Where is British outline model railway manufacturing heading?

[The Stationmaster]

Although the impact of Covid 19 is still being felt and is clearly far from over it is interesting to see how things are changing in the model railway manufacturing and commissioning world and perhaps to consider its wider implications.  

 

Among the big boys Hornby is still not turning a profit but working hard to get there but will the competition they face be about to undergo some serious changes.  Firstly we have the emergence of the EFE Rail brand from Bachmann Europe - not necessarily an entirely new kid on the block, especially in terms of the 00 models offered so far, but a brand putting a wider (and new to many) range of models onto far more retailers shelves than saw the similar models reach in the past.  The big point about this range is not so much a lack of novelty  to us of many of its models  but the fact that they will be new to a substantial market that doesn't spend its time on the 'net or even reading model railway magazines and which only knows what it sees and buys at a retailer.  More models chasing a slice of the cake.

 

Now we have the very recent news of somebody moving from Hornby's research and development side to join Accurascale.  They obviously aren't going to pay Paul to sit at home knitting or playing computer games but are getting a serious and well respected addition to their research and development capability.  That can only mean they have some work for his talents and that will eventually mean more models into the marketplace and available through their increasing retailer network as well as available direct.  Again, more models chasing a slice of the cake.

 

The same of course can perhaps be said about Kernow where the team is being strengthened by a full time (or much fuller time) research and development man which will increase KMRC's - finance permitting - ability to bring models to market more quickly.  Once again perhaps more models chasing a slice of the cake?

 

Similarly we know that Rapido look to be heading back to the UK market in one way or another with the creation of a new UK based post.  I doubt they'd be wasting money on having somebody in Britain if they didn't intend to develop and sell models for the British market.   So even more models chasing a slice of the cake?.

 

And of course Rails both independently and in association with the NRM are continuing to bring a seemingly steady stream of new models into the UK market and, through, the NRM link, also worldwide sales of British outline models.  Yes, you've got it,  more models chasing a slice of the cake.

 

All very positive news for the hobby, or at least the r-t-r and collectibles part of it, with all sorts of goodies coming along to tempt us to part with our cash in their direction.  And of course amid all. this the Bachmanns, Heljans and Dapols of this world are also in there looking to get profit out of the British outline model railway market although not always succeeding.   So perhaps the r-t-r buyer will have never had it so good?  But is that really the case or is there more to it?  For a start nobody knows what the coming winter and beyond will do to employment, or taxation, and the extent to which disposable incomes might - or might not - be squeezed.  Will that old adage hold good that model railways tend to do well in times of recession, and does that apply as equally to expensive r-t-r locos as it does to kits or track?  There are some big unanswered questions about all of that coming up in the near future but it is interesting to see - through people appointments alone - that a number of well known firms seem to expressing a degree of confidence in the future of their markets or are so busy with other tasks that they need extra help (which comes to the same thing in the end).

 

So clearly some confidence there, and perhaps there are 'things' underway which are expected to do well in the marketplace and produce profits that justify the growth in manpower?  But where does that leave Hornby - the all things to many different people 'giant' straddling, or trying to straddle, the UK model railway market among its other toy & hobby sectors?    Compared with all it competitors (for our money) Hornby remains relatively large and a  costly concern to run in paybill terms notwithstanding serious efforts under the current regime to reduce costs.  And it is carrying a growing (by its account) value of unsold stock plus its current borrowing costs (although we don't know much, if anything about any borrowing costs being carried by any of those I have mentioned above).  Hornby undoubtedly has several big advantages - starting with its name which will guarantee sales to the casual market and its own followers.  It also has the advantages of not only offering a complete system but of spread across all areas of the model railway market so it can offer a sort of 'cradle to (almost) the grave' buying opportunity for people.  

 

What we don't know - and are never likely to be told of course - is what parts of its model railway market are the most profitable and that might be important if its big earner is the higher price area which is really where many of the smaller newcomers are offering their products because that is where there is most likely to be somebody seeking to take the money from the buyer who Hornby also wants.  Thus far Hornby has maintained its reputation for 'big engines'. (which appeal across its market spectrum) and has managed this year what appears to be a successful marketing and selling theme with its various centenary products.  But can it - or anybody else come to that - always have a suitable theme on hand to boost sales revenue?  And working in a  relatively higher cost environment than most of its competitors can it make sufficient money to turn a nett profit in the first year of each new model it introduces?  All we can, I think, be sure of is that at the higher fidelity, higher price, end  of the market Hornby will continue to face stiff competition in the immediately foreseeable future.  And it won't be alone in that because all the brand names I mentioned previously will be in exactly the same position as Hornby - dependent on getting a profitable slice of a cake that might possibly be shrinking.

 

I've not mentioned the smaller concerns ot those such as Peco offering large range of track and kits as well as specialised non r-t-r small firms and the occasional magazine commissions such as those by 'Model Rail'.  But all of them, right down to those selling wheels or parts, face the same questions about the future shape of the market.  The one advantage many of them could have is that if model railway kit and component etc buying follows it usual course during a depressed economy trips and meals out etc tend to give way to money being spent on things, like hobbies which can be carried on at home.  Provided they have modern means to reach their customers they should be ok although they might lose the impetus (and expense) of attending shows - although I don't doubt that shows are in any case going to have to change and adapt because of Covid and its aftermath.

[Joseph_Pestell]

My only comment on this would be look across the Channel and North Sea. Large numbers of new small producers (commissioners) have thrived there since the last recession and made the historic manufacturers look rather flat-footed.

[The Johnster]

Wow, Mike, and I thought I was long winded!  Some good points raised, all the same.  Hornby are, IMHO, still on the back foot though their recent releases have been much better than previously.  But there are too many older toolings in the range being touted at what seem to be high prices for models redacted years ago.  £30 for an A28/30 can't make up it's mind which Airfix derived auto trailer seems a lot when no improvements have been made.  And they could have been; Hornby have much better bogies than a 1970s Airfix design with the moulded brake blocks clawing uselessly at fresh air available to them.  Comparing them to the superb Collett 7' bogies on my 57' suburbans is very revealing!  

 

Hornby seem to me to be unclear about where they are going, trying to hang on to the train set market 30 years after it was obsolete and allowing themselves to be diverted with Railroad or Steampunk Bassett Lowke.  I am not in a position to say that these are profitable, but Steampunk seems a bit flash in the pan.  The repro Hornby 0 gauge £500 seems utterly pointless to me; surely the market for these is aimed at collectors of originals?  If you compare Bachmann, the main competitor, then you are looking at another producer that has had it's troubles, and is only just getting to grips with a lead time problem that had made it frankly a joke, one that was ceasing to be amusing.  But there seems a lot less solid marketing and less hyperbole, and less experimentation with Steampunk or the like.  I am reasonably certain that Bachmann will still be in the game in 5 years time, but merely hopeful that Hornby will be.  We need Hornby despite my complaints about them and they are trying hard enough to deserve success, but the backers could pull the plug at any time and it is a cruel world out there. 

 

Much of this is my general impression and ill-informed opinion (I suspect Mike's opinion is much less ill-informed, but he can't repeat gossip) and I am not claiming that any of it is certifiable fact, or even certifiable myth.

 

But it does remind me a bit of the late 70s and the 80s, when you had Hornby losing ground to new kids on the block; Airfix, Lima, Mainline.  It did not end well for the new kids, and Hornby weathered the storm, reinforcing it's belief in the trainset market and low fi modelling for at least another decade, and as I say there are plenty of leftovers from those days still in the range.  There are models that can trace their heritage back to the 1955 Jinty, perpetuating all of the faults of that loco, and no sign of them being dropped yet.  Bachmann originated largely with the Mainline range, some of which had made a diversion via Replica, and made steady progress to replace the mechanisms that were giving problems, a program they have completed for some time, and have managed a steady if delayed introduction of new models as well.  Hornby have done similar mechanism updates with the Airfix and Lima stuff they've inherited, with some success in the case of the GW railcar but less so with the 14xx.

 

But, like the late 70s, there are new kids on the block to challenge the silverbacks.  One has already failed, DJM, and this may be due to a personality issue with it's owner, but the box shifters are morphing into commissioners, to the benefit of the likes of Dapol and Accurascale, and are getting nearer to becoming producers themselves all the time as well as distributors of other brands.  My prediction FWIW is that the 'big 3' of these will succeed; Hattons have had a spat with Bachmann and not gone out of business as a result, and now Rails seem to have had a dispute of some sort with Hornby; again, I believe is is the larger firm that will lose out, but can probably afford to write it off.

 

Railway modellers, including those that go into business, tend to be obsessive characters, as shown by our insistence on detail and running the correct stock with the correct locos, something that matters only to us and no-one else.  As a result, those of us who have gone into the commercial side of things tend to be the sort of people who are ambitious, determined, competitive, and risk takers, in other words, entrepreneurs.  Adding obsession to that mix means that there are some quite volatile individuals out there, though most of the time we seem to behave like gentlemen.  Clashes are inevitable and not to be encouraged!  The reason I never went into the business is partly because I reckon I'd have been hopeless at it, but also because I would not have the patience to deal with some of the people involved, and most likely they would not have the patience to deal with me, either...

 

There is a wild card, 3D printing.  It has already made an impact but has not developed the low cost hi-fi printers that it needs us to buy for widespread uptake, the situation where we can print parts to a high quality ourselves at home for about twice the cost of a current printer/scanner/copier, and much of the trade will be selling online CAD plans to feed into our printers to accomplish this.  I can work a 3D printer; you load what you have to and switch it on, go away and have a cup of tea. and look in on it to check how it's doing, but I could not program one to make an object, though I could perhaps scan one and print it; this depends on me having such an object to hand or being able to make a former to scan.  We are not there yet, and if we are not there soon I predict that 3D printing will go the way of all flesh and become as the snows of yesteryear.  But it can produce quality items if you pay for a quality machine; I have some very good figures from Alan at Modelu and coaches running beautifully on Stafford Road/Shapeways bogies.  

[Jeff Smith]

Interesting speculation, presumably informed or based on sound knowledge.  I rarely buy rtr unless it is to alter it in some way, as I get no pleasure from just opening a box.  However as an integral part of the whole model railway business, rtr is vital to everyone involved.

 

As rtr got better and better some foresaw the end of kits, however apparently this has not happened as existing, revised and new kits are readily available.  Every now and then a kit or parts supplier such as Mike Sharman wheels or Mashima motors closes but there seem to be willing people to take over whole businesses or product ranges which is good for my interests.  I do rely on kits and bits, my only scratch built loco still needed a motor and wheels!

[34theletterbetweenB&D]

23 hours ago, The Stationmaster said:

...Yes, you've got it,  more models chasing a slice of the cake...

I regard this as a good thing. Generally more activity = growing market.  I am of the opinion that the retiring cohort that grew up in the 50s, 60s and early 70s when a train set was still an aspirational hobby is providing a steady supply of new customers looking for an indoor hobby: with money to spend if a good choice of appealing product is available. There's still comfortably a decade of these 'potential recruits'  to come, many with final salary scheme pensions, and/or decent nest eggs of one sort or another.

 

The trainset/'complete system' segment, probably rapidly contracting. The message for Hornby is 'adapt fast'. Sell off to the highest bidder whatever is least profitable, use the available production slots for whatever offers maximum margin.

[Nearholmer]

I've wondered before whether there is scope for collaboration in the trade.

 

If makers/commissioners settled to specialise in their own niches, and Hornby decided which niche it wanted to be in, rather than persisting in trying to have a finger in every pie, which my gut says is what will increasingly happen, the "unfilled niche" could be what remains of the "train set all in one box" market, which a joint effort between Peco (set-track), someone like Gaugemaster, and any commissioner or maker of locos and stock, could fill.

 

I think there has been a toe in this water in the form of 0 gauge package deals, but a solid collaboration could create a good offering in 00, ideally under the "flag" of a respected brand name. There are several ways in which it could be structured to present a unified product to the customer and deal with things like warranty claims without sending the customer on a snark hunt.

 

German toy companies seem to do this sort of thing very well, for instance the Playmobil/LGB collaboration that produced the first-generation Playmobil 45mm gauge train sets.

 

 

Edited September 11, 2020 by Nearholmer

[The Johnster]

Problem with that sort of collaborative marketing is that it attracts the attention of the government in the form of the Monopolies and Markets Authority, which is what the Monopolies Commission is calling itself these days.  It might be possible for a supplier like Hatton's (so long as there were no Bachmann components), Rails (so long as there were no Hornby components), Kernow and the like to put together package deals to achieve this, but if manufacturers did it it looks very much like a cartel, straight away.

[Guest WM183]

Frankly as home sizes and disposable incomes continue to shrink I wager more people will enter hobbies that offer a lot of return time for investment. Model railroading is one of those hobbies. I expect to see smaller scales gain more ground, though for the life of me cannot explain the surge in popularity of O gauge by any of the above. Hmm.

 

Regardless I feel confident that rtr stuff in 4mm will come in blue and red boxes for a long time yet. 

[Kris]

I see N gauge becoming even more niche than it is at the moment. Trade support from the main players (Dapol and Bachmann) appears to be be diminishing, something that is only likely to accelerate the process of becoming niche. I can see that O gauge will develop further, particularly for smaller prototypes.  

[Revolution Ben]

 

Hi Kris,

 

My views about the current state of N gauge differs a little.

 

The supply of new Farish models has been erratic, but then Bachmann have struggled to deliver new models in all scales, largely down to difficulties faced by their parent company Kader - hence the creation of side-brand EFE Rail; which launched with both 00 and N models.  As for Dapol, they have just released the HST-P set in N and have Mk3 sleepers on the horizon.

 

In answer to a previous post, Gaugemaster are combining products from diverse manufacturers; for example the Brighton Belle train pack with Kato track and controller: https://www.gaugemasterretail.com/magento/gaugemaster-gm2000101.html

 

N gauge is also supported by the NGS - one of the most proactive scale societies - with its first RTR powered model commission - the Hunslet 0-6-0DH - about to arrive. 

 

 

And N gaugers consistently step up to support subscription/crowdfunding projects like those offered by Revolution.

 

Retailers I have spoken to recently report booming sales and demand - supply is their main issue - and my view is that craft hobbies such as model railways (in all scales) are benefitting as people seek out activities that can be done indoors, and possibly even in isolation.

 

Whether that continues after we return to normality is a different question of course.

 

cheers

 

Ben A.

 

Edited September 12, 2020 by Ben A
Correcting typo

[34theletterbetweenB&D]

5 hours ago, WM183 said:

Frankly as home sizes and disposable incomes continue to shrink ... I expect to see smaller scales gain more ground, though for the life of me cannot explain the surge in popularity of O gauge by any of the above. Hmm.

You are looking at the arithmetic mean of the population as a whole. But there is a significant sector of the population well above that mean point: older, with the money and the space; perhaps sold the house in town, temporarily lived in the 'holiday cottage', then sold that when the home for their retirement was found or constructed.

[andyman7]

Ah, the old crystal ball gazing. Model railways have for the majority of their existence lived on the margins of a niche hobby - most people know or are vaguely aware but many people go through life untouched by any association. In many ways, the classic 'train set for every boy' period looks like a bit of an outlier, a period from 1950 to 1980 where it was a rite of passage but put away with other toys and not pursued as a hobby. I say this to emphasise that the cottage industry/small business approach is far more the established  long term norm than perhaps we like to think - look back to firms such as Hamblings, Anbrico, Exley, LMC, Bassett-Lowke - these were not household brands in the same way that I would argue Bachmann Branchline, Heljan, Accurascale, Kernow etc are not household brands.

 

This means that Hornby as a brand and a company retain a unique association and value in people's minds, and the brand I think will continue whatever happens to the legals structure, assets etc of whoever is using it. In that sense I think it's important to separate any discussion about the present company with the question about the survival of the brand. 

 

In terms of the enthusiast, the sheer range of materials and opportunities is unrivalled compared to the past - whatever specific problems there might be getting a cast chimney for class 'x' of loco as originally built in 19-whatever from a particular cottage industry supplier, the ability to source things is incredible. The continued development of 3D printing and similar technologies mean that for those who want to pursue it, the sky is pretty much the limit.

[Nearholmer]

12 hours ago, The Johnster said:

but if manufacturers did it it looks very much like a cartel, straight away

I really don’t think so.

 

If each party makes/commissions different things, then either one of them ‘Buys in’ from the others and fronts the packaging, or they form a special purpose joint Venture it certainly isn’t a cartel.
 

If you look in the shops near Christmas, packaging of, for instance, posh chocolate and posh alcohol together for sale is quite common.

 

 

[Mike Bellamy]

 

I was in the WHSmiffs reading library this morning and saw that the 2021 'Hobbies' catalogue has just been published - but instead of a model boat or plane on the front cover, it was a Hornby 'Flying Scotsman' !!

 

They have started stocking model railways with products from Hornby, Bachmann, Gaugemaster, Peco and Woodland Scenics. Details here - I'm sure things will be cheaper elsewhere but I assume they are responding to the increased demand during 'lockdown'.

 

https://www.hobbies.co.uk/model-railway

.

[Paddy]

I am surprised train sets continue as the play value is sadly lacking.  In the case of Hornby, it is the same old 0-4-0 in various liveries with a 2 or 3 wagons.  You don’t even get a brake van!  OK, you can go up to the more expensive £100+ train sets but even then it is not exactly exciting.

 

From a toy perspective, the Hornby Battle Zone train sets would seem a good idea but Simon Koehler has indicated in the past that these are poor sellers.

 

One can only assume that someone is buying these sets?  I fear they are opened up, assembled once and then shoved in a cupboard after the loco has done a few laps of the supplied oval.  The recipient then returns to their PlayStation.

 

Kind regards

 

Paddy

 

[Nearholmer]

I tend to agree with most of that.

 

00 train sets are poor toys for the pre-schoolers who might be interested, being far too fiddly; poor toys for the <9yo because they are again too fiddly and are too small to be used in much imaginative play; and, poor toys above that age because, unless parents really guide the scenic angle, too lacking in functionality.

 

Bigger toy trains, and I’m a playmobil fan, work far better for kids.
 

In the case of most kids, only a misguided grandad would buy them a 00 train set.

Edited September 12, 2020 by Nearholmer

[The Johnster]

2 hours ago, Nearholmer said:

I really don’t think so.

 

If each party makes/commissions different things, then either one of them ‘Buys in’ from the others and fronts the packaging, or they form a special purpose joint Venture it certainly isn’t a cartel.
 

If you look in the shops near Christmas, packaging of, for instance, posh chocolate and posh alcohol together for sale is quite common.

 

 

But the packaging and presentation, as well as the pricing, is down to the retailers, in the same my suggested package deals.  

 

I wonder how many basic 'Smokey Joe' type train sets are purchased for the primary function of xmas tree decoration, a circle of track laid around the base of the tree for xmas morning to recreate a 'traditional' scene.  They are then put away with the xmas decorations in the xmas decorations box until next xmas.

[Tricky-CRS]

4 hours ago, Ben A said:

 

In answer to a previous post, Gaugemaster are combining products from diverse manufacturers; for example the Brighton Belle train pack with Kato track and controller: https://www.gaugemasterretail.com/magento/gaugemaster-gm2000101.html

 

cheers

 

Ben A.

 

 

Thank you Ben I had an Idea Gaugemaster have been doing this for quite a few years, seem to remember some sets done with Dapol Loco's and rolling stock. I did however remember the track wrong I thought / assumed Peco but now you mention it I think it was always Kato.

 

Cl.73 springs to mind

GWR class 14 and autocoach set

could be wrong.

[grahame]

Gaugemaster are also about to release a new range of Kestrel 'Super Detailed Building' kits in N gauge (see advert on back cover of the latest Model Rail mag issue) so, hopefully more support and confidence in the N gauge market sector.

 

 

[MAURICE040947]

The Stationmaster asked where British Model Railway Manufacturing was heading.

I personally would hope, like Grahame, for more inroads and support for N Gauge and in the case of Hornby it is the 'last frontier' (if you discount Hornby Minitrix and Arnold). However in all my conversations with SK over many years, I have to conceed that it is unlikely to happen, but never say never.

[Paddy]

2 hours ago, grahame said:

Gaugemaster are also about to release a new range of Kestrel 'Super Detailed Building' kits in N gauge (see advert on back cover of the latest Model Rail mag issue) so, hopefully more support and confidence in the N gauge market sector.

 

 

 

Hi Grahame,

Sounds interesting - do you have a link at all?  I checked GM's website but could not see any mention of these new kits.

 

Kind regards

 

Paddy

 

[Paddy]

Actually, just found...

 

https://www.gaugemasterretail.com/magento/rightlines-article/kestrel-service-station.html

 

Kind regards

 

Paddy

 

[Paddy]

1 hour ago, MAURICE040947 said:

The Stationmaster asked where British Model Railway Manufacturing was heading.

I personally would hope, like Grahame, for more inroads and support for N Gauge and in the case of Hornby it is the 'last frontier' (if you discount Hornby Minitrix and Arnold). However in all my conversations with SK over many years, I have to conceed that it is unlikely to happen, but never say never.

 

Hi Maurice,

 

It would be interesting if Hornby (or under their Hornby Arnold brand) re-entered British N gauge in a significant way.  They certainly have some lovely models in OO that could be shrunk quite effectively.  Mind you, the same argument could be made for Hornby entering O gauge which I thought they might do under Basset Lowke.

 

Creating an N gauge range would be a big investment and there is already significant competition in that market.  Hornby's finances would need to improve to justify such a risk.

 

How about a curve ball - restarting British TT gauge?

 

Kind regards

 

Paddy

 

[johnofwessex]

My oldest sons grandfather made an interesting point that there are a lot fewer 'skilled' people these days - engineers, mechanics etc who might want a hobby that utilises their skills while my brothers who are both into 'General Aviation' - light aircraft say that numbers active in that field are a fraction of previous years.

[MAURICE040947]

Paddy wrote

Creating an N gauge range would be a big investment and there is already significant competition in that market.  Hornby's finances would need to improve to justify such a risk.

It has not stopped them investing in the Arnold brand where there is also a lot of competition see https://www.Hornby.com/uk-en/shop/brands/arnold-n-1-160/page/15.html? and scroll seemingly endlessly and note all the items marked new tooling. Granted in Europe there is a bigger market for N but some new models are very country specific. Interestingly they are mixing scales so called 1/148 scale Oxford Diecast vehicles as loads onto 1/160 scale wagons.

Interesting times!