Hornby 2015 Announcements now made

[jjb1970]

The real hurt with pricing is not so much the higher SRP but the fact that the Hornby SRP now has some meaning. At one time the SRP was an abstration that only existed on the Hornby web site or in their price lists and modellers took it as a given the bigger retailers would sell the things at 25 - 33% below the SRP. Now with the new Hornby terms the discount is pretty much gone and the SRP actually has some meaning in the real world unless the release bombs and it appears in bargain basement clearances down the line. As a model the Hornby 08 is an excellent model, whether it is worth the price is a value judgement for the individual.

[Removed a/c]

I know some will disagree but in my mind an HST is like buying a 108, 150, 101 etc.....the new 150 release is a stunner full of detail and a hell of a lot cheaper that an HST. Plus no additional coaches to buy (don't get me started on that !) For my layout I need HSTs but I don't think we should be soaked because they are popular !! I can buy two motorised units from more than one manufacturer for the same price of an HST set. 

[Fenman]

I know some will disagree but in my mind an HST is like buying a 108, 150, 101 etc.....the new 150 release is a stunner full of detail and a hell of a lot cheaper that an HST. Plus no additional coaches to buy (don't get me started on that !) For my layout I need HSTs but I don't think we should be soaked because they are popular !! I can buy two motorised units from more than one manufacturer for the same price of an HST set. 

 

We're at that time of year again, when Hornby has released its 2015 prices but Bachmann has not. At this time of year, people traditionally compare the new Hornby prices unfavourably with the old Bachmann prices, and many argue that this is proof that Hornby is "profiteering" (quite how that is possible when neither Hornby nor Bachmann are currently making any profit is never explained).

 

The HSTs were produced at the high point of the market for hand-assembly, when it looked like Chinese low-cost skilled labour would go on forever. The HSTs are clearly expensive to produce. They cost what they do. There's only one manufacturer in town, so your choice is either to pay for them or to change your layout so you don't "need" them.

 

I'd rather like a fleet of HSTs, but I won't be getting one.

 

Paul

[Legend]

Or buy second hand. I've got a nice Lima IC power car that does me very nicely!

[Derekstuart]

Neither Hornby nor Bachmann are making any profit?

Like the market trader who swears he's given you his lowest price as he is already making a loss on every single item he sells?

Their business model is now fundamentally flawed in my opinion (with my company director hat on rather than modeler). They have effectively just become middle-men for factories in China and have totally lost control over production. Quantities, delivery schedules- the whole lot has gone. The Chinese business model has been one of great foresight- 1. make everything extremely cheap 2. encourage British (or European) factories to close (sell land for house building) 3. Disband workforce in GB that is capable of operating such factory. 4. Once British based company is committed to only buying Chinese- massively increase your costs, slow your production time and THE IMPORTANT BIT: HAVE MANUFACTURERS ***BID*** FOR PRODUCTION SLOTS. If company A is prepared to pay more than company B- then company B doesn't get its models made.

 

Ask this question- although China as a whole is seeing an increase in wages (a significant percentage of costs), it is not enough to account for the massive inflation in costs to you and I. Retailers are certainly not getting a higher margin... and if the suppliers aren't making profit- THEN WHO IS????

This was all so clearly obvious when production started heading to China en-masse in the 90's. But would anyone in power (politicians or large companies0 listen? Bulleid's would they.

 

 

We're at that time of year again, when Hornby has released its 2015 prices but Bachmann has not. At this time of year, people traditionally compare the new Hornby prices unfavourably with the old Bachmann prices, and many argue that this is proof that Hornby is "profiteering" (quite how that is possible when neither Hornby nor Bachmann are currently making any profit is never explained).

 

The HSTs were produced at the high point of the market for hand-assembly, when it looked like Chinese low-cost skilled labour would go on forever. The HSTs are clearly expensive to produce. They cost what they do. There's only one manufacturer in town, so your choice is either to pay for them or to change your layout so you don't "need" them.

 

I'd rather like a fleet of HSTs, but I won't be getting one.

 

Paul

[Derekstuart]

Legend,

 

I would agree with that in many ways (re using old Lima stuff). I have some "new-ish" Bachmann/ Hornby releases, but just bought a Lima 31 2nd hand on the recommendation of several people here and looking at it, it's nothing that a re-motor wouldn't cure.

 

And it got me back looking at 47's (and without opening up old debates that have been done to the death) *I* (that is my opinion and not saying it should be others) think the Lima 47 captures the look far better than any of the others. Even with a Craftsman or Shawplan kit, it's still less than half the price and I can say "I made that" rather than "I opened that box"


(I know the above is likely to prove contraversial with the few "Everyone is entitled to an opinion as long as it agrees with mine" people on this thread, so I reiterate that is MY choice and not forcing it on others)

[Fenman]

Neither Hornby nor Bachmann are making any profit?

 

Like the market trader who swears he's given you his lowest price as he is already making a loss on every single item he sells?

 

Their business model is now fundamentally flawed in my opinion (with my company director hat on rather than modeler). They have effectively just become middle-men for factories in China and have totally lost control over production. Quantities, delivery schedules- the whole lot has gone. The Chinese business model has been one of great foresight- 1. make everything extremely cheap 2. encourage British (or European) factories to close (sell land for house building) 3. Disband workforce in GB that is capable of operating such factory. 4. Once British based company is committed to only buying Chinese- massively increase your costs, slow your production time and THE IMPORTANT BIT: HAVE MANUFACTURERS ***BID*** FOR PRODUCTION SLOTS. If company A is prepared to pay more than company B- then company B doesn't get its models made.

 

Ask this question- although China as a whole is seeing an increase in wages (a significant percentage of costs), it is not enough to account for the massive inflation in costs to you and I. Retailers are certainly not getting a higher margin... and if the suppliers aren't making profit- THEN WHO IS????

 

This was all so clearly obvious when production started heading to China en-masse in the 90's. But would anyone in power (politicians or large companies0 listen? Bulleid's would they.

 

You may be right, that their business model is fundamentally flawed. I would actually consider parts of it to be short-sighted (and Hornby's strategy of putting all its eggs into a single manufacturing basket was obviously flawed, even before that factory was bought by its main competitor's holding company).

 

The alternative implied by your post (keep manufacturing in the UK) was, according to all the data we have seen (and Jason Schron has been particularly helpful with data for Rapido) utterly unsustainable - the price rises would have made current Hornby prices look modest while the quality would have been very much poorer.

 

If they didn't go to China, what should Hornby and Bachmann have done?

 

Paul

[Unknown Warrior]

You may be right, that their business model is fundamentally flawed. I would actually consider parts of it to be short-sighted (and Hornby's strategy of putting all its eggs into a single manufacturing basket was obviously flawed, even before that factory was bought by its main competitor's holding company).

 

If they didn't go to China, what should Hornby and Bachmann have done?

 

Paul

Bachmann is owned by a Chinese company: Kader and have never been manufactured in the UK.

[Derekstuart]

Hi Paul

 

There is an argument to support that viewpoint (that UK manufacturing is unsustainable). However, that assumes that the disparity of production costs stayed the same as they were previously.

For example, when I was last in this hobby 1990s- £35 would buy you a top link model. I can see how that would not be sustainable in 2014 UK production prices. However, Hornby (and our Italian friends at Lima) were making profit back then. Then in the quest for MORE profit they went to China where they could probably DOUBLE their profit margin for the same retail price.

Now here's the interesting bit- much is made of the new drive trains. 6 powered axle diesels.... go look at motor costs and you will see that a modern high precision motor is cheaper than a fairly poor design was in 1990s (inflation adjusted). So I would not say that the new motors account for the extra £100.

So WHY can they not make profit now at £135 when they could previously at £35? Something must have changed.

To get back to your valid point- in a nutshell, IS the production cost so much cheaper in China now? I suspect not. For a company with production facilities HERE thinking of MOVING to China- yes. For a company that's already destroyed its facilities here, NO.... Think back to British Leyland when they sold off their R&D plants...

One other observation of course is that retailers have complained that they cannot get the stock- limited supply. If you don't sell it, you can't make profit on it.

 

You may be right, that their business model is fundamentally flawed. I would actually consider parts of it to be short-sighted (and Hornby's strategy of putting all its eggs into a single manufacturing basket was obviously flawed, even before that factory was bought by its main competitor's holding company).

 

The alternative implied by your post (keep manufacturing in the UK) was, according to all the data we have seen (and Jason Schron has been particularly helpful with data for Rapido) utterly unsustainable - the price rises would have made current Hornby prices look modest while the quality would have been very much poorer.

 

If they didn't go to China, what should Hornby and Bachmann have done?

 

Paul

[jonathan452]

I'll tell you one reason why I'm 'defending' it (apart from the obvious - to me at any rate - commercial situation regarding it for Hornby) is the very simple fact that in recent years I have seen more of graffiti'd maroon livery Mk1s than I have of any other vehicles plastered in graffiti with the exception of some freight vehicles.  Some on here have condemned it because there isn't such thing out there - well there is (or was) and I have seen such things so they do, or did, exist as part of the modern railway scene whatever various naysayers might have to say.

 

To be quite honest I can't recall seeing any coaches in blue & grey livery - graffiti'd or otherwise - for quite some time although there might well be some lurking in a siding somewhere for all I know.  But at the end of the day if anyone thinks this is aimed at the 'modeller' market I reckon they've probably got an unusual view of that market.  If modellers want graffiti'd coaches or wagons they get out their paints and brushes or airguns and duly paint something which fits into the era they are modelling.  So I really can't see why on a forum which is aimed at modellers there should be such a fuss about this coach - as I've already said it will either sell or it won't  - and the modeller part of Hornby's market probably won't make a  ha'porth of difference to that one way or the other.

o.k. - lets hope they use the (newly tooled) Commonwealth bogies which have yet to make an appearence on the new Mk1's rather than the BR1 type used exclusively to date.

[Derekstuart]

Bachmann is owned by a Chinese company: Kader and have never been manufactured in the UK.

 

We were talking about Hornby in a Hornby thread though... Paul's observation that Hornby depend upon production slots in a factory owned by the same group that owns Bachmann is completely relevant though.

[Andy Hayter]

Derakstuart

Unless I missed something in the last couple of weeks, Hornby have not been producing in any Kader (Bachmann) factories since March this year - although there may have been some backlog of items drifting through the Kader system. 

[Horsetan]

....The Chinese business model has been one of great foresight.....

Chou En-Lai, the Communist Chinese Premier, was once asked about the impact of the French Revolution. He said he thought it was too early to say....

[Andy Hayter]

Hi Paul

 

There is an argument to support that viewpoint (that UK manufacturing is unsustainable). However, that assumes that the disparity of production costs stayed the same as they were previously.

 

True the gap - which was enormous - is closing.  But it is still there and is likely to still be there in 2019 after the 5 year 20% year on year increase in Chinese labour costs announced at the start of this year.

 

For example, when I was last in this hobby 1990s- £35 would buy you a top link model. I can see how that would not be sustainable in 2014 UK production prices. However, Hornby (and our Italian friends at Lima) were making profit back then. Then in the quest for MORE profit they went to China where they could probably DOUBLE their profit margin for the same retail price.

 

Now here's the interesting bit- much is made of the new drive trains. 6 powered axle diesels.... go look at motor costs and you will see that a modern high precision motor is cheaper than a fairly poor design was in 1990s (inflation adjusted). So I would not say that the new motors account for the extra £100.

 

So WHY can they not make profit now at £135 when they could previously at £35? Something must have changed.

 

Yes absolutely - many things have changed

1.  Chinese labour costs have been increasing over all of that period.  I estimate that the current plan of doubling wage rates over 5 years announced early this year, has in fact been going on for the last 20 years.  Back in the 1990s this had little impact because3 double SFA was still SFA.  Now it is double 3$/hr and that starts to become something we can relate to.

2.  Raw material costs.  I cannot give you anything on metal prices, but oil - which drives the cost of the plastics used to mould a lot of the parts of our models was at an level of around $20/barrel and at one stage was down to $10/barrel (you don' say when in the 1990s you are referring to) and until June this year was  riding at or above $110 for the last couple of years.  It has now taken a plunge and this should feed through into future prices, but will be somewhat overshadowed by labour cost.

3.  Metal costs have also escalated, although I cannot give chapter and verse on the precise metals and price movements for those used in our models - my business background was petrochemicals and plastics.

 

To get back to your valid point- in a nutshell, IS the production cost so much cheaper in China now? I suspect not. For a company with production facilities HERE thinking of MOVING to China- yes. For a company that's already destroyed its facilities here, NO.... Think back to British Leyland when they sold off their R&D plants...

 

Did you get that the wrong way round?  I see  it as being exactly the other way round.  A company with manufacturing based in Europe looking to China is unlikely to move because of the cost of moving and the development of costs in China going forward.  A company already based in China has to consider the cost of a move back to Europe and may well consider that these costs do not yet warrant a move back *.  However I would be the first to admit that some (perhaps forward thinking) companies are making just such moves.

One other observation of course is that retailers have complained that they cannot get the stock- limited supply. If you don't sell it, you can't make profit on it.

 

Applies to the retailer and also to the producer - another reason why the producers have not been making profits of late.

 

 

 

 

*  To explain this point, look at the impact on Hornby of moving their production from Sanda Kan to other Chinese facilities. 

It has taken 5 years, during which supply has been at best uncertain.  Quality (to us as customers) has been at time iffy - and I could well guess that several (perhaps many) items have been bounced before they reached the assembly rooms.  The cost of these internal moves within China will have cost Hornby dear - both n terms of real cost as ell as reputation.

[Budgie]

Isn't it time they moved production somewhere else? Viet-nam, Malaysia, India spring to mind. Get in there first, before the competition finds it has to move to stay profitable.

[newbryford]

Isn't it time they moved production somewhere else? Viet-nam, Malaysia, India spring to mind. Get in there first, before the competition finds it has to move to stay profitable.

 

 I believe that one of Hornby's brands - Airfix - is already being produced in India.

 

Cheers,

Mick

 

edit - see above

[Hilux5972]

Im a little surprised there isn't a Mk1 buffet or restaurant coach this year.

[wiggoforgold]

o.k. - lets hope they use the (newly tooled) Commonwealth bogies which have yet to make an appearence on the new Mk1's rather than the BR1 type used exclusively to date.

And of course that they make it to 18.83 mm gauge as this 16.5 mm stuff is dreadfully under scale.

[Dunsignalling]

We're at that time of year again, when Hornby has released its 2015 prices but Bachmann has not. At this time of year, people traditionally compare the new Hornby prices unfavourably with the old Bachmann prices, and many argue that this is proof that Hornby is "profiteering" (quite how that is possible when neither Hornby nor Bachmann are currently making any profit is never explained).

 

The HSTs were produced at the high point of the market for hand-assembly, when it looked like Chinese low-cost skilled labour would go on forever. The HSTs are clearly expensive to produce. They cost what they do. There's only one manufacturer in town, so your choice is either to pay for them or to change your layout so you don't "need" them.

 

I'd rather like a fleet of HSTs, but I won't be getting one.

 

Paul

THe HST is somewhat removed from my chosen modelling era and location but it occurs to me is that some items seems to be considered essential to any comprehensive model range; A4, Class 08, Class 47 etc.

 

If that truly is the case, given its longevity, geographical range and livery options, why does the HST not fall into that category? The only possible reason I can think of is the necessity to offer matching coaches but even Hornby seem to have difficulty doing that with any consistency.

 

John

[Black 5 Bear]

Im a little surprised there isn't a Mk1 buffet or restaurant coach this year.

My sentiments entirely, with the introduction of the MK1s I would say this is a must for 2016 unless Hornby surprise us !!!! 

[Fenman]

THe HST is somewhat removed from my chosen modelling era and location but it occurs to me is that some items seems to be considered essential to any comprehensive model range; A4, Class 08, Class 47 etc.

 

If that truly is the case, given its longevity, geographical range and livery options, why does the HST not fall into that category? The only possible reason I can think of is the necessity to offer matching coaches but even Hornby seem to have difficulty doing that with any consistency.

 

John

 

I agree with you that there are some "standards" like 08, 37, 47, A4 ... but all of those are duplicated by manufacturers (suggesting that they, too, consider them essential items in any range).

 

Whereas no-one is currently duplicating the HST.

 

Which suggests the manufacturers don't consider it to be a "standard". And I think you've hit the nail on the head as to why: they so typically run with rakes of 7, 8 or 9 trailers that it looks weird if they run in any other way (unless you've painted them overall yellow, maybe). And, although they're not terrible, even Hornby hasn't bothered to upgrade its Mk3s to the latest modern standards.

 

Paul

[Black 5 Bear]

Having looked at the new Mallard Railroad locomotive on Hornby.com it appears that this item now comes with cab and tender handrails, cab glazing and sprung buffers. Can anyone please confirm this specification ??? 

[Andy Hayter]

Isn't it time they moved production somewhere else? Viet-nam, Malaysia, India spring to mind. Get in there first, before the competition finds it has to move to stay profitable.

 

It is not as simple as it seems. 

 

You cannot just plonk an injection moulding machine on the outskirts of a city and produce high quality models.  To start with you need a much broader range of machines and you need a skilled workforce. 

 

Where do you find the skilled workforce if they are not already working in the sphere of expertise you want?  This almost becomes a chicken and egg situation and is not easy to solve - and it may just be that the Airfix production in India may be a first step to see if that sort of development of the workforce can happen there. 

 

Now add that even with all of its combined brands, Hornby is probably not big enough to efficiently fill a factory and so you need to have other business to fill the capacity (meaning probably working for Hornby's competitors), and you are unlikely to attract business until you build a reputation - another chicken and egg situation.  Although I am sure they debate internally, I am not at all sure that Hornby would want to run its own manufacturing organisation any more and would be much happier to purchase production from an independent manufacturer.  If it did run its own factory, how eager would competitors be to use the factory for their production?  It would be the Sanda Kan thing again , but with Hornby taking the Bachmann/Kader role.

 

Then there are mundane things to us, that may be critical in an Asian country - such as a reliable electricity supply, which is certainly a problem in parts of India.

 

So you see it is not a simple thing to do, and of course you have to choose your country carefully - political and commercial stability- wage trends - educational levels etc.

 

And of course the actual cost of labour today - which for example rules out Malaysia where average wages are today some 30% above China.

 

Despite all of the above comments, I would not be surprised if in say 10 years time we do see production of some of our models elsewhere in the world - maybe South America.

[Fenman]

... Despite all of the above comments, I would not be surprised if in say 10 years time we do see production of some of our models elsewhere in the world - maybe South America.

 

Having recently had to establish an operation in South America (not manufacturing), the choice is not brilliant - and for all the same reasons you outline for Asia (relating to commercial and political stability; a predictable and efficient judicial system; reasonable levels of security; an open economy). Argentina, for example, has a very well educated workforce and was booming for some years, but a change in political administration has led to assets being trapped in the country in Pesos, which devalue at 40% a year, some of which might be exchangeable at the official exchange rate (which is half the black market rate) provided you can get official permission, which has to be renewed monthly, from the central bank. And assets can be sequestered without real compensation. For various reasons, I ended up with a "choice" of just a single country: Uruguay (about which I'm not complaining - Uruguay is lovely).

 

The point is that while the commercial rewards may be very significant on paper, the risks can be an order of magnitude greater.

 

Paul

[Andy Y]

Quite correct Andy; not even your Apples or Samsungs of the world could up sticks and hope to build factories, train workforces and establish a culture. Any manufacturing shift would be dependent on governments of other nations to launch programmes (which they can probably ill afford) to bring in investment and experience from bodies experienced in establishing such facilities and I would think consumer electronics would be much higher up the priority list than injection moulding and assembly of short production runs for minimal return (and maximum hassle) evidenced by the world of model railways. The impetus will come if and when Chinese owned businesses feel the need to go offshore to source cheaper production.

 

Production was taken to China because manufacturers proved they could do it and I think we're a long way from a Vietnamese plant showing the same, and if they can it'll be making lots of phones that sell for a lot of money.