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

[phil-b259]

 

Plus on top, as also cited by Dapol, is the relative small size of the N gauge market and the 'cap' on retail prices (which rather seems like a jibe at the very price sensitive, or perhaps overly, nature of many N gauge enthusiasts). The economic and production change factors do not appear to have affected the O and OO ranges to quite the same extend yet surely the brexit effect would have also impacted those.

 

 

OO gauge sells far bigger volumes than N gauge I believe so there is more room for manurer with respect to rising costs etc. O gauge is a bit of a specialist one, but unlike N (or OO for that matter) does not appear to be anything like as price sensitive when it comes to buyers.

[Mr chapman]

Love or hate Dapol they have been a positive influence on N gauge! Before they came along and gave Farish a kick up the arse things were very different. The new products like the V2 were still of the Poole era quality with solid wheels. The Q1 was the first truly super detailed N gauge loco I think. It's going to be many years before a better version is available. And it's certainly not necessary! A lot of that love for N left with Mr Jones. Farish make some outstanding models! But I genuinely believe that a lot of that was in response from the threat from Dapol. If the WC never happens that would be a shame. But good god the range of southern models have been good from Dapol! Who knows... Perhaps it will show up later, or even be transferred to DJM? But it's good to see a clear honest statement from the manufacturer. Can't be easy for a company to put their hands up like that.

[D9020 Nimbus]

From my point of view, this announcement, together with the fact that I've encountered split gear problems on several stored Farish models (including 24s, 3MT, B1) means I'm going to be concentrating on European 'N' gauge (and HOe as well) from now on. At least virtually all of the models I want have already been made.

 

The money that Dapol would have got will now be going to Liliput and Minitrix. The latter in particular are not cheap, but price and value are different things...

[adb968008]

You are rather forgetting Mr Trumps vow to punish US companies that don't keep production at home. Thus the emphasis for US business is NOT to invest in overseas development at present, if they do they are expected to use that to take work and jobs back to the US.

 

That is the other big worry - not only are we placing ourselves outside the biggest trading block in the word economically, but those countries that have been touted as replacements all have protectionist trading policies in place that deliberately seek to dissuade outsiders from entering their markets or domestic companies from relocating overseas.

 

 

Trump is more concerned about US manufacturing jobs being lost overseas, those jobs haven't been migrating to Europe.. they've been heading East and South, Europe remains a sales target for US products, and US companies will have need for European employees to achieve those sales.

Moving production back to the US is going to lead to large scale inflation in the US, and a stronger $..both of which will make US exports more expensive and restrict the spending power of US domestic consumers.... Whilst Trump wants jobs back to the US, what will actually happen is it will make foreign goods even cheaper as the $ climbs.

 

A cheap deal is a cheap deal, and right now the UK is on special offer, indeed it's on it's 3rd such special offer since 2007, with no sign of that sell off ending.

 

If a US$ denominated company hired a European Employee for  £65k / 88k Euro in 2016, he was paying $100k

in 2017 he's now only paying $80k to pay £65K to that British worker....who is still free to roam the EU, that EU worker is still costing $100k.

in 2018 is possible that will become even cheaper still, maybe $60k against that EU worker who is still costing  $100k.

(In 2007 that company would be paying $140k for that £65k employee in the UK)

 

As i said earlier, as long as the politicians do their job...then UK will be a very attractive place for foreign companies to invest as they will have access to a cheap workforce who is still able to wander across Europe... and if not, then in 2020 they can fire all the UK employees, move to Europe and they've still saved a small fortune during the short term... but more likely if our politicians stuff it up, then foreign governments will put pressure on Europe to resolve it, to protect their interests.. Should Europe still not play ball, then another global recession will probably occur...and were already cheap and well placed for it.

 

of course in the short term, that £65k is going to be squeezed by the employee who wont be buying as many trains, as that $100k tooling for a new model will increase from £65k to £80k and may go to £90k.. then the per cost of making the model will also go up 30%-50%... 

If the employee used to buy 10 trains a year, but reduces to 7... then the manufacturer will also have to factor in selling say 700 trains, instead of 1000... then factor in the 30-50% increase in cost shared between the 700.. and thats how prices quickly double., now the buyer is only going to buy 5 instead of 10... once past that median between viable and non-viable..the investment in R&D stops as it becomes a point where the price increases so high, no one will buy... thats the point when bespoke/niche/low cost entities start and high cost/mundane/regular entities need to change or fail.

 

Dapol has obviously made that assessment on a per model basis and decided accordingly, Locomotion/Rapido, Hornby have also done the same in the last year and Bachmann earlier than that... Heljan haven't announced anything so far in 2017 for 00 and it could be that the only ones finding it worthwhile are the really streamlined operations like DJ, Oxford and SLW (who already fit the niche/bespoke/lowcost example).

 

Its not just how much it costs to tool up in China, then how much each SKU costs to make, but how many you can sell to your customer, whom is facing big increases in cost.

[blueeighties]

If the politicians do their job

That's us well and truly knackered then.

[mikeharvey22]

I cant find this on the Dapol website.

It was on the "News" page yesterday, but has now disappeared. Site was down for a while earlier today so may have not reloaded the most recent version.

[blueeighties]

manurer

A new range of 7mm cows?

[black and decker boy]

You have to think that as a company, they have been trying to catch up / recover or slim back from the mass they promised to become under their former product manager, an ardent n gauger.

 

Perhaps the slight discrepancies / errors in the 73 and 68 reflect the problem on costs.

 

Perhaps also, economic reality is they can achieve higher turnover, higher margin and lower risk inO gauge than nN gauge do have opted to take that route and use the convenient and no doubt truthful issue on postbrxot currency & cost pressures as the reason.

[BrushVeteran]

.................................................... or a Heljan-style operation where moulding is done 'at home' and the parts shipped abroad for assembly. 

Heljan sold all of their injection moulding machines over ten years ago Chris. The last loco bodies moulded 'in house' were the Class 52 Westerns.

[Will J]

Interesting thread but I think the geopolitical analysis is a bit of a red herring. True there have been considerable and relvant bigger picture wibbles and wobbles since Dapol announced that optimistic armada of models... but I'd be looking nearer, to the shape of the market and the shape of the company itself.

 

And I'm not suggesting that Dapol is in bad shape.

 

Fundamentally, Dapol as we know and usually love it today is a 'disruptive' organisation. 'Disruptive' in that it parks itself in unexpected parts of a market and does surprising things that push things forward. As has already been noted, Dapol arrived in British 'N' at a low point. The scale as a commercial offering might have vanished from mainstream model shops, but with a few pivotal products the whole thing shifted and we have been enjoying the benefits ever since.

 

The shift to 'O' might be seen as a more recent example of this same behaviour. I'm of a generation that regarded 'O' gauge as the preserve of octogenarian billionaires commissioning craftsmen to cast obscure components from exotic ear wax. Now I look at Dapol Terriers on the model shop shelf and I can imagine myself recreating the Hayling Island branch in my small suburban shed on a sensible (ish) budget.. Disruptive technology.

 

Dapol are perhaps back in that comfort zone... changing our perceptions of a given gauge. I wonder what will come next...?

 

So don't panic, nothing to see here and all the usuals. If the Dapol N gauge presence was to evaporate overnight it will still have left a hell of a legacy. N gauge in the 1:148 flavour has never been healthier.

[adb968008]

I'm of a generation that regarded 'O' gauge as the preserve of octogenarian billionaires commissioning craftsmen to cast obscure components from exotic ear wax. Now I look at Dapol Terriers on the model shop shelf and I can imagine myself recreating the Hayling Island branch in my small suburban shed on a sensible (ish) budget.. Disruptive technology.

The Terrier and 08 might be at teasing prices in O, but I'm not convinced it'll lead a revolution from N/OO into O.

 

Whilst my house price has gone up, the physical size remains unchanged.

Running a 6 coach train would cost over £1000 in stock, 1 Peco short straight costs £6 (a circle suitable for 6 coaches would be over £500) and even with a 5m x 5m square running space I'd need to go thru the neighbours space.

 

To me, O gauge rtr is a distraction, rather than a disruption to modellers of other gauges. Still for O gauge modellers used to paying >£600 for a loco, some manufacturing entrants going O represents happy days for them, and good luck to them. For the rest of us with varying sized collections with main lines, sidings, yards, gradients.. moving from OO to N would mean making big sacrifices in enjoyment, even if the new O gauge price is as attractive as the models are.

[Kris]

This is very disappointing news. It very much reads to me that Dapol see no future in the British N gauge market, leaving Bachmann as the only major player, and given their dearth of announcements in N gauge over the past few years you have to question their medium or longterm commitment to the hobby in this scale. 

[John M Upton]

Is there anything confirmed about the Class 68 in N?  Is it in the postponed pile?

[bigP]

--

[blueeighties]

This is very sad news for N gaugers I feel.

 

I understand and appreciate the economics of the smaller N market so can see where they're coming from, but it's disappointing for the N market nonetheless. 

 

Yes, Dapol models have their flaws, yet so do Hornby, Bachmann and all.  No one is perfect and this is where 'modelling' comes in to play.  Dapol have created some great stuff in N.  I think it's fair to say they pushed the market forward and should be applauded for putting their money in and having a bash at it.  Just look at their recent OO MJA release:  a twin box wagon at effectively half the price of the Bachmann MBA.  That's good competition that pushes other manufacturers to produce quality products at reasonable prices.

 

If they do pull back (and I'm not inferring that means pull out) from the N sector then with only one main player for the British N market we will only see further prices rises, even where cost factors don't necessitate one.  This is the simple down side of a Monopoly.  

 

I for one can only hope that another manufacturer will be able to step up and fill any void so that competition remains healthy.

 

 

Regards,

Paul

I have to disagree with the price and competition observation Paul. Yes, Dapol were certainly to be applauded and certainly raised some eyebrows when releasing things at very good prices compared to other manufacturers, as per the wagons you mention, and others such as the 7mm 08. However, this certainly won't have the effect of causing other manufacturers to rethink and lower their prices, it leads to announcements such as the one we are discussing, and Dapol announcing that the next batch of models, again for example the 08, having an increase in rrp.

[Dunsignalling]

The Terrier and 08 might be at teasing prices in O, but I'm not convinced it'll lead a revolution from N/OO into O.

 

Whilst my house price has gone up, the physical size remains unchanged.

Running a 6 coach train would cost over £1000, 1 Peco short straight costs £6 (a circle suitable for 6 coaches would be over £500) and even with a 5m x 5m square running space I'd need to go thru the neighbours space.

 

Still for O gauge modellers used to paying >£600 for a loco, some manufacturing entrants going O represents happy days for them, and good luck to them, but for the rest of us with varying sized collections with main lines, sidings, yards, gradients.. moving from OO to N would mean making big sacrifices in enjoyment, even if the new O gauge price is as attractive as the models are.

The more traditional O Gauge modeller, having the disposable income to spend £600 to £1000 or more on a loco (then), would usually live in a property of a commensurate size. The crazy UK property scene, especially in and around London, means that many people who would once have been regarded as quite wealthy nowadays live in much more modest houses. Unless you buy an older property, you don't get much of a garden, either  

 

What Dapol / Ixion / Minerva have done is to enable people who only have room for a small BLT or shunting plank in 7mm to adopt the scale in an affordable way, both financially and physically. Building and stocking a large O Gauge roundy-round has never been, and never will be, within reach of Mr Average. 

 

I suspect the sales of larger r-t-r models (in plastic, other than for static display) would be considerably less because of such space limitations. There seem to be several sources of beautifully made £2,000+ metal locos to satisfy the upper end of the market.

 

John

[TomE]

This is very disappointing news. It very much reads to me that Dapol see no future in the British N gauge market, leaving Bachmann as the only major player, and given their dearth of announcements in N gauge over the past few years you have to question their medium or longterm commitment to the hobby in this scale.

Whilst Bachman have drastically scaled back new tooling announcements, they are at least working to bring to market those models previously announced and clear their own backlog. The last N Gauge tooling cancellations I recall from Bachman were the 9F and Class 222 Meridian units some time ago and since then, they have (eventually) delivered every new model they announced. Dapol on the other hand simply continued to build on the backlog whilst not making sufficient progress on previous announcements, stringing everyone along in the process. For me, that's where the damage to their credibility as a serious player in N Gauge has been done.

 

I don't doubt that Dapol gave Bachman a kick in the pants some years ago, but since then Bachman have continued to inovate (Coreless motor, loco drive, next18 chips & DCC sound as a few examples) where as Dapol have firmly rested on their laurels. When their own "new generation" of Loco drive Dapol models have just been indefinitely delayed, it must certainly bring into question both their long term commitment to the N Gauge market, and even perhaps their ability to keep pace with new developments.

 

Luckily there are others coming onto the scene in the form of RevolutioN & DJM, so I don't believe Bachmann will have total monopoly over the scale any time soon. Buyers of RTR N Gauge models may just have to accept that there will be less to buy, but perhaps that's not a bad thing if prices are higher as a result.

 

Tom.

[Wheatley]

I am fed up with everything from manufacturing disruption to the black death being blamed all Daily Mail like on Brexit!  It hasn't even happened yet ...

particularly on the devaluation of Sterling

But that bit has.

[Kris]

Luckily there are others coming onto the scene in the form of RevolutioN & DJM, so I don't believe Bachmann will have total monopoly over the scale any time soon. Buyers of RTR N Gauge models may just have to accept that there will be less to buy, but perhaps that's not a bad thing if prices are higher as a result.

 

 

RevolutioN have shown that the quality of their products is high, however they are looking at niche manufacturing rather than true mainstream competition. DJM, whilst again showing potential, have promised lots but have yet to deliver in N, and until this happens they are not providing competition. 

[woodenhead]

Revolution/Rapido by all accounts are also taking a hit/loss on the Pendolino which is concerning though not a surprise since it straddled Brexit.

 

But since then in conjunction with Locomotion had have to pull back from the prototype HST and reduce the scope of the GNR single.

 

Let's hope the 92 is a resounding success

[bazjones1711]

If Dapol had not decided to ditch the BBA bogie steel wagon , which I'm sure would have sold well like some of their other wagons, they would probably make a profit. The BBA has far less costs and development than say a class 68 etc... If the likes of Cambrian can do this wagon surely they could.

Also if company's​ are scaling back why do we have two firms doing the same products ie , warwell , Esso tankers ... If you want 100% of the market do something no one else does all you end up with now is 50% of the market each !

[njee20]

Revolution/Rapido by all accounts are also taking a hit/loss on the Pendolino which is concerning though not a surprise since it straddled Brexit.

Are they? I've not seen that.

[Butler Henderson]

Love or hate Dapol they have been a positive influence on N gauge! Before they came along and gave Farish a kick up the arse things were very different. The new products like the V2 were still of the Poole era quality with solid wheels. The Q1 was the first truly super detailed N gauge loco I think. It's going to be many years before a better version is available. And it's certainly not necessary! A lot of that love for N left with Mr Jones. Farish make some outstanding models! But I genuinely believe that a lot of that was in response from the threat from Dapol. If the WC never happens that would be a shame. But good god the range of southern models have been good from Dapol! Who knows... Perhaps it will show up later, or even be transferred to DJM? But it's good to see a clear honest statement from the manufacturer. Can't be easy for a company to put their hands up like that.

Well it was the 14xx that tempted me to try N gauge but Dapols whole approach seems to be one blunder after another which include:-

a) 2mmFS standards use for rolling stock wheels and then customers charged for replacement wheelsets

b) The use of a stupid lubricant that dried rock hard resulting in model shops refusing to test a loco and importantly the need to lubricate again to shift the rock hard stuff before running it

c) Motors burning out on the 73s

d) Driving wheels slipping on the 2-6-2Ts and causing motors to burn out

e) The wrong positioning of the bogies on the Gresley coaches, and still wrong when they "corrected" them

f) Continual changing the motor in the 66s.

g) Overwide cylinders on the 9F and position of the front wheel IIRC

h) A B1 that looked a cross with a B2

I) Buffer fitted HST Mk3s

j) Continually offering the SR CCT as a fictitious BR (LMR) maroon liveried vehicle while, never offering a correct BR(SR) Crimson liveried vehic;le

k) Distorted front end to the 28xx

 

Part of the problem seemed to be the anti Farish "Delivering on time" promise which resulted in models plainly without enough R&D hitting the market.

[woodenhead]

Are they? I've not seen that.

http://www.rmweb.co.uk/community/index.php?/topic/111048-musings-on-rapido/page-6

[Crepello]

Well it was the 14xx that tempted me to try N gauge but Dapols whole approach seems to be one blunder after another which include:-

a) 2mmFS standards use for rolling stock wheels and then customers charged for replacement wheelsets

b) The use of a stupid lubricant that dried rock hard resulting in model shops refusing to test a loco and importantly the need to lubricate again to shift the rock hard stuff before running it

c) Motors burning out on the 73s

d) Driving wheels slipping on the 2-6-2Ts and causing motors to burn out

e) The wrong positioning of the bogies on the Gresley coaches, and still wrong when they "corrected" them

f) Continual changing the motor in the 66s.

g) Overwide cylinders on the 9F and position of the front wheel IIRC

h) A B1 that looked a cross with a B2

I) Buffer fitted HST Mk3s

j) Continually offering the SR CCT as a fictitious BR (LMR) maroon liveried vehicle while, never offering a correct BR(SR) Crimson liveried vehic;le

k) Distorted front end to the 28xx

 

Part of the problem seemed to be the anti Farish "Delivering on time" promise which resulted in models plainly without enough R&D hitting the market.

 

Hell's bells that's a bit harsh. I've been very pleased with all my recent Dapol models.