sun-kissed Mediterranean coast.

Well-off Chinese tend to shun the sun, China's coastline lacks the appeal of southern Europe or Thailand and a boat is seen more as a business asset than a family plaything.

Taking out a client on a yachting trip has also become less socially acceptable since President Xi Jinping ramped up a crackdown on corporate corruption.

"The current mood in China is not about conspicuous spending," Jean-Marc Poullet, the Asia chairman-designate of Burgess, a yacht brokerage, said.

To address some of these issues, Ferretti is building a marina in Zhuhai, in southern Guangdong province, where it plans to set up a plant to develop a new model for the local market by 2018.

A Chinese factory should also help overcome another problem, the country's 43 percent import tax on luxury goods.

Besides the 374 million euros spent on the acquisition, Weichai invested another 80 million euros via a capital increase, the bulk of which will be used to develop 27 new models over three years. The firm's seven brands include Riva, Ferretti Yachts, Pershing and Itama.

Ferretti has nonetheless scaled back its expectations for the Asia-Pacific region to only around 15 percent of global sales, half what it originally forecast, and shelved plans for a Hong Kong listing.

It also declined to disclose sales figures for China.

Local politicians and unions, who clashed with the company in the early days of Weichai's ownership, now welcome the fact that Ferretti was saved by an industrial partner.

But for the company to continue to operate in Italy, known for high labor costs and high taxes, the turnaround has to work.

"There is always the worry that the Chinese could just take our know-how," Luigi Giove, a local union leader, said. "But we should not forget that them coming in was a turning point for a group that was on the brink of collapse."

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