Hornby discounts

[Steamport Southport]

With tongue in cheek, Binns Road would be my first suggestion......

 

Off topic.

 

But there was talk a few years ago about a Frank Hornby museum in Liverpool. Obviously it didn't happen.

 

 

 

 

Jason

[40F]

Probably wise to do more then one, to let those that feel the need vent some steam. Maybe even make a regular thing of it: not too often, just regular.

 

 

Why it would not serve any purpose what so ever

[DCB]

A couple of points, Jaguar LandRover seems to be making a go of production in the UK.   Peco seems to.  Perhaps the realisation that the Hornby range needs a few people working full time in a small production facility not a lot of people just doing a bit now and again between banging out all sorts of stuff for competitors in a huge one is overdue.  

There is no way to repatriate moulds and dies from China so companies should factor that into their calculations before outsourcing production beyond EU laws.

Model Railways are terribly sensitive to fashion, first it was GWR, now its BR LMR, a tiny minority model the SDJR, the MSWJR, First Great Western, Scotrail, M&GN, RHDR and Dajeeling Himalaya, with their weird liveries but the number of units they can expect to shift off model shop shelves of these items is tiny compared with mainstream BR LMR or BR/GWR. or even Thomas the Tank    

It makes sense to make models of what kids and parents can see.  42XX, 64XX, 57XX, Kings (With cropped cabs) Castles, Halls, Tornado, Flying Scotsman (In this years livery/chimney/Smoke deflectors) with the right numbers in preserved condition so folks can buy what they saw running.

[Legend]

A couple of points, Jaguar LandRover seems to be making a go of production in the UK.   Peco seems to.  Perhaps the realisation that the Hornby range needs a few people working full time in a small production facility not a lot of people just doing a bit now and again between banging out all sorts of stuff for competitors in a huge one is overdue.  

There is no way to repatriate moulds and dies from China so companies should factor that into their calculations before outsourcing production beyond EU laws.

Model Railways are terribly sensitive to fashion, first it was GWR, now its BR LMR, a tiny minority model the SDJR, the MSWJR, First Great Western, Scotrail, M&GN, RHDR and Dajeeling Himalaya, with their weird liveries but the number of units they can expect to shift off model shop shelves of these items is tiny compared with mainstream BR LMR or BR/GWR. or even Thomas the Tank    

It makes sense to make models of what kids and parents can see.  42XX, 64XX, 57XX, Kings (With cropped cabs) Castles, Halls, Tornado, Flying Scotsman (In this years livery/chimney/Smoke deflectors) with the right numbers in preserved condition so folks can buy what they saw running.

It depends on the Labour content of the item. I dare say with Jaguar Landrover there is a high degree of automation(all those robots we see) and they also charge a premium price , so perhaps more scope to absorb extra costs. With Peco track , thats got to be fairly highly automated as well . But with Hornby I think there is quite a bit of labour involved in constructing say a classs 71 with all its separately attached details. So I think some items would be much more expensive . That's not everything though. You are correct , maybe there is no longer much of a difference in costs for something that involves little labour, like track or the aforementioned platform section retailing at £6.99 which is just a plastic pressing. So maybe they could repatriate some production here to get better control over it . Also it follows that if you make things simpler then there's less labour and you could perhaps repatriate that. I hear tales of coach bogies with 12 separate parts that need assembly. Make it in one pressing then you cut out that assembly task, but that's probably getting onto something like "Design Clever". Not a bad thing in my mind . I think we have had a tendency to demand things over detailed whereas adaquately detailed would do most of us.

[Legend]

Just a few other points on labour cost. If you look at Kader's accounts , staff costs ( everyone from the cleaner to manager) are 31.8% of revenue. Now that revenue is what Kader get selling product to Bachmann UK .Bachmann UK obviously add on their margin to that to cover their costs here and the retailer adds on his margin. So it's not 31% of the cost you and I the consumer pay, it must be considerably less than that,but nevertheless it gives a reasonable indication of labour content at the factory in China.

 

Labour costs in China , even after these massive increases we have been hearing about are still only 25%-33% of those in UK, so you can see if you repatriated production of things with a large labour content, prices must go up. Again just to quote some figures to give you an idea . I believe the annual labour cost in manufacturing in China is around £6800. Our minimum wage for someone over 25 Is £7.50 an hour , so for 37 hours a week , 52 weeks a year thats £14430, then there's NI, Pensions etc

 

Obviously there are a lot of averages in there but I'm just trying to show relative costs of labour in China is still very low when compared with UK.

Edited October 19, 2017 by Legend

[Steamport Southport]

£7.50 minimum wage is usually for unskilled labour, even shelf stackers in ALDI are on much more than that. Most companies now pay the Living Wage as standard, which is now about £9 PH.

 

I doubt anyone in the UK that is skilled enough to make products at the standard that we are expecting is going to be working for minimum wage. I would reckon that skilled workers would demand a lot more than that. Especially since we have a skills shortage and need foreign labour just to fill the jobs currently available.

 

Anyone expecting production to move back to the UK is being naïve. It's more likely to move to another Asian country when China gets too expensive.

 

 

 

Jason

[robertcwp]

Just a few other points on labour cost. If you look at Kader's accounts , staff costs ( everyone from the cleaner to manager) are 31.8% of revenue. Now that revenue is what Kader get selling product to Bachmann UK .Bachmann UK obviously add on their margin to that to cover their costs here and the retailer adds on his margin. So it's not 31% of the cost you and I the consumer pay, it must be considerably less than that,but nevertheless it gives a reasonable indication of labour content at the factory in China.

 

Labour costs in China , even after these massive increases we have been hearing about are still only 25%-33% of those in UK, so you can see if you repatriated production of things with a large labour content, prices must go up. Again just to quote some figures to give you an idea . I believe the annual labour cost in manufacturing in China is around £6800. Our minimum wage for someone over 25 Is £7.50 an hour , so for 37 hours a week , 52 weeks a year thats £14430, then there's NI, Pensions etc

 

Obviously there are a lot of averages in there but I'm just trying to show relative costs of labour in China is still very low when compared with UK.

If you are looking at Kader's consolidated accounts, then they will be for the entire global group including Bachmann. So, revenues are sales by the group to external customers, not sales from one group company to another, which are eliminated on consolidation as consolidated accounts present what the group as a whole does with everyone else, not what goes on between companies in the group. Also, the staff costs will be for the global group.

[adb968008]

£7.50 minimum wage is usually for unskilled labour, even shelf stackers in ALDI are on much more than that. Most companies now pay the Living Wage as standard, which is now about £9 PH.

 

I doubt anyone in the UK that is skilled enough to make products at the standard that we are expecting is going to be working for minimum wage. I would reckon that skilled workers would demand a lot more than that. Especially since we have a skills shortage and need foreign labour just to fill the jobs currently available.

 

Anyone expecting production to move back to the UK is being naïve. It's more likely to move to another Asian country when China gets too expensive.

 

 

 

Jason

More likely China will keep the technology, push out its owners and take it on themselves.

Fat chance the moulds would leave China, even in pieces in a skip.

Edited October 19, 2017 by adb968008

[Legend]

If you are looking at Kader's consolidated accounts, then they will be for the entire global group including Bachmann. So, revenues are sales by the group to external customers, not sales from one group company to another, which are eliminated on consolidation as consolidated accounts present what the group as a whole does with everyone else, not what goes on between companies in the group. Also, the staff costs will be for the global group.

I only used it to get an indication of % labour costs . My main point being that labour costs in the UK are considerably larger and as Jason points out i used the minimum wage to make comparison it's more likely the labour would be semi skilled which makes the comparison even worse.

 

So, as said, anyone expecting to bring anything involving significant manual labour back to the UK is deluding themselves , not that I'm going soft on manufacturers!

Edited October 19, 2017 by Legend

[adb968008]

I only used it to get an indication of % labour costs . My main point being that labour costs in the UK are considerably larger and as Jason points out i used the minimum wage to make comparison it's more likely the labour would be semi skilled which makes the comparison even worse.

So, as said, anyone expecting to bring anything involving significant manual labour back to the UK is deluding themselves , not that I'm going soft on manufacturers!

Railroad wagons, coaches maybe.

 

Track too (after all Peco do) and they are hiring...

http://www.peco-uk.com/page.asp?id=jobs

 

let’s not forget Dapol and their investments.

 

Simple stuff that’s cheap to assemble, or automated can be done here.

It’s only the manual intensive stuff that’s expensive.

 

Of course if 3D with super detail and Excellant paint finish comes affordable.. then we don’t need China or any manufacturer, just parts suppliers for the chassis, motors and wheels.

Edited October 19, 2017 by adb968008

[Western Dave]

Railroad wagons, coaches maybe.

Track too (after all Peco do) and they are hiring...http://www.peco-uk.com/page.asp?id=jobs

let’s not forget Dapol and their investments.

Simple stuff that’s cheap to assemble, or automated can be done here.

It’s only the manual intensive stuff that’s expensive.

Of course if 3D with super detail and Excellant paint finish comes affordable.. then we don’t need China or any manufacturer, just parts suppliers for the chassis, motors and wheels.

lLabour costs in China are way way below ours and will remain so. I import finished manufactured product from China (nothing to do with railways or modelling) and their labour costs are about 18-22% of ours. They work 10-12 hours a day 6 days a week for about 47 weeks a year including all holidays and bank holidays! NI and pension equivalent is zero to minimal making them highly cost advantage and business costs like rent and rates are a fraction of ours. With UK wages incrasing year on year as well as pension increases added to increased rents and business rates it’s a pipe dream to bring production back home in any great numbers. Plus remember it’s a numbers game if you start to pull too much away you become too small a player for them to want to work with you or be responsive and competitive. Once you have made the move it’s very difficult to come back. Basic truth it’s its too expensive in the UK to do business.

[Coryton]

. Basic truth it’s its too expensive in the UK to do business.

 

That rather depends on what the business is...

[Clive Mark]

Having read the recent posts on this thread, I am reminded of what I saw last year when visiting Gaugemaster's shop at Ford near Arundel and looking in their Continental showcases for both 4mm and 2mm scale products by Fleishmann, Roco and the rest.

 

Most locos seemed to be well over £300 AND they have not progressed in quality or finesse for thirty years?

 

Loco driving wheel flanges and spokes are no finer than what we get now on British outline and a lot of boiler piping is moulded instead of separately added.

 

Remember thirty to twenty years ago when we ALL whinged....."why can't we have steam locos like that German stuff?"

 

Well we do now and in fact we are getting products that are vastly superior to that continental stuff!    .......AND at half the price (including some of the amazing latest increases).

 

I think putting it in that perspective we really are moaning for the sheer enjoyment of it.

 

You only live once ! If you like it .....get yer money out and enjoy the best RTR products we have ever had.

 

I think I might exclude Hornby's Seaforth Highlander (£189.99) from that though ! Looked at the box today at AC Models.

 

Hornby seem to think they can stick an extra £20 on over "The Ranger" priced at a mere £169 by presenting it in "The Final Day" mode.

 

Very cheeky. Will it backfire ? Will we see "Seaforth Highlander" dumped....oops....I mean discounted by 50% in a years time ?

Edited October 19, 2017 by CLIVE MARK

[PM47079]

At the risk of sounding like a broken record...

 

Hornby need a consistent core range.   which must include high and low spec Mallard, Flying Scotsman and Tornado.  Current mainline trains (HSTs/Pendo/800) as affordable sets, consistent Thomas stock, dare I say it, pecketts?  All available, all the time.  

 

The Lima HST for example, is a reasonable model.   Slapping Virgin East Coast colours on it may not be prototypically correct, but a lot of 10 year olds and their dads won't care.  Its an HST that looks like the one they went to London on, and its under £100.

 

They also MUST MUST MUST look at the prices of their accessories.   these have been subject to broad-brush-beancounter price increases for years and years and years.   A plastic platform section (RRP £6.99) or point motor switch (RRP £11.49) should be no more than £2.50 - £3.50 each.    Economies of scale would quickly kick in if these were appropriately priced.   I sell maybe 15 or 20 point switches a year.   If they were £3.50 each, I'd sell that many, perhaps more, every week.  as it is the sales go to Expo or Peco instead.

 

I asked the marketing director last year if he has ever gone around and evaluated the phyiscal product in his hand before looking at the RRP (in this case a plastic platform section) and he said no.    I suggested it would be a worthwhile exercise - do all of the products they sell command the prices suggested?

 

 

Some of the recent product decisions astonish me.  Why, for example, was the railroad class 90 released in Mainline livery (Which no-one really liked at the time the real locos were built) when it could have been Freightliner, or EWS or Greater Anglia?  Why is the GWR HST a limited edition?   Why not paint some Mark 4s to go with the VEC 91s they made?

Why are they not increasing production runs of Pecketts?   Why not re-release the items that really are selling, or which will compliment other products in the range?

 

Hornby should also follow Bachmann in reducing output.     The market is close to a precipice of diecast bus proportions, especially as models from the 2000s are now coming back into the market in larger numbers, models are not thrown away as often, they have residual value and the used market is burgeoning - sales of used models have boomed, stripping sales of new models to a fraction of the volume of only 5 or 6 years ago.

 

A shake up of pricing, rationalising ranges, introducing some consistency and cutting down on deep discounts would all help (in my opinion)

 

But what do I know?

You are dead right about the class 90. A Freightliner grey one would have been a sensible choice for a railroad model. There are still 3 in the grey and they have carried that livery for a whopping 20 years and you can bung them on Freightliner wagons, GNER coaches virgin coaches etc. Surely a 20 year timespan is more useful than the short time the mainline livery on the 90s lasted which was I think about 5 years

[Chamby]

 

Well we do now and in fact we are getting products that are vastly superior to that continental stuff!    .......AND at half the price (including some of the amazing latest increases)......

 

 

I think I might exclude Hornby's Seaforth Highlander (£189.99) from that though ! Looked at the box today at AC Models.

 

Hornby seem to think they can stick an extra £20 on over "The Ranger" priced at a mere £169 by presenting it in "The Final Day" mode.

 

Very cheeky. Will it backfire ? Will we see "Seaforth Highlander" dumped....oops....I mean discounted by 50% in a years time ?

Think there will be discounted Black 5’s around well before a year - there’s a lot of versions appearing all of a sudden. And Hattons still have the Bachman early totem version available for under £90. It’s not hard to renumber/rename them either.

 

Re: the continentals, they still knock spots off the UK stuff when you look under the bodywork. As a recent returnee to 4mm from a couple of decades modelling 3.5, I have been surprised how primitive the British stuff is underneath, especially re: motor quality and the flimsiness of its mounting.

[40F]

 And Hattons still have the Bachman early totem version available for under £90.

 

 

Bachmann don`t make a black 5

[phil-b259]

Think there will be discounted Black 5’s around well before a year - there’s a lot of versions appearing all of a sudden. And Hattons still have the Bachman early totem version available for under £90.

 

That would be a Riddles designed BR Standard 5MT class loco, NOT a Stainer 'Black Five'

[phil-b259]

That rather depends on what the business is...

 

Quite.

 

However the brutal truth is that for manufacturing to be a viable manufacturing business in the UK, the product being produced requires:-

 

A high degree of automation / robotic assembly if it is a mass produced item

Be something highly at the cutting edge of technology where the UKs R&D or University links are attractive

Be something connected with military requirements where it is necessary to keep it away from foreign Governments

Be something where the price of the item is irrelevant either because either buyers are so rich they don't care, or because it is a 'must have' for your target audience

 

 

Model railway items - particularly models with lots of fine detail that needs to be fitted by hand, do NOT fall into these categories and those believing that bringing production back to the UK for anything other than the most basic of items needs to wake up to reality.

 

Like it or not the Britain of the 1950s / 1960s / 1970s is NOT going to return - its called globalisation, a policy enthusiastically adopted by Governments of all colours for the past 3 decades..

[Chamby]

Bachmann don`t make a black 5

Standard Class 5 then, if that makes you happy. Which is an iteration of the Stanier 5MT, is it not? My point was about the very significant price differential for what is a very similar model - that still stands.

[phil-b259]

Standard Class 5 then, if that makes you happy. Which is an iteration of the Stanier 5MT, is it not? My point was about the very significant price differential for what is a very similar model - that still stands.

 

And?

 

BMW and Audi both compete for the same segment of the car market - but are priced differently.

 

Yes if you are not particularly bothered about the specifics you may simply go for the cheapest, but if you specifically want for a BMW then the fact anything else may be cheaper is a complete irrelevance.

 

Most modellers like to recreate a particular time period or location - in which case the selection of motive power will be determined by what was actually used on the real thing. Thus no matter how 'similar' a Standard 5MT and a Stannier 5MT may seem in appearance they are NOT interchangeable.

 

At the end of the day, model railways are no different to any other consumer product and its rather tiresome that somemodellers seem to think they should be. The price Hornby / Bachmann / etc will charge for their products will be designed to extract the optimum amount of revenue possible. The fact that two similar-ish products may have significant price variations between each one is an irrelevance - if you wish a particular model then you have to pay accordantly

[The Stationmaster]

I only used it to get an indication of % labour costs . My main point being that labour costs in the UK are considerably larger and as Jason points out i used the minimum wage to make comparison it's more likely the labour would be semi skilled which makes the comparison even worse.

 

So, as said, anyone expecting to bring anything involving significant manual labour back to the UK is deluding themselves , not that I'm going soft on manufacturers!

 

My former next door neighbour and his brother have established a watch factory locally - in the Thames Valley where housing is expensive and wages are well up the scale.  Originally the imported the movements from Switzerland but many (most?) are now made here and they produce between 8,000 and 10,000 watches and small clocks per annum according to one website (not theirs).  They are expanding production and employment and will open a new, larger, factory in the next couple of years.

 

Sounds great doesn't it. But, and this is a massive BUT, they have done their marketing very carefully and obviously set it against the way their cost base will inevitably work (obvious really if they intend to succeed) and that reflects in their prices.  The cheapest price I can find for any of their watches is £2,850, at the other end of the scale their prices - for a wristwatch - go over £30,000.   In other words they recognise that to work at UK manufacturing cost levels you have to produce an upmarket product which can be priced to give a decent return on investment and cost.

 

Now translate watch manufacture, with lots of small precision parts, to model railway manufacture - ok not so precise but still lots of small parts to assemble so a fairly high labour cost component.  If you want cheap (whatever that means) mass market r-t-r you aren't going to see it made in Britain until wages and costs fall through the floor.

[brushman47544]

If it's cost effective to make some of the quick fit Airfix kits in the UK, wouldn't it be similarly cost effective to make things like Hornby's plastic station platforms where there is little to no hand assembly required?

[Coryton]

My former next door neighbour and his brother have established a watch factory locally - in the Thames Valley where housing is expensive and wages are well up the scale.  Originally the imported the movements from Switzerland but many (most?) are now made here and they produce between 8,000 and 10,000 watches and small clocks per annum according to one website (not theirs).  They are expanding production and employment and will open a new, larger, factory in the next couple of years.

 

Sounds great doesn't it. But, and this is a massive BUT, they have done their marketing very carefully and obviously set it against the way their cost base will inevitably work (obvious really if they intend to succeed) and that reflects in their prices.  The cheapest price I can find for any of their watches is £2,850, at the other end of the scale their prices - for a wristwatch - go over £30,000.   In other words they recognise that to work at UK manufacturing cost levels you have to produce an upmarket product which can be priced to give a decent return on investment and cost.

 

Now translate watch manufacture, with lots of small precision parts, to model railway manufacture - ok not so precise but still lots of small parts to assemble so a fairly high labour cost component.  If you want cheap (whatever that means) mass market r-t-r you aren't going to see it made in Britain until wages and costs fall through the floor.

 

On the other hand....Swatch watches are made in Switzerland and don't sell for £thousands.

 

But I believe they come into phil-b259's category of highly automated manufacture.

[The Fatadder]

If it's cost effective to make some of the quick fit Airfix kits in the UK, wouldn't it be similarly cost effective to make things like Hornby's plastic station platforms where there is little to no hand assembly required?

I was thinking much the same that at some point there is a breakeven where it will make sense to manufacture simple toolings with no / minimal assembly in the UK (or more likely in eastern Europe). (the platforms being a good case in point) 

I guess the problem is that while it would almost certainly make sense doing it now from scratch, it doesnt make financial sense when you consider the extra sales available at the lower unit cost vs the cost of creating a new tooling etc.

 

That said (and rather straying from the point somewhat) I suspect we may well see a return to UK manufacturing from the likes of Hornby et al when modern manufacturing techniques such as ALM have further refined to mass production levels.  if you think of a Hornby steam locomotive with lots of extra parts added by hand in China, from what i have seen of ALM in the aerospace sector (and the drip down of these advances elsewhere), I dont think we are that far away from the point where it can be used to make a steam loco with all the separate bits in a one shot process (at a relatively competitive price).  

[melmerby]

On the other hand....Swatch watches are made in Switzerland and don't sell for £thousands.

 

But I believe they come into phil-b259's category of highly automated manufacture.

The whole idea of the Swatch was a lowest cost Swiss product at a time when costs in the industry were rising dramatically and jeopordising their market.

 

Keith