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Dapol deferments - Class 50, Class 59, prototype HST, Battle of Britain - due to Brexit increasing tooling and production costs


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The message will come from retail sales figures.

 

Far too early to be talking about their 68 not recovering enough profit to make business sustainable. The limited supplies, certainly of DRS versions have sold like hot cakes.

 

It's all very well people saying we need to accept higher prices, but there is actually a limit to people's disposable income. And it's not just that, it's the value for money concept against other hobbies, latest phones, tablets etc .

 

I'm glad I bought when prices were cheaper. I've certainly cut back , not because I absolutely need to , but because I just don't see the value for money anymore. I think the likes of Dapol and Oxford, and to a limited extent, Hornby , have to be congratulated for keeping prices reasonable . They do seem to recognise there is a limit beyond which the majority of the market just won't pay.

 

I read nothing more into this than Dapols admission that they over promised and that Brexit (or at least the currency fluctuations resulting from that) are causing major uncertainty and therefor a pause until people see how it works out. Honest and sensible in my view. I think people need also to be very careful in sending a message to manufacturers that we are all prepared to write blank cheques to secure the model we want.

But equally, if the N Gauge market is strongly price-sensitive; and Dapol has said as much, their customers (or ex-customers) shouldn't be surprised when (not if) future investment is directed towards more free-spending sectors. If Bachmann start diversifying into O Gauge, too, be very afraid.

 

As for other priorities, regularly keeping up with the latest tech gimmicks will drain ones coffers a lot faster that the couple of grand a year that I will admit ( :angel: !) to spending on model trains. My other main hobby is photography, upon which I tend to spend quite a lot every five or six years and not much in between. I only go for what I judge to be real upgrades that suit my own needs, not what the magazines rave about. 

 

"Value" is subjective; I bought two of my three Hornby "Radials" at nearly full price (the other at an Oxford-ish price s/h from somebody whose prototype interests change with the wind) simply because I judged them to be worth the extra over the Oxford ones. Had I waited, I could have got the first two now for less than the launch price of the Oxford versions. However, I wanted to be certain of getting them and one can never be certain if a particular model will sell out before it gets to the deep discounting stage. My choice; they were models that I really wanted; with something that I was less bothered about, I would have waited.  

 

My wants in new models are generally quite specific and my disposable income is adequate to service them. I had slight a wobble at the price of the Heljan 1366 even with a fairly good discount, but it was a bit of a "division two" desire anyway. I'll not even blink when my two Kernow 'Gate' sets arrive.

 

Random collecting and excessive use of "Rule One" can stretch almost anybody's resources. Develop some focus and the hobby not only remains affordable; but, whatever prototype and era you settle on, your layout will look all the better for it. 

 

John

Edited by Dunsignalling
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I'm amazed.

 

People are telling us ad nauseam what a useless company Dapol are, and even with years to think about it not one of them has seized the opportunity to stump up their own cash and establish their own company to show us all just how it should be done?

 

It's obviously very easy.

Apart from DJM and Revolution trains....

 

(and look at how much negativity this forum displays towards one or both of these......)

 

Les

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I think as customers we need to think about the collective message we want to put across when we post about pricing. It seems to be a simple choice: we come to accept higher prices and get new models or we continue to demand low prices and get no new models at all.

 

Cheers

 

Ben A.

 

I think that is perhaps the biggest dilemma facing manufacturers. On the one hand many customers want more and more detail and individual locomotive specific features and seem willing to pay. Others are finding the price of high end RTR to be too high and want cheaper models or at the very least to stop price inflation. As far as I know Hornby are the one company who decided to respond by cutting detail and features to reduce cost inflation and "design clever" went down like a lead balloon. Personally I thought it was more because of poor execution than economising being an inherently bad idea but that is probably moot as it bombed and Hornby responded by returning to pre-design clever levels of detail. Hornby have also at least offered a choice of a lower cost budget range and their newly tooled Railroad models have often hit a nice sweet spot of offering good if basic models with good mechanisms at reasonable prices. One of the problems with design clever was its blurring of the Railroad and main ranges. None of which is about Dapol other than to agree that customers probably do need to decide what they want, lower cost or ultimate detail. Of course there is no reason why manufacturers can't find their own niche and for customers to be offered a choice, Oxford seem to be going for lower cost models which sacrifice some finery whilst the Dapol black range has gone to the other extreme.

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On the one hand many customers want more and more detail and individual locomotive specific features and seem willing to pay. Others are finding the price of high end RTR to be too high and want cheaper models or at the very least to stop price inflation.

 

Snag is that it not one or the other.

 

Currently we are experiencing a combination of cost-push inflation (with escalating wages, detrimental exchange rates, etc.,) as well as demand-pull inflation (with people wanting better specified models, more details and so on) both effecting prices. It is not a simple matter to stop such overall price inflation without ending up by cutting corners (less QC, poorer quality, reduced detail, inferior mechs, etc.,) and especially without a massive increase in demand (as currently demand appears to be falling according to Dapol).

 

G. 

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If the supply of new items dries up then the market will look elsewhere - OO or O for example.

 

N has always lagged behind OO but recent releases and commissioning have indicated a shift away from multi-scale models even with Bachmann, Kernow are not about to release 02, Well Tanks or Gate Stock in N, there is only Revolution showing any serious development in N and even they are looking at other scales now which is sensible on the one hand but also a diversion away from N.

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I thought I had read somewhere very recently that according to Bachmann the British N range is still growing? I think it may have been David Haarhus in a recent "state of the Nation" address? They certainly appear to remain committed to the scale and continue to  release new products and new innovations albeit at a lower rate than previously (but that of a few years ago was surely never sustainable?). New tool releases also appear roughly in line with their 00 range..

 

I would think it more accurate to say that Dapol have decided on a different strategic direction that favours N less, which is their choice as it is their investors' money being risked. It could be argued that with Richard Webster being involved in Dapol and his O Lionheart range becoming part of their portfolio the shift towards O (which he clearly has experience of) and away from N should come as no surprise. In fact the lack of any new tooling announcements in their N range recently was maybe with hindsight indicative?

 

I think the real complaint is not that Dapol are shifting priorities but that models promised over five years ago are being postponed indefinitely ("canned"?) and these are locos that people have probably pre-ordered and were patiently waiting for, models very likely to have appealed to another manufacturer had there been no declared plan to produce them.

 

For sure, we should never forget the contribution that Dapol have made to the advancement of British N and some very nice models have resulted (who would ever have believed a 22 or Terrier would be available RTR?). The fact that the 68 does not appear to have had the "chop" gives me hope that this is not a total exit from N but a pause, during which (hopefully) we will continue to see further runs of products that have already been tooled...

 

Roy

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Far too early to be talking about their 68 not recovering enough profit to make business sustainable. The limited supplies, certainly of DRS versions have sold like hot cakes

No one is saying the business is not sustainable, only that the evidence suggests that the models are underpriced if Dapol wish to fund the development of new products. The rapid sales of the first tranche of Class 68s, and HIA hoppers before them, with many people commenting how cheap they are, suggests that Dapol could, and probably should, have set the prices higher and therefore increased their profitability.

 

I think the likes of Dapol and Oxford, and to a limited extent, Hornby , have to be congratulated for keeping prices reasonable . They do seem to recognise there is a limit beyond which the majority of the market just won't pay.

I don't know much about Oxford and Hornby, as an N-gauge enthusiast, but the pricing you consider "reasonable" has led to the cancellation (sorry, "abeyance") of at least one model (the 59) I was looking forward to. So for me, the result of their pricing strategy is unreasonable. And what, really, do any of us know about what "the majority" of the market will pay?

 

I think people need also to be very careful in sending a message to manufacturers that we are all prepared to write blank cheques to secure the model we want.

Who said anything about blank cheques? Why inflame a debate by immediately jumping to extremes? Dapol Class 33 locomotives have an RRP of something like £140, and can be bought for £100. I have one and am very happy with it. But if the model was priced £10 higher then that is still a fair amount in my view and maybe would have generated additional cash to enable Dapol to progress the Class 50, 59 or Battle of Britain steam loco. This, to me, would be a more reasonable price.

 

Cheers

 

Ben A.

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If the supply of new items dries up then the market will look elsewhere - OO or O for example.

Maybe if the supply of all items dries up, but by mentioning​ 'new items' that seems to indicate newly launched products and that would assume everyone in the market is only interested in such new developments.

 

However, there are still newcomers and existing customers who would be happy to purchase re-runs of existing products. Dapol have only stated they are shelving the development of new products not that they are withdrawing from the entire N gauge market or will no longer make batches from their existing product range. And then of course there are other manufacturers who may be tempted to step in to any vacuum or take up any slack in supply to meet demand.

 

G.

Edited by grahame
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...there is only Revolution showing any serious development in N and even they are looking at other scales now which is sensible on the one hand but also a diversion away from N.

Hi there,

 

For avoidance of doubt, N remains the priority for Revolution.

 

The upcoming TEA tanker in 00 is not so much a diversion "away" from N as us simply utilising research done for the already-delivered N gauge model to satisfy persuasive lobbying by 00 modellers.

 

Cheers

 

Ben A.

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Maybe if the supply of all items dries up, but by mentioning​ 'new items' that seems to indicate newly launched products and that would assume everyone in the market is only interested in such new developments.

 

However, there are still newcomers and existing customers who would be happy to purchase re-runs of existing products. Dapol have only stated they are shelving the development of new products not that they are withdrawing from the entire N gauge market or will no longer make batches from their existing product range. And then of course there are other manufacturers who may be tempted to step in to any vacuum or take up any slack in supply to meet demand.

 

G.

But if manufacturers stop developing new items then the market stands still and is less attractive as it looks like no-one is investing just wearing out the existing dies.  Dapol pulling back from N is not a good sign although Bachmann investing in sound has been very welcome and could along with Dapol's knuckle couplings have been the two things that might make hard nosed 4mm modellers think again about N.

 

Looks like it is down to Revolution to keep Bachmann on their toes for the time being, at least now the privatisation WCML enthusiast has a realistic prospect of full length trains in a reasonable space.

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Hi there,

 

For avoidance of doubt, N remains the priority for Revolution.

 

The upcoming TEA tanker in 00 is not so much a diversion "away" from N as us simply utilising research done for the already-delivered N gauge model to satisfy persuasive lobbying by 00 modellers.

 

Cheers

 

Ben A.

So, we watch what comes out in N and get stuck into persuasive lobbying then? Good advice. HOA hoppers please, Ben. :D

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But if manufacturers stop developing new items then the market stands still and is less attractive as it looks like no-one is investing just wearing out the existing dies. Dapol pulling back from N is not a good sign although Bachmann investing in sound has been very welcome and could along with Dapol's knuckle couplings have been the two things that might make hard nosed 4mm modellers think again about N.

 

According to the announcement Dapol are only shelving new developments (presumably until they deem the economic conditions are okay for them to be resurrected) rather than exiting N gauge altogether. The N gauge Pacer and class 68 were not mentioned so I guess they are still being developed and will get launched. And then there's still some outstanding wagons and coaches hopefully being worked on.

 

As well as RT to keep Bachmann on their toes there is also Peco, CJM, and Union Mills. Plus the NGS is still developing new RTR (a Hunslet 0-6-0 shunter is currently on the cards) and hopefully Hornby might even see an opportunity​ worth pursuing - after all Arnold/Hornby did give us a rather nice Brighton Belle.

 

The Dapol news is disappointing, but not necessarily catastrophic or terminal for the N gauge market.

 

G.

Edited by grahame
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Should be remembered that Bachmann are still running through the Graham Farish back catalogue updating and or replacing old Poole era and later models and that takes time.

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at least now the privatisation WCML enthusiast has a realistic prospect of full length trains in a reasonable space.

 

 

At the risk of thread drift, this touches on a persistent problem for N Gauge modellers, and in particular modern image modellers. 

 

RevolutioN have gone a long way to allow people to build a modern representation of the WCML once the Pendolino arrives and combined with their (and DJM's) forthcoming 92, Farish's 350 & assorted freight motive power. However, the contemporary South Western Mainline, Midland Mainline, East Coast Mainline, Great Eastern Mainline and much of the railways of the South East are all but impossible to represent in N Gauge at present. Clearly manufacturers have to produce what they believe will sell, but there is practically no cohesiveness to any of the main manufacturers ranges, and I wonder how many potential modellers are put off (and potential profit lost) by the fact they can't fully represent a large majority of the modern railway. 

 

Back on topic, the decision to "delay" the BoB/West Country in particular puzzles me the more I think about it. They are now more or less the missing piece for anyone wanting to model the SWML, they have a significant (for steam) presence on the modern mainline and with 20 in preservation, for a steam class they span a huge period right through to the the present day, so I cannot believe the demand for these models is insufficient to make it profitable for someone to produce. I had 3 on order myself, and although it is a type strongly associated with the subject of my own preservation themed project, currently there are non in service so I can live without them, although I'd be lying if I said I wasn't hugely disappointed with the news after 6 years of waiting. 

 

Tom. 

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If Dapol want to sweat their current assets then they could do a lot worse than opening a dialogue with the N Gauge Society about producing both the GWR K41 BG and the LNER Thompson BG in OO...

Hi there,

 

The NGS Thompson BG was produced by Farish. Dapol could produce the Collett BG in 00. There is no need for a dialogue - the only thing of use to them is the CAD and the livery artwork and as this information is already in the factory there is no realistic way the NGS could prevent them using it, nor would it wish to.

 

Cheers

 

Ben A.

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As a relatively not-committed observer of such matters it seems to me that Dapol are discreetly trying out heading in an O Gauge direction, but not wanting to disconnect with the N market.

 

I rather liked the idea of a decent N gauge class 50 for  having some 80s Devon/Cornwall mainline action in a smallish space, but if, as it appears, it don't happen Ill not lose too much sleep, and re-position the idea in 4mm scale, in a larger space.. Such is life.

 

I do wonder if the overall N market is as big as it first appears to be in sheer numbers of participants?

Or is it powered by a smaller amount of people then one would expect, but who buy a much larger amount of stock per person?

 

The smaller than expected number of Collector/Buyers sustaining the market  would certainly explain why N is so particularly price sensitive, and the oft heard "ask for less detail, if that affects the price point .

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As a relatively not-committed observer of such matters it seems to me that Dapol are discreetly trying out heading in an O Gauge direction, but not wanting to disconnect with the N market.

 

I rather liked the idea of a decent N gauge class 50 for  having some 80s Devon/Cornwall mainline action in a smallish space, but if, as it appears, it don't happen Ill not lose too much sleep, and re-position the idea in 4mm scale, in a larger space.. Such is life.

 

I do wonder if the overall N market is as big as it first appears to be in sheer numbers of participants?

Or is it powered by a smaller amount of people then one would expect, but who buy a much larger amount of stock per person?

 

The smaller than expected number of Collector/Buyers sustaining the market  would certainly explain why N is so particularly price sensitive, and the oft heard "ask for less detail, if that affects the price point .

 

I think your point about collectors is an important one - my feeling is that collectors are much more likely in 4mm scale and 7mm scale, where the detail is easier to see and the models are easier to handle. This leads to multiple sales of the same model by people wanting to collect a set.

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I have said elsewhere, to blame this on brexit is a smoke screen. ......

 

There has been much discussion here about other factors which could also have led to Dapol's descision, all of whch have some validity and logic. It may be more helpful to view them as all being contributory factors, if so it's easy to see that Brexit may just have been the last straw rather than the sole fundamental factor. I'd not be too hasty to dismiss Brexit as a smokescreen particularly given the announcement by Rapido/NRM regarding the prototype HST. There have been items in the news media recently, I'm thinking of the motor industry in particular, where the uncertainty over the shape and terms of Brexit is driving a tentative attitude to forward planning; it's no surprise to see this reflected in our sphere of interest.

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Snag is that it not one or the other.

 

Currently we are experiencing a combination of cost-push inflation (with escalating wages, detrimental exchange rates, etc.,) as well as demand-pull inflation (with people wanting better specified models, more details and so on) both effecting prices. It is not a simple matter to stop such overall price inflation without ending up by cutting corners (less QC, poorer quality, reduced detail, inferior mechs, etc.,) and especially without a massive increase in demand (as currently demand appears to be falling according to Dapol).

 

G. 

The other problem is that, even if a decision were made to simplify future models, it takes time to get them to market.

 

By the time they actually arrived, the other forces at work would ensure the price wasn't drastically lower than the previous generation of detailed models, which themselves, if still available, would probably be being discounted. I can hear the griping already "B is only £15 cheaper than A was and A had this, that and the other that B doesn't" . Design Clever, all over again!

 

The only way to counteract that is the Hornby/Railroad scenario; release new fully detailed, full-price models alongside a budget range and let the customer choose..

 

Are Dapol big enough to do that in N? Is the market large enough to support such a strategy in N? My instinctive answer is "no" to both questions.

 

Dapol have evidently decided that not enough N Gauge buyers are willing to pay the prices necessary to support developing new products in the numbers they had planned. 

 

They are clearly rebalancing their activities in favour of the growing O Gauge scene, but it will also be interesting to see where their "Black Label" foray into premium OO takes them next. If it goes well, I can envisage Dapol making further moves upmarket, which may or may not include Black Label items in N. 

 

Whatever happens, there's little doubt is that developing their N Gauge range will take something of a back seat until they judge they can make an adequate return from it.  

 

John  

Edited by Dunsignalling
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Black Label is an interesting development and the obvious way to justify a significantly higher RRP. Steam effects might be a push in N, but DCC sound, loco lamps and perhaps DCC uncoupling are feasible and would add greatly to perceived value without adding hugely to build cost. I'll be interested to see how well Farish go with the new sound-fitted Castle at a GBP200 price point. 

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Black Label is an interesting development and the obvious way to justify a significantly higher RRP.

 

Yes, sort of. It's not so much about 'justifying' higher RRP but segmenting the market and offering appropriate product to a niche sector where the potential customers want the highest end specification, features and details, and are prepared to pay for it. Offering differing specified products to be attractive across the market at all price points is not a new marketing approach.

 

However, the overall model railway market appears to be technology and feature/detail led with general improvements in products over time. When anyone tries a lower specified product (like 'design clever' and Railroad), often in reaction to a few voices moaning about prices, it gets stamped on making it clear that the majority want the latest, best and most detailed product. There doesn't appear to be much appetite for a basic cheap product, but there is demand for improvements and Black Label just takes that a stage further at the top end.

 

G.

Edited by grahame
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When anyone tries a lower specified product (like 'design clever' and Railroad), often in reaction to a few voices moaning about prices, it gets stamped on making it clear that the majority want the latest, best and most detailed product. There doesn't appear to be much appetite for a basic cheap product, but there is demand for improvements and Black Label just takes that a stage further at the top end.

Part of the problem is that Railroad offerings are only worthwhile when accompanied by a higher specification version to differentiate them. In N Gauge you could argue that the "Railroad" niche is filled by Union Mills and the ex-Poole Farish range. These are robust models with lower levels of detail than the main Dapol and Bach/Far offerings. They are valuable and fill a niche. Union Mills sell well and have a good reputation. Personally I prefer more detailed models, even if they come with a higher price tag and need to be treated a bit more delicately but that is an entirely subjective opinion.

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In N the reality is that the market is just not big enough to justify tooling a basic and detailed model. Leaving off detail saves you a very minimal amount of tooling and potentially a bit more on assembly (though you don't necessarily need separate detail to make something highly detailed).

 

Cheers Mike

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