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

[jjb1970]

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

 

I agree 100%. There is clearly a lot more to the announcement from Dapol, and Dapol have themselves made that clear. They reference Brexit as a factor, not THE cause of this announcement. To say this slowdown has been caused by Brexit would be a gross simplification and incorrect but it would be just as incorrect to deny that such a large devaluation of sterling and uncertainty over Brexit have not had an impact.

[grahame]

Part of the problem is that Railroad offerings are only worthwhile when accompanied by a higher specification version to differentiate them. In N Gauge you could argue that the "Railroad" niche is filled by Union Mills and the ex-Poole Farish range.

 

Manufacturers don't have to produce models of the same loco (or whatever) at each specification price point/sector to differentiate. Most people are able to discern the level of quality and detail and purchase accordingly - besides price gives a clue as to what you are getting. There are often very cheap products to be found but I doubt that there are many on this forum that purchase them like this N gauge HST: http://www.hattons.co.uk/128232/Technic_9_901052_U_Intercity_Train_Set_Series_3_Pre_owned_poor_box/StockDetail.aspx which rather indicates that most prefer better specification. 

 

If you consider UMs range to be the bottom end basic spec product (but acceptable to some) and CJM to be the high top end, you'll notice that their ranges do not overlap or duplicate. When occasionally the there is a duplicate product with distinctly different specification, such as the Farish and UM J39, then production of the more basic version tends to fade away. But if a manufacturer is happy to make their products only at one specification level and finds that sufficient to generate a sufficient turnover and return on investment then that's an acceptable market approach. There is no need for them to produce other specifications.

 

G.

[Les1952]

Looking at the website today two more models have reappeared in the development section.

 

N- WC/BB is marked "In abeyance"

N - J72 is marked "cancelled".

 

This is in addition to the four that were there yesterday

 

N -  Class 68 "in tooling, awaiting first shots"

OO- Class B4  "in tooling"

OO - class 73 "Artwork in process awaiting first rendition"

O - Jinty  "First shot received, awaiting 1st EP"

 

Dapol have said we will be updated on the rest.  No doubt as the future of each is decided the place to look is "Product Development" on the Dapol website.  Not a lot of point in speculating what will happen next - look, see and report....

 

Les

[Dunsignalling]

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

The idea behind Railroad is to provide (in Hornby's main range) a product for those who want Locomotive "A" and, in Railroad, one for those who just want "a locomotive".

 

Availability of a prototype in both generally results from a new high spec model replacing an existing one in the main range, with the obsolete one being reincarnated as Railroad. 

 

John

[BR Blue]

The 00 class 73 project was completed. They are now on their second run. Unless they are doing a 73/9 they wont be doing any development.

[adb968008]

The 00 class 73 project was completed. They are now on their second run. Unless they are doing a 73/9 they wont be doing any development.

How popular will a second run be ?

As we saw with the Hornby k1.. 2nd runs can stick around, I bought 3 class 73's first time round, and I'm full on shed.

If the price climbs 20% I'm still full on shed. MRP of the sound 73 is £303.

 

 

I have 2 class 71's, with 2 more to come, and a 74 on order (though I'm rapidly thinking that's dead).. but with potentially 8x SR 3rd rail electrics, I'm more thinking of a cull than expansion.

[Karhedron]

Manufacturers don't have to produce models of the same loco (or whatever) at each specification price point/sector to differentiate.

True but my post was in a specific reply to the comment about manufacturers being caught in a dilemma between offering more detail or lower prices. Assuming that more detail translates to a higher price (not always but a general trend) then I stand by my statement that offering a budget option will only offer additional benefit a manufacturer if they offer a detailed version as well.

 

Making a product too expensive will put off some customers. Making a model with only basic detailing will put off others who want a higher specced loco. In both cases, the manufacturer is only covering a portion of the potential customers for that particular class of loco.

 

I am not saying that manufacturers like UM should not make locos the way they do or even that they should make higher detailed versions too. My point is that budget locos are only a solution to the problem of appealing to different market segments if accompanied by a higher spec version (Hornby Railroad vs main range). If a manufacturer does not need to compete in all arenas then this is not a problem. UM have plenty of repeat customers and do not appear to be in any difficulties so more power to them.

 

Dapol on the other hand appear to be somewhere in the "squeezed middle". My point was that changing the level of detail they offer is likely to be a zero-sum game. Any increase in sales due to lower prices is likely to be balanced by loss of sales due to lower levels of detailing. To be able to appeal to both ends of the market, Dapol would need to offer differentiated products since it is clear that the current price increases are eating into sales.

[steve1023]

Bizarre thing is that the models apparently deferred (read cancelled?) would probably have been good sellers, particularly the WC and class 50 with huge livery potential on the 50 and different name/number combo's on the WC. Hopefully one of the other manufacturers do recognise the potential and are right now preparing to announce.

 

Steve

 

Edit:maybe Revolution and DJM could recognise it really is pathetic to be producing two class 92s in N and make better use of resources elsewhere (sorry guys, but it is the truth).

[njee20]

Both had spent money before being made aware of the other's intentions. Both have sold enough for it to be viable. How on earth is that "pathetic"?! You act like they're doing it to spite each other. Should one of them write off their sunk costs? Which one?

 

Why don't you do a 50, rather than wait for other pathetic companies to do it for you?

[rob D2]

Regardless of Brexit ( and I'm not getting into that ), N gauge is a tiny market , class 50 a tiny percentage of a tiny market, so I think that has more to do with it.

 

Seems to me seeing what sells , is that the contemporary scene shifts stuff fast especially in OO

[No Decorum]

I have . .  a 74 on order (though I'm rapidly thinking that's dead) . . .

 

I hope not. I’ve paid for mine! I think it’s more a case of waiting until Dave gets round to it. I think he said that he’s finalising the 71s first.

[steve1023]

Both had spent money before being made aware of the other's intentions. Both have sold enough for it to be viable. How on earth is that "pathetic"?! You act like they're doing it to spite each other. Should one of them write off their sunk costs? Which one?

Why don't you do a 50, rather than wait for other pathetic companies to do it for you?

Sorry if you're offended by my post. We are 6 pages into a thread about one of the big players allegedly deferring models in a very niche market where 2 smaller competitors which are both reliant on crowdfunding to get the models to market are currently (actively) trying to get their model to market first.

 

Do you think in the current climate, a climate which has seen Hornby's financial woes well documented, Bachmann's price increases well documented and now Dapol deferring a large part of it's development that it is sensible to have two companies developing a N gauge class 92.

 

Just to be clear, I haven't said I wanted a class 50, just that I believe that those two particular models would give good opportunity for return.

 

Steve

[Dunsignalling]

Regardless of Brexit ( and I'm not getting into that ), N gauge is a tiny market , class 50 a tiny percentage of a tiny market, so I think that has more to do with it.

 

Seems to me seeing what sells , is that the contemporary scene shifts stuff fast especially in OO

If you don't buy the contemporary stuff quickly, you risk the livery becoming out-of-date. Once it has, re-runs are less likely too - I can't envisage Bachmann making another batch of NSE 159s or SWT 170s any time soon.  There must be more pertinent examples but the nearest I get to contemporary is a few bits of NSE

 

It also assumes that the manufacturers make everything in more-or-less the same quantities. If they don't, the stuff they make less of just seems to shift fast.

 

 

 

John

[njee20]

Sorry if you're offended by my post. We are 6 pages into a thread about one of the big players allegedly deferring models in a very niche market where 2 smaller competitors which are both reliant on crowdfunding to get the models to market are currently (actively) trying to get their model to market first.

 

Do you think in the current climate, a climate which has seen Hornby's financial woes well documented, Bachmann's price increases well documented and now Dapol deferring a large part of it's development that it is sensible to have two companies developing a N gauge class 92.

 

Just to be clear, I haven't said I wanted a class 50, just that I believe that those two particular models would give good opportunity for return.

 

Steve

I'm not remotely offended by your post, I think it's stupid. Both companies have sold sufficient units to make a profit. To my questions, which one should stand down? They had both invested sums of money in a project, why shouldn't both continue if they're viable?

 

It's not like one of them was deciding between a 92 and a 50, and decided to go head to head on the 92 rather than have a monopoly on the 50s. That would be a bit daft. Anyway, irrelevant. I'm looking forward to my five 92s, but would probably buy a 50 or two, and definitely a couple of 59s.

[grahame]

I stand by my statement that offering a budget option will only offer additional benefit a manufacturer if they offer a detailed version as well.

 

 

Not true. If a manufacturer produces a new model of a loco (say) that is not currently in their range, but it is only targeted at either the budget market or the high spec dearer market, and it sells to those customers then that will be additional benefit (revenue) to that business. That is the business model that some manufactures currently successfully adhere to such as UM. There is no need to produce a range of same products tailored to different prices/budgets - they may not have the wherewithal, technology or skill to produce a detailed version but that won't necessarily mean that a budget version will not be worthwhile for them to produce.

 

And don't forget that a basic cheap poorly specced model may also be of interest to those preferring detailed products if they are prepared to undertake a little detail/enhancement modelling.

 

G. 

[grahame]

Bizarre thing is that the models apparently deferred (read cancelled?) would probably have been good sellers,

 

Why do you say 'cancelled'? Did you read the statement? It said "some previously announced and mooted projects will have to be put on abeyance until the economic conditions become more favourable". That doesn't sound or read like cancelled to me, but rather indicates further delayed, put back or simply deferred.

 

G

[PaulCheffus]

Why do you say 'cancelled'? Did you read the statement? It said "some previously announced and mooted projects will have to be put on abeyance until the economic conditions become more favourable". That doesn't sound or read like cancelled to me, but rather indicates further delayed, put back or simply deferred.

 

G

Hi

 

Pretty much what was said around the time of the Pendolino and 92. Put on the backburner then dropped.

 

Cheers

 

Paul

[njee20]

Yes, I think we all know what "deferred" means in this context! I'll wager a class 50 we don't see one from Dapol!

[Paul.Uni]

So far the only confirmed cancellation is the N gauge J72 http://Dapol.co.uk/product-development/n-gauge-product-development/N-Gauge-J72

[grahame]

 

. To be able to appeal to both ends of the market, Dapol would need to offer differentiated products since it is clear that the current price increases are eating into sales.

 

I didn't get the impression that Dapol were saying there was a problem with sales. Their message was that the cost of development, tooling and production had increased substantially in the last 7 years. That rather indicated that, at the current level of sales and prices, they are making insufficient contribution for other developments. As Ben pointed out earlier, it may well have been that the recently released models, like the class 33, were probably under-priced, and if they had been £10 dearer it may well have not impacted sales volume and may have meant they could have proceeded with developing the announced new products.

 

Certainly a budget range would not help in that respect. And Dapols current response has been to target the presumably more profitable sector with the higher priced, higher specced Black Label range. Maybe that is what British N gauge needs.

 

G.

[grahame]

 

Pretty much what was said around the time of the Pendolino and 92. Put on the backburner then dropped.

 

 

 

Certainly the economic conditions haven't got more favourable since then. They've seemed to have got significantly worse in the last seven years.

 

G. 

[leachsprite4]

I think some scepticism on deferment is acceptable. Read the Dapol digest, which as I recall is where Dapol said all product updates will be placed and discussed in future.

 

In June on the J72 page the loco was in hold for three reasons including because of wanting to bring forward those now on hold. So in 9 months it is reasonable to think these may well be cancelled quietly.

 

As a note you may also want to see how silent Dapol were on the digest in recent months re the BoB, even now no comment or on the J72 page of the digest, which as again were news will be posted first.

 

I accept they are a small family company but one thing they need to focus on is communication with customers, this may actually improve sales.

 

I say this as the statement was made on a Friday leaving a void of a weekend for froth and comment to be made. Compared to making statement and having the Web updates ready to go live there and then. Plus respond to enquires.

 

Me I'm unhappy but at least the extra maunsells are coming. I'll cope life goes more important things to worry about.

 

I agree though if Dapol want to get more from current tools they should move quickly before they are out dated to much. A plain black Manor or hall with small tender anyone?

 

Graham

[mevaman]

In the numerous posts, a couple of factors have not been really discussed.

 

Firstly - with rising cost prices owing to higher manufacturing costs and the drop in sterling, we don't know what net margin is being made by Dapol when the products are first sold to market. This margin has to account for any stock that they fail to sell and the resulting working capital that they have to finance. Furthermore any margin

may be significantly eroded if they have to discount unsold stock later.

 

Secondly - with us consumers having to budget more carefully, what net margins are being made by the retailers on these products? They have the same net margin pressure as Dapol and also may have to hold stock for some time and then sell at a discount.

 

Finally - I have first hand experience of N gauge limited edition models selling in far lower quantities than their 00 gauge equivalents.

 

I am not at all surprised at Dspol's decision.

 

Andrew

[Revolution Ben]

Edit:maybe Revolution and DJM could recognise it really is pathetic to be producing two class 92s in N and make better use of resources elsewhere (sorry guys, but it is the truth).

Hi Steve,

 

Sadly we have not yet been able to crowdfund a crystal ball to have foreseen that Dapol would drop the 50 - or the 59, which TBH we would be more likely to consider although the detail variations may be problematic.

 

The Revolution 92 was launched after many months of work, with the full support of Wabtec/Brush, and is now funded and in tooling. Working with Rapido we are confident that we will deliver a product to match the standard-setting TEA tankers which were the first crowd-funded models to be delivered.

 

The message we received at the shows we attend has been overwhelmingly positive and clearly we enjoy the support of the hundreds who have ordered a 92.

 

Sorry, but I do not agree with your "truth" that this is pathetic.

 

Cheers

 

Ben A.

[steve1023]

Hi Steve,

Sadly we have not yet been able to crowdfund a crystal ball to have foreseen that Dapol would drop the 50 - or the 59, which TBH we would be more likely to consider although the detail variations may be problematic.

The Revolution 92 was launched after many months of work, with the full support of Wabtec/Brush, and is now funded and in tooling. Working with Rapido we are confident that we will deliver a product to match the standard-setting TEA tankers which were the first crowd-funded models to be delivered.

The message we received at the shows we attend has been overwhelmingly positive and clearly we enjoy the support of the hundreds who have ordered a 92.

Sorry, but I do not agree with your "truth" that this is pathetic.

Cheers

Ben A.

Hi Ben. Just so we are clear. I am NOT criticising the decision to produce a N gauge class 92, nor am I criticising the amount of work that has gone into the projects (both sides) and I am not in the slightest doubting the number of orders you or Dave have. BUT we do not need two. Please do not tell me you think we need two N gauge class 92s. I mean for goodness sake, when the last time I checked you were both producing the EWS version with the same running number. That's why I say pathetic. Because we have two companies trying to make money in a niche market and neither seem to have the common sense to take a step back and think this is not necessary & at a time when when the so called big 3 have either cut back on their announcements or increased their prices.

 

Ben - I genuinely mean't no offence when I said pathetic, but in fairness that is what I feel, maybe though madness would have been a better choice of word.