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Author Topic: The cost of operating in China  (Read 5750 times)

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Offline Newportnobby

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Re: The cost of operating in China
« Reply #15 on: March 18, 2016, 10:43:48 AM »
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)

Offline Snowwolflair

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Re: The cost of operating in China
« Reply #16 on: March 18, 2016, 11:09:54 AM »
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

Offline DJM Dave

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Re: The cost of operating in China
« Reply #17 on: March 18, 2016, 11:15:33 AM »
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





N gauge Model Railway locomotive and rolling stock manufacturer.

Offline FourWheelCoach

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Re: The cost of operating in China
« Reply #18 on: March 18, 2016, 11:58:20 AM »
I wrote this in another thread where it attracted no comments.

Perhaps it will here?

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?

ScottyStitch

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Re: The cost of operating in China
« Reply #19 on: March 18, 2016, 12:20:46 PM »
I wrote this in another thread where it attracted no comments.

Perhaps it will here?

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

Offline FourWheelCoach

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Re: The cost of operating in China
« Reply #20 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.


Offline Newportnobby

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Re: The cost of operating in China
« Reply #21 on: March 18, 2016, 01:21:02 PM »
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:

Offline Snowwolflair

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Re: The cost of operating in China
« Reply #22 on: March 18, 2016, 01:32:31 PM »
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

Offline Agrippa

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Re: The cost of operating in China
« Reply #23 on: March 18, 2016, 01:36:50 PM »
About as likely as Scotland winning the World Cup............
Nothing is certain but death and taxes -Benjamin Franklin

Offline Snowwolflair

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Re: The cost of operating in China
« Reply #24 on: March 18, 2016, 01:38:34 PM »
How did you know i'm a Scot  8)

Offline Agrippa

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Re: The cost of operating in China
« Reply #25 on: March 18, 2016, 01:56:35 PM »
Ah kent yer faither........... ;D
Nothing is certain but death and taxes -Benjamin Franklin

Offline Newportnobby

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Re: The cost of operating in China
« Reply #26 on: March 18, 2016, 01:56:08 PM »
If I can't afford the average offering from the manufacturers how am I going to afford to buy shares ??? :no:

Online railsquid

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Re: The cost of operating in China
« Reply #27 on: March 18, 2016, 02:30:16 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
Takahachikawa - Japanese and other trains

Birmingham Knotmore Street - (ex) GWR mainline through the Midlands

Online railsquid

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Re: The cost of operating in China
« Reply #28 on: March 18, 2016, 02:32:23 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?

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.

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.
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.
Takahachikawa - Japanese and other trains

Birmingham Knotmore Street - (ex) GWR mainline through the Midlands

Offline Dr Al

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Re: The cost of operating in China
« Reply #29 on: March 18, 2016, 02:48:01 PM »
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
Quote from: Roy L S
If Dr Al is online he may be able to provide a more comprehensive answer.

“We have also arranged things so that almost no one understands science and technology. This is a prescription for disaster. We might get away with it for a while, but sooner or later this combustible mixture of ignorance and power is going to blow up in our faces.” – Dr. Carl Sagan

 

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