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

[Chris Higgs]

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

 

Depends I suppose if you are just interested whether it runs. The cosmetic things are either massive errors or an irrelevant irritant depending on your viewpoint. The running issues were more serious - unless of course you just collect the models to store.

 

But they have had an awful ot of 'incidents' over the years. There dosen't seem to be any 'fake news' in the list.

 

Anyone who like me has tried to replace a burnt-out motor on a Pannier will have also had an interesting experience.

 

Chris

[jjb1970]

Disappointing but not totally unexpected. I respect them for releasing such a statement, they're in a classic catch 22 as if they stay silent people accuse them of poor comms and if they issue a statement like this it seems it'll fan flames in some quarters.

 

I think their problems are a combination of internal and external factors. I do think they've over promised and under delivered and the waiting times for some of their products have been ridiculous. Before anybody say's "they're only models, complain about something important like world hunger", yes they are only models and if they wait time is years it is indeed hardly the end of the world. However businesses are very often judged in terms of what they deliver against their promises, if a business consistently fails to do what it has said it will do then it gets a bit of a credibility problem. The blocked pipeline has nothing to do with Brexit, neither have some of the niggly QC issues that have been associated with some Dapol models. There has been a feeling that some of their models (such as the OO Class 73) have been rushed out with avoidable problems which has taken the shine off some otherwise superb models, like the Class 73 which is fundamentally an excellent model.

 

The Brexit thing is not baseless however. No, it doesn't explain endless delays or some QC lapses but if you're in a business that works in dollars and the pound plummets overnight and then falls further then that has an impact. Especially for smaller companies like these. We've seen the NRM defer the prototype HST and we have been told that the Rapido/Revolution Pendolino has been hammered by the devaluation of sterling. That isn't remoaning, its just recognising reality.

 

I do wish Dapol well. At their best they're capable of fantastic work and I do think they were instrumental in improving the standard of RTR N gauge and also growing the appeal of O. Their Black Range is an interesting and brave venture and it'd be a poorer hobby without them. I don't think they'll be the only company whose plans are hit hard by the devaluation of sterling.

[Tricky-CRS]

I have said elsewhere, to blame this on brexit is a smoke screen. These were announced years ago and should have been tooled 4 or so years ago if the desire had been there. The class 50 and BoB in particular could have been making good profits long before the current financial problems. This is more to do with deleting the past and repositioning the business away from N Gauge.

[John M Upton]

I do have to say that I have a number of Dapol's 156's, 26's and 27's in N gauge and aside from a slightly washed out interpretation of Rail Blue, they have been nice little runners.

[Davexoc]

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.

Is that where the problem lies, selling something similar for half the price might be their undoing. If they were taking a hit on the MJA because either someone got the numbers were wrong, or they absorbed price increases, means less to plough into the next project. High turnover looks good, but without a good profit it isn't sustainable.

 

And the price of plastic raw materials went up this week, around 8% or £100 per tonne. That would be well over £1m per year to my employer.

 

Dave

[Butler Henderson]

No doubt Dapol have produced some good N gauge models but having experience of others and ultimately a self destroying Ixion Manor which Dapol were involved in the design of I abandoned my N gauge layout out of disillusionment. My next attempt at N gauge which I started describing here is unfortunately now stored in the loft partly due to a Tomix point that kept on not changing and partly due to having to shift furniture round to make space for "working at  home", something which I have yet to do but expect I will be required to from summer onwards. I wonder how many others were tempted into N gauge by Dapols 14xx and have since faded away. Just to add the Manor was replaced but there was no way I was going to run it on that original layout as the loco tender circuity connection was plainly not up coping with to a short on a dc layout.

[Les1952]

I have said elsewhere, to blame this on brexit is a smoke screen. These were announced years ago and should have been tooled 4 or so years ago if the desire had been there. The class 50 and BoB in particular could have been making good profits long before the current financial problems. This is more to do with deleting the past and repositioning the business away from N Gauge.

 

I suspect less of a smokescreen, more like the last straw.

 

However with the Bachmann/Farish catalogue going up in price, DJM not producing stuff until he can pay for it leading to very long lead times and Hornby quietly dropping quite a large proportion of its Continental lines amongst other things, I wouldn't say that Dapol is the only one with problems.

 

Les

[Les1952]

I note on the website that the only product development now shown is the 68 in N, the B4 and 73 in OO and the Jinty in O.

 

I assume that these are the ones that have come through the first part of the review and are "green lighted"....  I also assume that others will reappear as and when they have been released for further progress.

 

Just an assumption- I've been wrong before.

 

Les

(counting myself lucky in that Dapol currently has nothing on my long list in N and only the B4 in OO)

[JSpencer]

I suspect less of a smokescreen, more like the last straw.

 

However with the Bachmann/Farish catalogue going up in price, DJM not producing stuff until he can pay for it leading to very long lead times and Hornby quietly dropping quite a large proportion of its Continental lines amongst other things, I wouldn't say that Dapol is the only one with problems.

 

Les

Brexit certainly throws in a few uncertainty factors. It will be official in a few weeks, then a 2 year drag of negotiations and much spite, all of which make investing in new tooling right now very difficult.

 

That said, with so much announced these days, I also think that maybe manufacturers are not getting as many orders as expected. DJM arrived with a program, which to me at the time looked very ambitious. I think the vast choice of new items from all caused a trickle of orders for each which means that returns were not going to be fast enough to cover any loans required to develop them.

Kings were not in massive demand prior to the new Hornby and Hattons announcements. The duplication doubtless lead to the order book not being as big as desired at Hattons, while at the same time, the Hornby version failed to sell as fast, possibly due to some people waiting for the Hattons one instead. Hornby were forced to sell off theirs cheap which signalled great postponement of the Hattons one.

 

I believe Dapol have found themselves in a similar situation. The order book being not large enough to ensure a rapid return on investment.

 

What is the lesson here?

You could announce a much smaller program (like just one loco), this avoids orders being dispersed across several models, however if that does not sell then what? Say it is postponed and try something else? You could still find yourself in that same situation.

[Dunsignalling]

I suspect less of a smokescreen, more like the last straw.

 

However with the Bachmann/Farish catalogue going up in price, DJM not producing stuff until he can pay for it leading to very long lead times and Hornby quietly dropping quite a large proportion of its Continental lines amongst other things, I wouldn't say that Dapol is the only one with problems.

 

Les

It's not Brexit as such that is causing problems (and Dapol is definitely not alone), it's the sudden and substantial fall in the exchange rate between Sterling and the US Dollar that the referendum result triggered. Given that Sterling was widely considered to be overvalued, it was likely to happen anyway, albeit more gradually and (possibly) not so far.

 

The r-t-r producers have been turning out and/or announcing new models in unprecedented numbers over the last few years. However, even without the currency turbulence, prices have risen fairly dramatically; leaving many of us reluctant or unable to buy in the quantities we might have in the relatively recent past.

 

In my own case, the (OO) Southern Region S15 4-6-0 has long been my "most wanted" loco but, due to the numbers of other SR/ex-LSWR models in the offing, I had decided to limit my purchases to a pair, one with each tender. In the end, I did get a third, but only because of a hefty discount brought about by Hornby delivering a second wave of models before the first had sold out.

 

If I am at all typical, such greater selectivity is unlikely to result in a model "flopping" altogether but will impact on multiple purchasing. Unless batch sizes are reduced, each model should be expected to take longer to sell through without discounting.

 

I suspect that this is exactly what has set the alarm bells ringing at Dapol because the N Gauge market is normally reckoned to be approximately one fifth the size of that for OO, That means it has proportionately less resilience in the face of change and is inevitably the first to feel the chilly draught.

 

For Dapol, this has been exacerbated by N representing a larger share of their overall activity than for other players. Circumstances have dictated that they had to react first but the effect will not be limited to one maker or one scale.

 

They have hopefully made the tough decisions early enough to see them through the rough patch ahead.

 

John

[No Decorum]

Brexit certainly throws in a few uncertainty factors. It will be official in a few weeks, then a 2 year drag of negotiations and much spite, all of which make investing in new tooling right now very difficult.

 

That said, with so much announced these days, I also think that maybe manufacturers are not getting as many orders as expected. DJM arrived with a program, which to me at the time looked very ambitious. I think the vast choice of new items from all caused a trickle of orders for each which means that returns were not going to be fast enough to cover any loans required to develop them.

Kings were not in massive demand prior to the new Hornby and Hattons announcements. The duplication doubtless lead to the order book not being as big as desired at Hattons, while at the same time, the Hornby version failed to sell as fast, possibly due to some people waiting for the Hattons one instead. Hornby were forced to sell off theirs cheap which signalled great postponement of the Hattons one.

 

I believe Dapol have found themselves in a similar situation. The order book being not large enough to ensure a rapid return on investment.

 

What is the lesson here?

You could announce a much smaller program (like just one loco), this avoids orders being dispersed across several models, however if that does not sell then what? Say it is postponed and try something else? You could still find yourself in that same situation.

From my point of view, I think you’re absolutely right. I have become selective to the extent that I reject a new model with what I regard as unacceptable flaws where an old model exists. Where no old model exists and a new but flawed model emerges which fills a gap, I might buy one rather than multiples. Where a new model emerges with no (to me) unacceptable flaws and there is no existing model, well …

 

… so far as Dapol is concerned I went all wobbly at the knees and bought four 68s.  I can even live with the ghastly livery clanger on the DRS version. I love them!

[Revolution Ben]

 

Hello all,

 

A couple of years ago Bachmann took the unpopular decision to increase prices across their ranges - 00 and N - to build in resilience.

 

As far as I can tell Dapol did not.

 

Their Class 68s, HIA hoppers and MJA box wagons appear to have been hugely successful in sales terms but clearly have not generated the profits required to fund new models going forward. This suggests to me that, while the models may have been priced to cover their own costs and generate a profit, they were not priced in a way to sustain the business going forward.

 

I am sure that manufacturers read these forums and have clearly taken note of the regular complaints about the prices of new models. Dapol specifically mention the "price sensitive" nature of the N Gauge market.

 

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.

[Chris Higgs]

Hello John,

 

...

 

Chinese companies choose to do their international business in US dollars, so for British companies the fall in Sterling had a clear, unambiguous and damaging impact. Put simply: their money buys less, so they either charge us a lot more for the same, or produce less.

 

 

 

Ben A.

 

Unless, of course they had the foresight to hedge their currency risk. This isn't just for massive corporations, your local bank will be happy to arrange to purchase some simple currency forwards to mature at the time when you will have to pay for the goods. Then any loss due to currency shifts in the meantime will be paid out. Conversely you won't gain any benefits from exchange rate shifts in your favour either. The bank will expect you to put a certain percentage of the amount in an account with them in case the latter scenario occurs and you end up having to pay them.

 

You need a finance director who understands the potential risks you might be facing. And it's too late to start now.

 

Chris

[TomE]

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.

 

 

^^This.

 

Personally I would be more than prepared to accept higher prices as an alternative to having nothing to buy at all, but with one caveat. The standard and quality control of the finished product should not decrease as price increases. Swallowing higher prices would be much less tenable if inaccuracies and problems became more prevalent. 

 

Bachmann seem to be moving in this direction, Fewer models, higher prices, but continued innovation & improvements. Dapol on the other hand seem to be unwilling (or unable?) to follow a similar path, resulting in disappointed customers. 

 

Tom. 

[adb968008]

A business needs turnover and margins to support its staff and costs.

Producing less doesn't help sustain a business without an increase in margins or a reduction in costs.

People will only pay so much, and incomes are being squeezed.

 

Cutting R&D is one way of reducing cost, but cutting a root will lead to a shrinking tree further down, people only need so many 73's and Westerns, especially at a raised price.

 

It's a perfect storm for manufacturers, sadly as Ben says..

 

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.

Unfortunately, the higher the price, the less of a choice some consumers will have.

 

Three European HO gauge models I'm looking at right now, would cost the same as a months mortgage.

10 years ago I could buy 20 British locos for the same mortgage payment.

 

 

Sadly not all the manufacturers are going to survive this, but the ones with lowest cost base, best innovative ideas will probably emerge strongest. 10 years ago no one dreamed of buying uncooked bread, today part baked bread to finish at home is not only popular, it's desirable !!!

 

Part of the problem is the hundreds and thousands of s/h stuff floating out there, as long as this supply swills round the auction sites, it's going to affect the new price resistance.

 

How about addressing this...

 

Maybe one route is making new bodies only, to put on existing s/h rtr chassis's out there ?

 

there's several locos out there which could feasibly share an existing rtr chassis. For example If someone made a nice 84xxx or stanier 2-6-2t painted and decorated body for £60/70 there's a massive amount of Bachmann Ivatt tank chassis's out there I could drop it on.

This means a much lower cost risk in developing a tooling up front and deals with the issue of s/h in the market competing with new, and still provides models to a market at a price the pocket can afford.

 

Post Brexit it leaves the manufacturer a market to do the chassis and complete locos later if the demand is there... there's dozens of prototypes out there that could have this style of budget upgrade solution and part of the problem is the vast plethora of s/h stock out there which keeps prices low, distracts the consumers spend and with age attrition will feed the supply chain for several years yet.

 

I for one would be happy to assemble my loco from the painted spruces and do it myself if that saves time and cost further, indeed this gives an extra service retailers could consider to offer.

[JSpencer]

I......

 

In my own case, the (OO) Southern Region S15 4-6-0 has long been my "most wanted" loco but, due to the numbers of other SR/ex-LSWR models in the offing, I had decided to limit my purchases to a pair, one with each tender. In the end, I did get a third, but only because of a hefty discount brought about by Hornby delivering a second wave of models before the first had sold out.

 

If I am at all typical, such greater selectivity is unlikely to result in a model "flopping" altogether but will impact on multiple purchasing. Unless batch sizes are reduced, each model should be expected to take longer to sell through without

I too brought only 2 S15s, one of each tender. I would probably have stayed at just one, except one of the numbers briefly sat on the Bluebell which is the only reason I brought 2. I did not succumb to a 3rd, probably because so many other nice SR goodies have been appearing since. I will get a 3rd if the other permanent Bluebell member makes an appearance.

The point is after buying 3 King Arthur's and 3 T9s in the cheap old days, I tend to content myself to just one model like I did with the 700 class.

 

I did crack for 3 original Merchant Navies, only because of the vast detailed differences.

 

With so much announced, money instability and increasing prices, there is only one result really, and that is fewer sales.

[JSpencer]

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.

There is little chance of customers putting forwards a collective message, we are all different, different incomes, different ideas of expectations.

 

The message is mixed, some people will forego fitted detail to save cost others not.

 

At the end of the day, if a model is not viable for mass production, then mini production or kit building will have to do. Strangely kit manufacturers have had hard times with all the previously cheap RTR, maybe a reversal in their fortunes will happen.

[Steven B]

Dapol haven't helped themselves. There are plenty of models that could be re-run to bring in more cash with very little investment; They've never done an olive green Dogfish for example.

 

Similarly, there are more liveries that could be applied to the HST. There are plenty of one-offs that could be done (Harry Patch, FGW BR Blue, NRM 40,  etc). Dapol could sell these as power car only models, re-using existing tooling. I'm sure many modellers with existing HSTs wouldn't mind an extra power car or two to swap with their existing ones from time to time.

 

Happy modelling.

 

Steven B.

[Karhedron]

Dapol haven't helped themselves. There are plenty of models that could be re-run to bring in more cash with very little investment; They've never done an olive green Dogfish for example.

Agreed. They have never produced B-sets, Autocoaches or Siphons in early BR Crimson either. They usually seem keen on sweating their assets so these omissions look very odd.

[Vonzack]

The re-livery announcements in N are welcome, but probably signified that we shouldn't expect anything new for the next year or so. I just hope that in the case of the HSTs, sufficient investment is put into production so that the sets can be release in a timely fashion, I don't want another multi year wait before I can run a prototypical train.

[bmthtrains - David]

There are several issues being discussed in this thread, all of which have undoubtedly influenced Dapol's decision, but I think Ben hits it on the head that once again we as consumers need to decide what we want - ever-increasing prices or less detail and cheaper models. I'd go for less detail and more affordable products (partly to keep the hobby sustainable for newcomers), but Hornby tried this and look what happened...

 

For myself, I'm lucky in that I've purchased pretty much everything I've wanted over the past fifteen years or so, and have a nice collection to run (if I ever get round to making a new layout). Since my buying funds dropped dramatically when I left work to go to university, there's actually not been a single new release I feel I've 'missed out on', given the lack of contemporary modern image releases (presume a much smaller market than transition or blue period now). Only Revolution has had any money off me in the past 4 years, and there would have to be something pretty special from Dapol or Farish for me to be able to justify the newer higher prices (£145 for a class 158???). I'd like to get the Pacer from Dapol if it ever appears, but again it would depend on price.

 

The bottom line is models are going to continue to rise in price, and firms like Dapol will have to realise that this leads to expectations of higher quality control and service. It is not good enough for Dapol to reel off multiple announcements that never see the light of day (that Pacer was announced 10 years ago...), and yes Farish have been guilty of this too. 

 

Oh, and if people think Brexit has had an impact on prices, just wait until we actually leave the EU in 2019...

 

David

[bingley hall]

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.

[D9020 Nimbus]

I think the choices being made by Dapol are largely a result of the departure of Dave Jones and the arrival instead of people largely associated with 'O' gauge.

 

At least when it comes to European models, most of the types I'm interested in have been made in the past to standards of quality--at least as far as reliability is concerned--superior to current British RTR 'N' gauge standards. And these models are readily available secondhand.

[Legend]

Hello all,

A couple of years ago Bachmann took the unpopular decision to increase prices across their ranges - 00 and N - to build in resilience.

 

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.

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.

[grahame]

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.

 

 

There are also plenty who have not scaled back their spend but maintained it, and as a consequence have found it purchasing less. They are quantitative behaviours that can be assessed and analysed, but thowing qualative arguments in the mix like 'reasonable' and 'value for money', which are subjective and a lot more difficult to analyse, does not easily help or support or your regular moan about increasing prices being too high.

 

As others have mentioned and recognise, costs have increased and to remain in business prices need to increase as a result. If they don't the companies will go out of business or they will have to effectively withdraw from market sectors as Dapol appear to have done in their announcement.

 

G.