Just to portray the increased costs to us of manufacturers using China as a base, I list below some items I pre ordered in March 2013 with the price ruling at the time and the price from Rails of Sheffield showing now:-
374-611 Farish maroon auto trailer (was £18.66) - now £31.88
371-987 Farish 64xx green late crest (was £59.46) - now £80.71
2D-001-003 Dapol class 33 green with SYP (was £83.95) - now £104.63
I have already cut some half a dozen locos from my pre orders and will continue to look very closely at what I consider to be 'must haves' as opposed to 'would like'. I would imagine if everyone did this, the manufacturers would then bleat about N gauge being an even smaller percentage of the overall model railway market. We're hardly likely to hear any response from Farish/Dapol but I'd be interested to see if Dave Jones has any comment to make @DJM Dave (http://www.ngaugeforum.co.uk/SMFN/index.php?action=profile;u=2882)
Hi,
I think the higher prices are here to stay.
With the recent exchange rate working against the UK£ I personally have seen quotes for products, when converted from US$ or HK$ raise considerably.
Leaving me personally wondering do I raise to keep a profit margin or do I eat the difference to keep the client.
However this is on top of the prices that we must now all have yo get used to, irrespective of whether we have to cut out cloth accordingly.
Wagons and locos are coming out looking better than ever, with finer details and better reliability and paint finishes. We all love them right? I certainly do, but being a European modeller too, I am aware that quality costs. Perhaps we are just catching up with Europe?
Certainly I've thought for a while now that UK N gauge over the last 5 years has been cheaper than they should be.
But.....and here's the rub..... Not only do you have to take into account those that are ,quite rightly, cutting their cloth accordingly but also the simple truth that N gauge is waaaaay smaller ( excuse the pun) in sales and product runs / sustainability than OO gauge.
There is, no matter what anyone else says, a 'plateau' of sales a model will reach before saturation.
Usually it's around 300-500 units per running number/decoration.
Once this happens the model, to all intents and purposes is dead in the water for further sales until the 'soak through' has happened in the market place and demand slowly raises until it's feasible to produce another batch in a new running number or decoration. Usually this signifies loads of cheaper N flooding the market at silly prices as manufacturers hasn't read the runes, and have over ordered.
This is easy to see, just by watching clearance bargains on monthly, or stock still shown in the warehouse 3/4 years after introduction ( especially helpful when you know their production run)
Companies will start to tighten up production numbers if they have any sense, as having stock on the shelf in a warehouse does them and you /I no good whatsoever as money is then tied up until it can be released for other models.
So.... Yes it hurts, but it's with us to stay. You want great products? You want people to be paid a fair wage for making them? Then that's your lot, and ( and I'm sorry if this sounds brutal), we better get used to it!
Cheers
Dave
So will manufacturers move back to Europe? There must come a point , which may not yet have been reached, where the total cost of manufacturing in Europe becomes lower than China. Total cost is of course a hard one to work out. It's not just tooling cost and piece cost. There are time, lack of control of production and logistics costs to name but a few. Also the issue that manufacturers pay for tooling but cannot move it out of China.
I believe the Peco 2251 was manufactured in Europe and this had an rrp of about £130 some years ago. This was a lot more than locos made in China at the time because of the higher cost base. Judging by the way rrps are going we are probably moving closer to total cost of European production getting close to Chinese costs. Prices will be higher but I think time to production and quality control will be much better.
Pontificating from my armchair, it's inevitable that the massive differential in costs would eventually contract, and shifting production elsewhere is suddenly not an option (or an expensive one) due to direct or indirect Chinese control over production. If it's any consolation, prices in Japan have been creeping up too in some segments; Greenmax in particular, which had outsourced entirely to China and which has been plagued by production problems, has effectively reinvented itself as as high-end niche producer (gambling that anyone who wants the models only it produces will be prepared to pay prices which are approaching British levels).
The exception is Kato, who seems to be able to produce quality models on schedule at stable prices, and coincidentally has kept its manufacturing entirely domestic.
Probably worth iterating that Bachmann/Graham Farish are just trading names of Kader Industries, which is based in China. So semantically, it wouldn't be moving back to Europe, it would be moving away from China for those products.
I wrote this in another thread where it attracted no comments.
Perhaps it will here?
Quote from: FourWheelCoach on March 15, 2016, 07:17:08 AM
I was in the Ian Allen book and model shop in Birmingham recently and it struck me that the prices of coaches and particularly wagons are astronomical for what they are: a few screenprinted plastic injection mouldings.
I had a look at a 1971 catalogue for comparison and adjusted prices in line with inflation:
Wagon from £3.30, coaches £10, 0-6-0 loco £81.
Loco price seems comparable and I would say the others strike me.as the sort of.price they ought to be. Granted some of the modern models have much better detail than older ones but manufacturing techniques have improved somewhat over the last forty-five years too.
Note I'm not suggesting Ian Allen are massively more expensive than elsewhere, that's just the shop I happened to be in.
I might add that pad printing gives a better finish than a hand applied decal and a couple of brush strokes of colour on a self coloured moulding but must also be cheaper than paying the bloke with the paintbrush.
I am staggered by the cost of wagons. The cost of the components and raw materials must be negligible and there isn't a lot of labour in assembling a wagon. USA Trains, who make G scale stuff have most things made in China but their old style wagon series is manufactured in the USA. As has been said Graham Farish will have no interest in manufacturing outside of China but maybe Dapol will do at some point. I would be very happy to buy wagons as a fully painted kit - wouldn't take long to snap them together.
Someone has to pay for all those BMWs we see on the news driving around in China. Should we base cheap prices for our hobby on a low standard of living for the people who make our 'toys'? Roger.
Quote from: FourWheelCoach on March 17, 2016, 11:21:03 PM
I wrote this in another thread where it attracted no comments.
Perhaps it will here?
Quote from: FourWheelCoach on March 15, 2016, 07:17:08 AM
I was in the Ian Allen book and model shop in Birmingham recently and it struck me that the prices of coaches and particularly wagons are astronomical for what they are: a few screenprinted plastic injection mouldings.
I had a look at a 1971 catalogue for comparison and adjusted prices in line with inflation:
Wagon from £3.30, coaches £10, 0-6-0 loco £81.
Loco price seems comparable and I would say the others strike me.as the sort of.price they ought to be. Granted some of the modern models have much better detail than older ones but manufacturing techniques have improved somewhat over the last forty-five years too.
Note I'm not suggesting Ian Allen are massively more expensive than elsewhere, that's just the shop I happened to be in.
I might add that pad printing gives a better finish than a hand applied decal and a couple of brush strokes of colour on a self coloured moulding but must also be cheaper than paying the bloke with the paintbrush.
Perhaps if the quality (and prototypical fidelity) of said coaches and wagons now, were comparable to that of 1971, the prices wouldn't have increased so much. Just saying.
Quote from: DJM Dave on March 17, 2016, 10:18:10 PM
Hi,
I think the higher prices are here to stay.
With the recent exchange rate working against the UK£ I personally have seen quotes for products, when converted from US$ or HK$ raise considerably.
Leaving me personally wondering do I raise to keep a profit margin or do I eat the difference to keep the client.
However this is on top of the prices that we must now all have yo get used to, irrespective of whether we have to cut out cloth accordingly.
Wagons and locos are coming out looking better than ever, with finer details and better reliability and paint finishes. We all love them right? I certainly do, but being a European modeller too, I am aware that quality costs. Perhaps we are just catching up with Europe?
Certainly I've thought for a while now that UK N gauge over the last 5 years has been cheaper than they should be.
But.....and here's the rub..... Not only do you have to take into account those that are ,quite rightly, cutting their cloth accordingly but also the simple truth that N gauge is waaaaay smaller ( excuse the pun) in sales and product runs / sustainability than OO gauge.
There is, no matter what anyone else says, a 'plateau' of sales a model will reach before saturation.
Usually it's around 300-500 units per running number/decoration.
Once this happens the model, to all intents and purposes is dead in the water for further sales until the 'soak through' has happened in the market place and demand slowly raises until it's feasible to produce another batch in a new running number or decoration. Usually this signifies loads of cheaper N flooding the market at silly prices as manufacturers hasn't read the runes, and have over ordered.
This is easy to see, just by watching clearance bargains on monthly, or stock still shown in the warehouse 3/4 years after introduction ( especially helpful when you know their production run)
Companies will start to tighten up production numbers if they have any sense, as having stock on the shelf in a warehouse does them and you /I no good whatsoever as money is then tied up until it can be released for other models.
So.... Yes it hurts, but it's with us to stay. You want great products? You want people to be paid a fair wage for making them? Then that's your lot, and ( and I'm sorry if this sounds brutal), we better get used to it!
Cheers
Dave
Agree 100% Just because we can't afford it, doesn't mean we are being ripped off. I think we would do well to remember that.
Irrespective of point of manufacture, my own thoughts are generally along the lines of 'you can't have Fleischmann quality at Triang prices'. It seems a British obsession of price against quality.
Whether we have reached the quality level for UK models is moot point-but it is much higher than when I started in N forty years ago.....
Mind you, Peco still seem to have most of that eras wagons on sale :)
Martyn
Quote from: railsquid on March 17, 2016, 10:55:20 PM
Pontificating from my armchair, it's inevitable that the massive differential in costs would eventually contract, and shifting production elsewhere is suddenly not an option (or an expensive one) due to direct or indirect Chinese control over production. If it's any consolation, prices in Japan have been creeping up too in some segments; Greenmax in particular, which had outsourced entirely to China and which has been plagued by production problems, has effectively reinvented itself as as high-end niche producer (gambling that anyone who wants the models only it produces will be prepared to pay prices which are approaching British levels).
The exception is Kato, who seems to be able to produce quality models on schedule at stable prices, and coincidentally has kept its manufacturing entirely domestic.
Kato is an interesting situation. Most North American manufacture occurs in China, yet Kato exclusively manufactures in Japan is really not that more expensive than the Chinese stuff, but at the same time retains a reputation as being of the highest quality. So what is really happening here?
Webbo
Thanks to Dave for an interesting insight.
I have no issue in paying for quality and, of course, believe anyone should be paid a decent living wage.
However, there seems to be a discrepancy between the pricing of stock from the main 2 players in the UK N gauge market. As an example, I have just paid £127.46 for a Farish Royal Scot yet the pre order price for both the Dapol Schools and Battle of Britain is £116.11. OK, those prices will probably increase before the models are with us, but overall I think Farish are making a meal of the 20% per annum wage rise in China. As an example, the auto trailer has increased 70% since its announcement and it's still not with us yet.
I did comment on this forum last year that I expected prices for larger locos to hit the £200 rrp mark by the end of 2016. I hope this will not be the case but am sure it will happen next year if not.
This will trigger more modellers/collectors to review their purchasing habits and, I'm sure, will shrink the market further.
I'd really rather this thread doesn't go down the route of price v quality as that has been done to death elsewhere. Whether we like it or not, prices are rising consistently regardless of running issues with locos so we're stuck with it. Caveat emptor.
I'm more concerned with how others see the pricing going and how the market will inevitably shrink as a result.
Quote from: Chris m on March 18, 2016, 06:54:37 AM
I am staggered by the cost of wagons. The cost of the components and raw materials must be negligible and there isn't a lot of labour in assembling a wagon. USA Trains, who make G scale stuff have most things made in China but their old style wagon series is manufactured in the USA. As has been said Graham Farish will have no interest in manufacturing outside of China but maybe Dapol will do at some point. I would be very happy to buy wagons as a fully painted kit - wouldn't take long to snap them together.
Plastic might be cheap but tooling costs aren't.
I'm getting to the point where I will have to try very hard to justify expenditure on new locos.
Mostly my stock is either kit or scratch built as there are only 6 pre 1940 SR locos available RTR, (M7, Terrier, N class, T9, 700 and 0395) the forthcoming Dapol Schools will probably be my last RTR purchase, unless someone produces an Arthur or Lord Nelson, although that could be a doubtful purchase as I have 2 Nelsons being hacked from second hand LMS 4-6-0s and half a dozen other 4-6-0s kit bashed. I doubt Union Mills will produce any more ex LSWR locos as not many of the 4-4-0s stayed active for long in BR days.
I think the circumstances are slightly different there, Mike, in that you are not presented with the same volume of 'wants' by the manufacturers as, say, for a transition era modeller which is probably just as well given the way prices are going. You would possibly only have to make the decision once every 3-4 years as opposed to the multiple choices for other era modellers and therefore may decide 'just this once' is OK (or not)
In 1977 an Arnold 4-6-2 DB loco was about the same as it is today and a Minitrix A4 was about £120 - about the same as today.
According to the inflation calculator £120 then is equivalent to £772.67 now.
Without Chinese manufacturing I doubt any of us would be in this hobby and although we grimace at price rises we really should be appreciative of even these increased prices.
At the volumes we all buy there is no hope of manufacturing in Europe at anything like the Chinese prices.
http://www.thisismoney.co.uk/money/bills/article-1633409/Historic-inflation-calculator-value-money-changed-1900.html (http://www.thisismoney.co.uk/money/bills/article-1633409/Historic-inflation-calculator-value-money-changed-1900.html)
A couple of facts here to dispel rumours....
Fleischmann is no longer the quality it was although the price tends to be.
I've now had 7 loco's, all brand new, with faults right out of the box.
Kato is not exclusively made in Japan! (Bet that's surprised you?)
I think that a class 33 and BOB at those prices is undervaluing the model and creating a false expectation of lower prices which we all ( me as a modeller included) want because we really are price conditioned in the UK to buy as cheap as possible, even if it means not supporting our local stockists.
If it weren't for my altruistic approach regarding the upcoming 17,23 and j94 I'd be charging higher nowadays, that's for sure. (Around 25% higher actually) to cope with raised costs in China and the exchange rate.
As for manufacturing coming back to the UK, it's possible. After all some companies have brought tooling back to England, and at least 1 of those has found the skill set isn't here and promptly shipped tooling back to China.
However, for someone to take that plunge you need some great council funding or deals, a nice line of credit for moulding and tampoing machines. Cheap offices joining the factory, a decent alarm system, stock control system, then staff to be trained that are reliable and want to work, and then someone who knows what he or she is doing with the machines.
Add to that the build up period, training, then the amount of rejects and QC and the costs mount.
To give you a great example, a well known ex MD of a model railway company once told me that he needed £100,000.00 of trade sales a month from the UK factory for it to justify itself. (Cover all the above and wages, rates etc).
I'd do it like a shot, but I'd need so much in the way of loans, grants and tax breaks etc it would be......... Problematic!
But it would employ people, and bring manufacturing back to the UK.
As an aside, the slightly delayed Mermaid is out of the tool room and I'm expecting a picture or 3 of it from China today (hopefully). If the pics come I'll be posting to my web site over the weekend.
Cheers
Dave
Quote from: ScottyStitch on March 18, 2016, 08:26:25 AM
Quote from: FourWheelCoach on March 17, 2016, 11:21:03 PM
I wrote this in another thread where it attracted no comments.
Perhaps it will here?
Quote from: FourWheelCoach on March 15, 2016, 07:17:08 AM
I was in the Ian Allen book and model shop in Birmingham recently and it struck me that the prices of coaches and particularly wagons are astronomical for what they are: a few screenprinted plastic injection mouldings.
I had a look at a 1971 catalogue for comparison and adjusted prices in line with inflation:
Wagon from £3.30, coaches £10, 0-6-0 loco £81.
Loco price seems comparable and I would say the others strike me.as the sort of.price they ought to be. Granted some of the modern models have much better detail than older ones but manufacturing techniques have improved somewhat over the last forty-five years too.
Note I'm not suggesting Ian Allen are massively more expensive than elsewhere, that's just the shop I happened to be in.
I might add that pad printing gives a better finish than a hand applied decal and a couple of brush strokes of colour on a self coloured moulding but must also be cheaper than paying the bloke with the paintbrush.
Perhaps if the quality (and prototypical fidelity) of said coaches and wagons now, were comparable to that of 1971, the prices wouldn't have increased so much. Just saying.
That's not been the case with most consumer products though has it?
Quote from: FourWheelCoach on March 18, 2016, 11:58:20 AM
Quote from: ScottyStitch on March 18, 2016, 08:26:25 AM
Quote from: FourWheelCoach on March 17, 2016, 11:21:03 PM
I wrote this in another thread where it attracted no comments.
Perhaps it will here?
Quote from: FourWheelCoach on March 15, 2016, 07:17:08 AM
I was in the Ian Allen book and model shop in Birmingham recently and it struck me that the prices of coaches and particularly wagons are astronomical for what they are: a few screenprinted plastic injection mouldings.
I had a look at a 1971 catalogue for comparison and adjusted prices in line with inflation:
Wagon from £3.30, coaches £10, 0-6-0 loco £81.
Loco price seems comparable and I would say the others strike me.as the sort of.price they ought to be. Granted some of the modern models have much better detail than older ones but manufacturing techniques have improved somewhat over the last forty-five years too.
Note I'm not suggesting Ian Allen are massively more expensive than elsewhere, that's just the shop I happened to be in.
I might add that pad printing gives a better finish than a hand applied decal and a couple of brush strokes of colour on a self coloured moulding but must also be cheaper than paying the bloke with the paintbrush.
Perhaps if the quality (and prototypical fidelity) of said coaches and wagons now, were comparable to that of 1971, the prices wouldn't have increased so much. Just saying.
That's not been the case with most consumer products though has it?
I'm not sure I follow?
All I'm saying is that the quality of product then at those 'low' prices doesn't compare to the quality of product now at the 'high' prices. As far as N-gauge models goes, nothing else. That's all I was suggesting.
Happy modelling
Agreed that the models of today are better but most products have improved immeasurably in the last forty-five years while going down in price rather than up.
I really can't envisage any production coming back to the UK :no:
Having sold a UK product competing with similar automotive products from India and China, the only advantage I could offer customers was quality, order quantities, service, better credit terms etc but could never compete price wise.
Obviously I'd like Dave's class 23 as cheaply as poss but it does concern me he is 'subsidising' these initial models as I have a very rough idea of what he put into the business to start with :uneasy:
I'm going to fly a kite and see what happens
What if the railway modelers of the UK all bought shares in a company formed to manufacture for "many" suppliers in the UK, bit like football fan shareholders. Benefits could be special promotions, discounts etc. With automation I think ongoing costs to make are financially possible its the start up cost that is the big problem.
Thoughts please
About as likely as Scotland winning the World Cup............
How did you know i'm a Scot 8)
Ah kent yer faither........... ;D
If I can't afford the average offering from the manufacturers how am I going to afford to buy shares ??? :no:
Quote from: FourWheelCoach on March 18, 2016, 12:52:29 PM
Agreed that the models of today are better but most products have improved immeasurably in the last forty-five years while going down in price rather than up.
The problem is, British N gauge is far from "most products". If you take TVs for example, in 1971 even a small B&W one would probably have taken a fair bit out of an average monthly wage packet (I'm sure someone can look up the figures), nowadays a small colour flat panel with vastly better functionality will cost maybe a couple of day's income. But TVs are in demand world-wide and can be produced for different markets with relatively minor modifications. On the other hand there are probably only a few thousand people demanding British N gauge coaches, so any production of new models of the higher quality they appear to be demanding is going to entail a much higher proportion of fixed costs in the end price
Quote from: Webbo on March 18, 2016, 09:52:52 AM
Quote from: railsquid on March 17, 2016, 10:55:20 PM
Pontificating from my armchair, it's inevitable that the massive differential in costs would eventually contract, and shifting production elsewhere is suddenly not an option (or an expensive one) due to direct or indirect Chinese control over production. If it's any consolation, prices in Japan have been creeping up too in some segments; Greenmax in particular, which had outsourced entirely to China and which has been plagued by production problems, has effectively reinvented itself as as high-end niche producer (gambling that anyone who wants the models only it produces will be prepared to pay prices which are approaching British levels).
The exception is Kato, who seems to be able to produce quality models on schedule at stable prices, and coincidentally has kept its manufacturing entirely domestic.
Kato is an interesting situation. Most North American manufacture occurs in China, yet Kato exclusively manufactures in Japan is really not that more expensive than the Chinese stuff, but at the same time retains a reputation as being of the highest quality. So what is really happening here?
Quote from: DJM Dave on March 18, 2016, 11:15:33 AM
Kato is not exclusively made in Japan! (Bet that's surprised you?)
Do tell? I've yet to see anything from Kato not stamped "Made in Japan", but like I said, I'm pontificating from my armchair so happy to be corrected.
Quote from: DJM Dave on March 18, 2016, 11:15:33 AM
As for manufacturing coming back to the UK, it's possible. After all some companies have brought tooling back to England, and at least 1 of those has found the skill set isn't here and promptly shipped tooling back to China.
However, for someone to take that plunge you need some great council funding or deals, a nice line of credit for moulding and tampoing machines. Cheap offices joining the factory, a decent alarm system, stock control system, then staff to be trained that are reliable and want to work, and then someone who knows what he or she is doing with the machines.
Add to that the build up period, training, then the amount of rejects and QC and the costs mount.
Funnily enough Japan provides a relatively inexpensive but skilled, motivated and generally trustworthy workforce who are much less likely to jump ship for another job, relatively general low costs (particularly outside Tokyo) and a stable business environment, which presumably provide enough economies of scale for Kato to make it sensible to retain much or all of their production domestically.
Quote from: DJM Dave on March 18, 2016, 11:15:33 AM
Fleischmann is no longer the quality it was although the price tends to be.
I've now had 7 loco's, all brand new, with faults right out of the box.
Same here for my only new (6-digit model number) Fleischmann loco.
Quote from: DJM Dave on March 18, 2016, 11:15:33 AM
because we really are price conditioned in the UK to buy as cheap as possible, even if it means not supporting our local stockists.
This is the manufaturer's fault IMHO; not the consumer. Manufacturers seem to offer much bigger bulk discounts to big buyers - or it seems to be that way for Bachmann at least. Big buyers can then discount more. Having talked to a couple of small retailers, they basically said if they drop 15% price (max Bachmann discount for first 3 months) to match big retailers, they make virtually no money.
I don't see how that's the customer's problem (and it annoys me that folk blame us for that) - they will always be inclined to buy the same product at the most cheap outlet. That situation has been engineered by the manufacturer's trade pricing structures.
Cheers,
Alan
I agree with Alan in that I will support my local trader providing he can get near a major box shifters price allowing for no postage cost. However, rarely does this occur, maybe for the reason Alan has outlined above :hmmm:
The main problem I find with locos etc made in China is........
you buy one ...........
but a couple of hours later you want another :smiley-laughing:
I was at a tank supplier in York last week to get some trianing on their waste water treatment systems so I could be an approved commissioning tech for them and they have all their tanks fabricated in Eastern europe now. Even with shipping they get them cheaper and quicker than they could get made in the UK. I made the comment I'm always sad to see this as I'm still "just" young enough to remember when I remembered byuing in the UK meant something and you were buying quality -these days the first sign of a UK product seems to be the "made in UK" sticker falls off, just before the product fails or the warranty expires. I hate to support out-sourcing but I appreciate times have changed and it's gone that way for a good reason.
I do complain bitterly about the price-hike in N gauge over the last couple of years, particularly because when I did buy the ultra-fine detailed models, half the detail seemd to fall off by itself without me noticing until it was lost. However, after many, many discussions I'm reluctantly accepting it's the way it's going*. I still buy the Peco kits and have a few unpainted Dapol items in my wish list though, I just can't justify the price of allot of stuff now.
I DO however always support my local shops. I would much rather buy less items through my local shop (if poss) or a Uk supplier than buy anything direct from outside the UK now.
*I had one job where we were buying 100Te cranes (>£1M'odd each ) from Norway where they'd shifted pre-fab of parts to Poland and it totally bit them in the ass though. Quality and traceability went totally through the floor. Thats another story though.
So far no one has mentioned Union Mills in this discussion.
I don't know how old Colin Heard is but one day he may decide to hand over the reins
That would provide an opportunity for some one to build on what Colin has created and may be take on board new technologies like 3D printing where there are no tooling Costs to develop new produits.
I would invest 500 pounds in crowdfunding a "new UM" in the hope of getting new locos at a reasonable Price.
Best regards,
Joe
Some helpful comments about the economics of the business.
In Sept 1976, when I changed from OO to N, I bought a new Minitrix Britannia for something less than £15. At that time, the RPI was c 42. It is now c 260. My Dapol Brit in 2011 cost me £90 (a good price at that time) . Not sure what it would cost me now, but I guess a lot more than £15 uprated by inflation. Of course the Dapol model is incomparably superior (setting aside mine still has those silly silver grey wheels). I could apply the same comparison to the first Black 5 I bought in 1978 to the model today - a vastly better model but costing more in real terms. In other words our models have already risen by more than general inflation, and are continuing to do so though the quality of presentation and running has massively improved. There do seem to be some questions over QC and reliability, though I sometimes found in the early days I had to do things like unbind valve gear, or tweak pick ups to make proper contact. Not difficult, but tiresome.
I recognise we have little choice but to pay more per item and many of us buy more selectively - thus reducing the size of the market and no doubt future supply. I have no problem with Chinese workers wanting a share of prosperity. That said if they want western prosperity they must also be prepared to meet western demands for production quality and reliability. I ask myself whether American and mainland European manufacturers suffer the sort of quality and reliability issues we see reported on this Forum for our models. Interesting/sad therefore to see Dave's comment on this thread suggesting that even European quality may now be slipping.
It is of course true that we are heavily (though not totally) dependent on 2 bigger suppliers. Our market is too small for there to be really effective competition. But if quality becomes too low, N gauge modellers do have other choices - notably changing scale or even a different hobby. It less a matter of we biting the hand that feeds us, but suppliers right through the chain accepting that their customer is the hand which feeds them. Too many unhappy customers leads to fewer/no sales and no profits.
Fascinating thread, thanks to all who have contributed. As I write this I notice some parallels with the US TV news is on in the background with talk of how bad it is to be constantly losing manufacturing jobs in the US, how awful it is to have hundreds of billions of dollars in trade deficit with China and how US companies are struggling with exports due to the strength of the dollar. Yet the US economy continues to grow despite all these issues...
From my perspective, the 'value' of a new British N gauge model doesn't come from the place of manufacture, it comes from things like the choice of prototype (including the assessment of commercial viability which has got to be a challenging task), the design of the model (including innovative new features, clever design to minimize tooling and production costs while maximizing reliability etc), in speccing out the most efficient supply chain as well as effectively marketing the model. Interestingly all the value added elements of the process reside in the UK, as do the associated wages, sales revenue, profit and (I hope) taxes...
That leaves manufacturing, most of which has moved to China. Clearly this has lowered cost and improved the quality of N gauge models, but has fallen short on timeliness. However I don't blame the Chinese manufacturers for this, I think it is more to do with small production runs for N gauge models (a production line's nightmare is to constantly stop, re-set for a different product and restart) and a lack of competition. If our UK market was big enough we would have Dapol, Farish and others bringing out competing models which would give more of an impetus to being first to market. Instead models are announced way too early, probably to try to prevent competitors from announcing similar models. The result is that nearly every model is chronically late.
In summary i would like to see more competition in our little market As this would improve timeliness, encourage innovation and even help reduce costs...but recognize that N gauge may not have sufficient scale (sorry about the awful pun!).
So I salute the innovation of the UK N gauge companies and their employees. The UK N gauge market is probably more healthy than it has been since I started in N in the 1970s, in terms of the variety of rtr models offered at least. China is clearly trying to adapt as it becomes a higher cost place to manufacture - how soon before N guage manufacturing shifts to India or the next wave of evolving economies...
A good thread, Thanks to Mick for starting it and to Dave for his insight.
From my point of view, I seem to be reducing the amount of "Must have" purchases, I keep my list in a database and I have had to invent a new category called "reserve" to which I have added at least 10 loco's so far. I have also prioritised purchases, ranked from 1-5. If I manage to get the items in priority 1 I will be happy..
Before the price increases I put stuff on the list and bought them as they were released, Now it is very different with only 6 loco's on the list in priority 1. I doubt I will get any in the "reserve" list unless I win the lottery!
I would hesitate a guess that the market will shrink in size because peoples disposable income is not finite and wages/pensions have got a fair way to go to catch up with the price increases,not just in model railways but in general household bills too.
Cheers
Mark
Quote from: scruff on March 19, 2016, 01:52:22 PM
I would hesitate a guess that the market will shrink in size because peoples disposable income is not finite and wages/pensions have got a fair way to go to catch up with the price increases,not just in model railways but in general household bills too.
Exactly, Mark. Originally the price increases were based on the fact the Chinese government were insisting wages should increase by 20% per year for 5 years. Other costs may rise/fall but let's estimate labour is 40% (I have no idea of the accuracy of this) of the overall cost, then 20% of 40% = 8%.
So how can an auto trailer rise 70% in 3 years?
The manufacturers should realise that UK wages rise/don't rise generally in line with UK inflation i.e. we don't get 8% to help pay for our hobby! Our money goes to paying for all the 'stuff we need to live' that far exceeds inflation.
Quote from: newportnobby on March 19, 2016, 02:39:28 PM
Quote from: scruff on March 19, 2016, 01:52:22 PM
I would hesitate a guess that the market will shrink in size because peoples disposable income is not finite and wages/pensions have got a fair way to go to catch up with the price increases,not just in model railways but in general household bills too.
Exactly, Mark. Originally the price increases were based on the fact the Chinese government were insisting wages should increase by 20% per year for 5 years. Other costs may rise/fall but let's estimate labour is 40% (I have no idea of the accuracy of this) of the overall cost, then 20% of 40% = 8%.
So how can an auto trailer rise 70% in 3 years?
The manufacturers should realise that UK wages rise/don't rise generally in line with UK inflation i.e. we don't get 8% to help pay for our hobby! Our money goes to paying for all the 'stuff we need to live' that far exceeds inflation.
The value of the pound has collapsed so you need more to buy the same.
I just did some quick sums and it looks like a 20% increase for 5 years will cause a labour cost increase of nearly 150% or nearly 2 and a half times their original cost.. i wonder what proportion of the costs are attributable to labour costs..
Wish I got a 20% wage increase....!
Cheers
Mark
Quote from: scruff on March 19, 2016, 03:12:13 PM
I just did some quick sums and it looks like a 20% increase for 5 years will cause a labour cost increase of nearly 150% or nearly 2 and a half times their original cost.. i wonder what proportion of the costs are attributable to labour costs..
Wish I got a 20% wage increase....!
Cheers
Mark
20% on a typical factory worker wage of $300 a month is not a lot!
That means when the 5 years is over they will take home $746... That is quite a big increase in my book..
Cheers
Mark
Quote from: Snowwolflair on March 19, 2016, 03:04:20 PM
The value of the pound has collapsed so you need more to buy the same.
Only a 'recent' occurrence. We've already had 2 or more increases from China.
Don't think i would work in a factory for £2,500 a year. Almost slave labor rates.
Also the RMB has been climbing for +10 years.
Our government even added 5% to VAT .............. it all adds up.
The rule is it costs what it costs, and the real question is can typical modelers afford what it costs.
They did not used to but for many years we have had affordable prices that seem to be going away again.
also remember as China gets too expensive manufacturing will move to Vietnam, Thailand Laos etc.