Grim reality starting to bite the N Gauge market?

[Maurits71]

Bachmann prices are skyrocketing in order to keep up with rising wages and social changes in China and Dapol's ambitious release schedules in N seem to be in tatters, with the long-promised Class 50 possibly being another year off and still no progress on other much-anticipated releases.

So, what's the verdict? Are the days of "You've never had it so good" drawing to a close?

with all respect to all what's writen I think most of it doesn't hit the target.

wages and social changes are not the main issue, for them who know me know that I am quit a bit in China and do lots of business with them.

the problem is not the wages, yes they go up but 50 % of nothing is still nothing and people are still earning per week less then people on benefit here per day.

The problem is more the rising cost of raw materials, cost of shipping and more important the higher margin wholesalers / manufacturers need to cover overheads down to local taxes and to cover the cost ( and ow I say something really naughty and will be shot ) of all those people who are returning products which are not faulty ( and Yes this is a UK mentality ) because they can't be bother to have a little look themselves are accept that sometimes needs to be repaired.

Although I would stress out that we all are supporting doubt able quality because we expect a lot for less. If we all are willing to pay twice the price like you pay for the European brands like Fleischmann, minitrix etc the problems should be almost zero , from experience I never had any issues with FLeischmann or Minitrix but for the price of one loco I can buy three Dapols/ GF's.

anyway I think a difficult and complicated discussion and everybody will have his own thoughts. Personally bring production back to the UK, make the product twice the price and an equal quality as the German ones is fine for me, happy to pay this but I think I am a minority.

( and please don't hit me to hard for sharing my thoughts. )

[Dr Al]

If we all are willing to pay twice the price like you pay for the European brands like Fleischmann, minitrix etc the problems should be almost zero , from experience I never had any issues with FLeischmann or Minitrix but for the price of one loco I can buy three Dapols/ GF's.

I don't agree - throwing money at the problem won't necessarily solve anything.

Reduction of some problems will come from expert design, designing out problems at the drawing board stage. We are seeing this to some level now - e.g. wiper pickups that caused problems on some Farish stock are being designed out of the equation these days. However, while there are plenty of improvements in this way, there have been plenty of design horrors (*thinks Dapol B1 drivetrain*) and poor choices too, which is partly why we have problems still.

IMHO these mechanisms are very simple in the grand scheme of things - it should be possible to get it right at the current price point IMHO.

QC is the other side of the coin that is the cause of many problems. Again some of the problems that might result can be designed out (e.g. Dapol's square end axles to negate any possible wheel quartering issues - Farish would do well to adopt similar)).

Personally I think the "I'll pay more for x, y, z to be better" is all very well in theory, but may ultimately cut sales in the long run, and put new people off joining the hobby.

And that's very important IMHO.

Cheers,
Alan

[EtchedPixels]

really naughty and will be shot ) of all those people who are returning products which are not faulty ( and Yes this is a UK mentality ) because they can't be bother to have a little look themselves are accept that sometimes needs to be repaired.

Its not quite "of nothing". Average Chinese manufacturing wages are now about $US2.20/hr but you need to add various benefits on top of it.  Government policy is that the minimum wage should rise about 14% a year. Real wages are rising much more sharply. It's still not a lot.

On one specific point I disagree. If it needs repairing its faulty. It's also essential that this gets sorted because right now the world of model railways for the young is becoming known for

"buy trainset for christmas"
"doesn't work"
"tears"
"returned"
"tell friends never to buy a train set"

And yes - fixing it probably needs slightly higher prices on locomotives, as well as much smarter design. Doing more stuff in the UK would also help because it changes the business model from "sign off, pray, wait six months, ship regardless" to one that is actively managed and where learning from one product is available in time to improve the next and even re-runs.

If you've ever reassembled a Kato loco compared to a UK one it's obvious just how much extra design thinking has gone into the Kato model. It all just slots together, it can't be put together wrongly without real effort, there is almost no soldering and what there is has been machine soldered and there are very few delicate bits that can be misaligned or damaged during assembly.

Alan

[simonprelude]

I'd like to see (as the government says) in real terms what would the price of a Minitrix A4 be nowadays. I'm sure they were nearly £100 back in the early to mid 80's.

[EtchedPixels]

£100 in 1985 is £256.86 today using the official inflation data

You really need to look at disposable income as well which is a good deal more complicated, especially when you compare a time that far back with the modern south east where house price insanity distorts everything massively.

Alan

[Bmthtrains]

Surely costs are all relative - my first n gauge loco I think was the then new Farish 91 and it cost about £60. My latest purchase was the Farish 70 at £100. Over a 20 year timespan, an increase of 66%, but the quality is barely comparable to the 91.

Average wages during the same period went up by about the same at 60% too, so it costs the same proportion of my earnings now as it did then.

Given house prices rose over 300% with little in the same jump of quality or standards, I think locos are still excellent value for what you get.

David

[trkilliman]

You will always have people who are in a position to throw money at their hobby. Most of us have to consider the mandatory bills in the first place...and hopefully be able to spend a little on our hobby/s. I once read that it was costing £17 to produce an N gauge Manor loco? We all know the cost of these to U.K. buyers, so is there a mass of other payments to be made that result in the price we pay?   Are the profit margins so generous that box shifters can knock so much off of the RRP? 

When making comparisons to the 60s-80s I think you need to consider the extras most of us pay for these days...mobile phones, Sky t.v , internet.  Add to this that privatisation has lead to our energy, water/ sewerage and public transport bills rising substantially. Not trying to score a political point here, just stating the facts.                There is a limit to what disposable income people have with their mandatory outgoings at the current time.

If the cost of Chinese produced items continues to rise then I'm sure we will see a return to manufacturing in the U.K.  If production costs are more here then maybe manufacturers will need to re-visit their profit margins to keep price increases to a minimum. As I said at the start there will always be some who can spend without a second though, but these have to be far far outnumbered by the people who spend as and when they can. If items become too expensive, wherever they are produced, it will deter many from spending as frequently as they do now.                  In a nutshell if prices increase too much and too quickly I think the market will shrink. People will still buy, but less frequently. Just my two penny worth guys.

[EtchedPixels]

Average wages during the same period went up by about the same at 60% too, so it costs the same proportion of my earnings now as it did then.

Given house prices rose over 300% with little in the same jump of quality or standards, I think locos are still excellent value for what you get.

Its a very hard comparison to make as it depends who you are and what you do. If you are a lower end income worker in the south east then not only have house prices gone up 300% but that salary now gets swallowed by mortage payments, petrol, energy, (increasingly also on university loans) etc to the point you have far less than you did then so the loco is very expensive. OTOH if you are relatively well paid and live in the many of the cheaper areas of the country your perception is likely to be very different.

There isn't a UK wide or general number. In real terms poor people (especially in the south east) and the well paid have had quite different experiences over the time.

Alan

[trkilliman]

Some very interesting comments.

What I will say is that a heck of a lot who have lost their jobs have found part-time employment the only option available to them. The increase in part time employment, and pro-rata loss of earnings, has resulted in a loss of spending power across the retail sector. Hence the number of shops closing their doors for the final time.
The only ones who are not being hit heavily are supermarkets...'cause we all need to eat!

[macwales]

Hi

An interesting thread. Prices seem to have risen by about 20% over the last three years. Well above inflation. Whatever the reason this is a big problem for the hobby.

In the same time the model detail has not changed all that much but it seems that Manufacturers are doing more to get their models prototype typical.

N gauge suffers from chronic shortages of product and both mainstream manufacturers get away with build, running  and reliability faults that would be completely unacceptable in almost any other product.

Of course exchanges, guarantee repairs and bad publicity degrades the market and shortages of promised goods not on the market at the important time of Christmas will result in much of that available revenue being lost to the industry as other presents will be bought with it.

All this, and those rising prices, even if it is increasing retailers margins, must make them despair.

I will not buy a 2014 N gauge model at £160 just like I did not buy that last Peco model as I judged it too much to pay. I am in  the happy position to afford these prices but I will not pay them as I feel that they are rip off prices from an industry that either cannot get its QC right, or just pretends to love its customers or is just downright inefficient - or all three at once!

If I could be sure my next purchase will be 100% perfect as it should be for a premium quality product then things might be different but I do not hold out much hope.

The 2014 prices hikes,  and the poor quality, risk killing off the N Gauge market from any growth leaving only us  few enthusiasts, and we are just a few. Without more, the writing may well be on the wall.

With ever more price rises I will be reducing my purchases and concentrating, while dexterity permits, to keep my existing fleet running.

What a sorry state !!

Cheers

Mac

[PostModN66]

If prices rose to ~£200 per loco, it would still be good value IMHO - even though it would seem steep having had it so good for quite a while.

I think if they rose to that it'd seriously affect the number of new people joining the hobby (which to me is the majorly important thing in the slightly longer term) - you'd be talking over £300 probably for a simple train set including such a loco, which I think would make many walk straight on past...

Cheers,
Alan

Quite possibly - although I would reflect that may people have massive loco fleets, compared to the size of their layouts.  Maybe we could just buy half the number of locos and still get most of the fun.

Cheers  Jon 

[trkilliman]

I look at ebay most days. It's my opinion that across the board the number of good quality items has decreased over the last Year. There's plenty of bits, oddments, and non-working locos though. I reckon more people are hanging on to what they have for a number of reasons. One could be that many of us are not too confident of the future, so are reluctant to sale things on. It's not so easy to afford a new loco if all you can get for work is e.g 24 hours per week on minimum wage.

We see a lot of  brand new items being sold at considerably less than when first launched. Is this indicative of products not selling and/or peoples spending power being curbed?

The next couple of Years will be interesting.

[gc4946]

At one time I was considering buying Farish's BR Blue Tornado but won't now, simply because I don't have so much money available for a loco that doesn't fit in with my plans.

However I can see more demand in the used market and I've spent far more on that sort of stuff than on newly-released models.
I'm already prepared for a contraction in spending power, due to rising costs of essentials like food and energy, buying only good quality used models with a proven track record (e.g. Minitrix) or stuff that can be easily serviceable over the long term (e.g. older Farish)

The other main point is that there's far less production slots available in the Far East now for model train manufacture and those available are given to models that give the best profit margins to the companies so production will increasingly become in dribs and drabs.
At some stage down the line there could be the situation where production of a specific model will be limited to how many pre-orders are arranged.

[joe cassidy]

If you flick through the pages of the latest issue of "Railway Modeller" it's hard to believe there's a lack of money for model railways - I've never seen so many adverts for locos in the "larger scales" at £1000 +.

However, as EP pointed out, there are vast differences in purchasing power between different railway modellers.

I suspect that N gauge modellers are suffering more from the current difficulties than modellers in other scales.

Why would you model in N gauge if you lived in a mansion with a spare ballroom for the layout, or had a vast garden where you could model a main line with live steam pacifics ?

Best regards,


Joe

[MikeDunn]

Why would you model in N gauge if you lived in a mansion with a spare ballroom for the layout,

So you could be accurate on the layout ?     Mind ... just think how big it would be, built into a ballroom !  Impressive 

or had a vast garden where you could model a main line with live steam pacifics ?

Ah - now there ya got me     Oh, the joys of having a fleet of garden LNER Pacifics !!!     If it weren't for winter, why bother with anything else ?  (other steam fans, please insert your preferred Company if it's not LNER  )

Mike