Back when private equity ruled the markets and leverage was king, Swedish boatbuilder Hallberg-Rassy would have been regarded as a classic case of underutilised capital. Cash-rich, debt-free, with a strong name and an ever-increasing order book, the company's owners should — according to conventional business wisdom — have mortgaged its boatyards, and either ramped up production or cashed in while they had the chance.

Fortunately for fans of its beautifully crafted, mid-range, ocean-going yachts, Hallberg-Rassy did no such thing. And post-credit crunch, as competitors such as Germany's Bavaria Yachtbau — bought by Bain Capital in a €1.3bn leveraged buy-out in 2007 — and France's Groupe Bénéteau — one of the biggest volume producers in Europe — face shutdowns and restructuring, the family-run Swedish firm's conservative approach doesn't look so frumpy after all.

That overstuffed order book, for example, has ensured that the past year has seen a record turnover of around SEK1bn (€99m) for Hallberg-Rassy, at a time when the European boat-buying market — worth €8bn in 2007 — has declined by as much as 50%. Where other boatbuilders expanded to meet soaring demand in the boom years — Bavaria was churning out as many as 10 yachts a day at its peak and order times were down to a month — Hallberg-Rassy stuck to the model that had served it well for nearly seven decades. It made customers wait.

Crucially, the Swedish manufacturer also refused to let its global network of dealers build up stock. Every one of the 170-odd boats it delivers each year has a firm order at the end of it, as well as a one-third deposit — significantly higher than the industry norm of 10% — giving the company a healthy cashflow and minimising cancellations. "A lot of manufacturers don't produce on direct orders but on forecasts," explains managing director Magnus Rassy. "Suddenly you think you will sell more than you really are, and then you have a big stock, it costs lots of money and you have a poor situation." It's a point that manufacturers the world over, not just boatbuilders, have painfully learnt since the start of the economic crisis, as production lines stand idle while inventories have been slashed.

Rassy, the son of company founder Christoph, has been designing and building boats since he was 16. He took over the helm from his father six years ago and, while acknowledging that the current recession is the worst in Hallberg-Rassy's 66-year history, is confident of the firm's ability to weather the current storms. "We are in the fortunate position that we first make the money and then we make the investment," he says. "We have no money loan in the company and we look at things in the very long term."

This freedom from debt has made a recent modest production slowdown a relatively painless process. Rassy admits that further cutbacks are possible at the firm's two west coast bases and might involve more redundancies — staff numbers were recently trimmed by 10% to 245 — but is unfazed by the prospect. "We could reduce capacity much more than we have done without any problems," he says.

The real key to the Hallberg-Rassy's success, though, is the strength of its brand. Regarded as safe, reliable and supremely comfortable, they are the ultimate go-anywhere boats and monotonously top readers' wishlists in surveys by magazines such as Yachting Monthly.

Here again, though, the company has flown in the face of business orthodoxy. Instead of expanding its range — into racing boats, for example — or experimenting with cutting-edge techniques, Hallberg-Rassy has stuck with the formula that made its name. That's not to say that the firm doesn't update its designs — this year has seen new versions of its 31ft (9.4m) and 37ft (11.3m) yachts — but the new models involve subtle variations on a theme, not major makeovers. "There is a continuous development but it's more evolution than revolution," says Rassy. "We don't gamble with new technologies that we're not sure about."

This continuity of design, which means older models don't look dated when new versions are brought out, is one of the reasons for the boats' ability to hold their value. Another is Hallberg-Rassy's minimal spend on marketing, which thus accounts for a tiny fraction of the sale price. Although its yachts make the rounds of all the major boatshows, the company eschews the industry-standard glossy brochures and sexy videos — and when Europe's yachting press went to try out the new 37-footer at Hallberg-Rassy's base on Orust island earlier this year, they all, without exception, had to pay their own way. "Hallberg-Rassy doesn't spend a great deal on marketing because they've built up a reputation over 30 years," says Willie Bewes of Transworld Yachts, Hallberg-Rassy's UK agents. "They don't need to reinvent themselves every week."

What's good for buyers is also good for the company's balance sheet — as is the fact that, unlike many European competitors, Hallberg-Rassy resisted the temptation to slash costs and cut into profit margins in a bid to capture the charter market. Instead, the firm has maintained its high build-quality, and the prices of its boats — from €115,800 (plus tax) for its entry-level 9.4m model to €1.5m for a top-of-the-range 19m yacht — have held steady through the recession. "There are too many boatbuilders hardly earning any money even in the good times, how could they survive in the bad times?" says Rassy. "You have to earn money in good and bad times to survive."

Rassy should know what he's talking about — the firm has never made a loss. And he sees no more need to change his business model in the current downturn than he did in the good times. "We are doing what we are good at, we keep improving all the time and everyone knows what we stand for," he says. "That will be the case yesterday and today and tomorrow."

Has he ever thought of taking the company public? Rassy laughs at the suggestion: "We would only need to do that if we needed more money. We have found a size that is good for us and we are completely self-financed."

As other European boatbuilders founder on the rocks of leverage and over-expansion, this old-fashioned philosophy suddenly looks remarkably like common sense — at any rate, it looks set to keep Hallberg-Rassy on an even keel for many years to come.