Will a RTR business kick off from Eastern Europe?

[34theletterbetweenB&D]

Present supply chain difficulties and prospect of rising prices for RTR produced in China.

 

 What looks like success of the cheap magazine linked OO products.

 

Now surely there is a natural 'next step'?

 

How long before we see products from 'Svarvaltal Vonatok' or 'Paravom Trenuri' hitting the model shop shelves?

[justin1985]

Fleischmann\Roco have already moved their main factory to Romania!

 

Modellbahn TV hat uns in Arad besucht:

[roundhouse]

Shipping from Eastern Europe could potentially be much quicker and cheaper aswell.

 

Would be nice to see a container for Margate being dropped off at Dollands Moor!!

[Multiple identity account]

I think it would be better to shift towards Eastern Europe. There are a lot of positive things to it which have been discussed in a variety of topics. I am not sure if the actual manufacturing cost would be cheaper but shipping would surely be cheaper and quicker. Communicating would be a tad easier. Quality would be better.

[roundhouse]

And import duty would disappear if made in Eastern EU

[Jim Martin]

There is no import duty on model trains. It's a zero rate.

 

Jim

[johnd]

Wondered how long before comments were made on production in Eastern Europe.

 

It just reflects a conversation I had with a NW UK retailer that I wouldn't be surprised if this was to happen, that conversation took place over 18 months ago!

[justin1985]

Given that Bachmann are Chinese owned, I doubt that they will ever move production outside of Asia.

 

I suspect (and this is just speculation) that as Fleischmann and Roco kept production in Germany / Austria until relatively recently, they probably still have design capabilities in house, making it much easier to exploit Romanian production facilities. British manufacturers seem to have outsourced the entire process of CAD design and toolmaking (certainly this is documented as the case with Dapol) which would seem to give them far less autonomy in this respect. Still, with Hornby looking to diversify production ...

 

Do we have any confirmation that model trains are zero rated for import duty? Seems a strange exception, and certainly doesn't seem to be the case for individual orders from Japan etc

[Jim Martin]

Do we have any confirmation that model trains are zero rated for import duty? Seems a strange exception, and certainly doesn't seem to be the case for individual orders from Japan etc

 

I used to do customs valuation for a living (pretty interesting, too: the rules are fairly straightforward but there are a lot of odd issues around exactly how selling prices are built up, contract terms, transfer pricing between related companies, that sort of thing; unfortunately, it's the kind of thing that you have to get out of in the interests of career progression)...  https://www.gov.uk/trade-tariff/commodities/9503003000

 

Imported model trains are still subject to import VAT (although goods manufactured inside the EU in eastern Europe would be subject to VAT at the same rate). When you import privately, you pay that plus the flat-rate Royal Mail handling fee, which isn't an import charge as such, but is levied to fund the operation of the international mail handling facilities

 

Jim

[alfsboy]

Not sure Eastern Europe is cheap enough .Chinese wages are very low still ,even if they quadrupled  they are still very cheap .

[Ian J.]

Bearing in mind that Skoda manage to make equivalent quality cars for VW more cheaply in the Czech Republic than VW do in Germany (and cheaper than other manufacturers here in the UK and elsewhere in Europe) then it is possible, but the question of just exactly how much more expensive than China model railway manufacturing would be remains to be answered.

[Andy Hayter]

Quote

 

Do we have any confirmation that model trains are zero rated for import duty? Seems a strange exception, and certainly doesn't seem to be the case for individual orders from Japan etc

 

Unquote

 

I will back up Jim's comment.  Toys (and I am going to get into trouble again with that word) attract zero duty.

 

Individual imports from Japan will attract zero duty - BUT will attract 20% VAT+ charges by the delivery company (Post Office probably).  It is easy to confuse the two issues.

 

Regarding new manufacture in E Europe, I am afraid I don't see it happening any time soon. 

Distribution costs will not be that much cheaper.  It was certainly the case a couple of years ago that I could ship more cheaply from Germany to China (Sea freight) than from Northern Spain to the UK (Road freight).  Rail was almost always more expensive door to door than road.  Dollands Moor = daydream some more.

[Horsetan]

Given that Bachmann are Chinese owned, I doubt that they will ever move production outside of Asia.

 

..... British manufacturers seem to have outsourced the entire process of CAD design and toolmaking (certainly this is documented as the case with Dapol) which would seem to give them far less autonomy in this respect. ....

 

[Oldddudders]

Bearing in mind that Skoda manage to make equivalent quality cars for VW more cheaply in the Czech Republic than VW do in Germany (and cheaper than other manufacturers here in the UK and elsewhere in Europe) then it is possible, but the question of just exactly how much more expensive than China model railway manufacturing would be remains to be answered.

VW also manufacture in Spain, again more cheaply than Germany, obviously. Renault market a good range of Dacias made in Romania, cheap as chips, with Renault components so the local garage can do the servicing, thankyou. Ford and Fiat make cars in Poland.

 

More analogous to our hobby, affordable, attractive slot cars are still made in Spain, albeit with lower levels of added detail required, compared to OO locos and stock.

[Barry Ten]

Chris Leigh has pointed out that there's already a successful model railway manufacturing business in South America - Frateschi - and that could be another option to explore.

[Taigatrommel]

Mehano have been producing increasingly good models in Slovenia for a long time.

[Ron Ron Ron]

Marklin/Trix moved production of some of their models from China to Hungary when (like lots of other companies) they lost production capacity at Sanda Kan a few years back..

 

http://www.maerklin.com/en/company/hungaria.html

[PhilJ W]

The GBL models are made in Eastern Europe, admitted their quality control is not too great but it could be a sign of things to come.

[34theletterbetweenB&D]

Mehano have been producing increasingly good models in Slovenia for a long time.

Rather than an existing maker contracting with a factory in Eastern Europe, I was thinking more of an independent maker - like Mehano  -  going it alone, rather as Heljan decided to take a punt on the UK OO - and now O gauge - market. 

 

With the distinct possibility that a major retailer whose business is clearly suffering through shortage of supply of goods to sell, might just encourage such a maker into an OO entry by commissioning something or other...

[Derekstuart]

Just as an aside- and it's surprised the hell out of me. Having checked up on import tariffs, yes it is 0.00% rated.

 

https://www.gov.uk/trade-tariff/commodities/9503003000

 

The above is the link to confirm.

[PaulRhB]

Given that LGB were one of the first to try this it's not a guarantee of success. The quality control initially was diabolical! Wonky parts, seized roller bearing wheels, large ballast weights floating free inside smashing the internals to pieces!

When it was investigated the discovery was they were paying by volume in the factory with no actual full check just a quick once over so no accountability back to those rushing the job. Chinese manufacturers will only keep production at home until it's cheaper elsewhere, the factory owners are very good at capitalism, unless there are actual restrictions placed on them by government. One thing that is a big advantage of keeping it inside China though is those that produce knock offs as their intepretation of international copyright is a little flexible

[GordonC]

If the general consensus is that British OO models are underpriced in comparison to equivalent Continental models, then that might discourage new entrants to our market

[Taigatrommel]

The last two continental locos I bought (both last month) have been interesting in comparison to one another.  One was a six axle electric, made by Arnold (Hornby) in China, with an RRP of €190.  The other was a six axle diesel, made by Roco in the EU, with an RRP of €104.  The Arnold loco has a few more parts fitted at the factory (though has moulded handrails), while the Roco one has customer fitted handrails.  I doubt the British market would baulk that badly at a £80 diesel, even if they had to apply the handrails.  They'd probably grumble about the traction tyres (which presumably actually add a small amount to construction costs) and the lack of sprung buffers though!  Much of the continental rolling stock I have bought that's EU made is cheaper than equivalent British rolling stock now.  Compare £46.71 for the pre-order price of a 00 Bachmann Polybulk(38-427) at Hattons against €44.01 (approx £34) for the latest Roco H0 Uacs (67298) at Modellbahnshop Lippe.

[luke_stevens]

Mehano have been producing increasingly good models in Slovenia for a long time.

Several years ago Mehano went into insolvency and now their production now comes from China. It was about the time that Bachmann stopped distributing Megan.

 

Luke

[jjb1970]

I think it is worth considering that the cost to a company like Maersk to ship a 20 foot container from China to Europe is barely in three figures. The cost of the container lifts on and then off the ship is normally higher than the cost to the ship operator of the transit. And given that the cost of marine fuel has imploded it is not a bad time to be shipping goods to Europe from Asia.

 

On China, there are a lot of criticisms to level at Chinese factories but low quality trains is not one of them. Chinese factories revolutionised the model train hobby (and a few other model hobbies) and when Sanda Kan went down the pan it is highly doubtful that any mass produced RTR train producer in the world could beat their product if taken overall. OK things go wrong but that tends to be poor supervision and research by the customer (in this case customer is the "manufacturer") than poor quality production by the factory. The factories make what they're asked to make. For those who question Chinese quality take a look at what is made in China for Rapido.

 

On Eastern Europe it is possible that they could see a large shift to such countries but I suspect it is more likely we'll see a shift to alternative low cost economies in Asia (Vietnam? Myanmar/Burma? India?) than a large scale shift from Asia to Eastern Europe. However I could be totally wrong. Either way it is not returning production to the UK,now that would be something to wish for but I fear we are many many years down the line before that might happen.