I saw a youtube vid of Atlas still manufacturing in the USA so it IS still possible to make and pay western workers, but with a much bigger target customer base in the USA compared to the UK, possibly this does make it viable.
Hard to come up with a solution, but maybe Dapol should offer their locos in kit form? Take out the bulk of the labour cost and bring the price point down to allow modellers to buy more often and the money paid does not go offshore.
PECO still make model kits for rolling stock at great prices, but the range is rather limited and finishing difficult as they do not seem to include decals (why not?)
DCC etc adds big costs to the model railway hobby when this should be really cheap, Electronics cost VERY little to produce but seems to be a cash-cow for manufacturers who use this to offset their poor profitability on basic plastic injection moulding and assembly. DCC cost should be a very minor addition (say £10) with another £5 for a small loudspeaker for sound.
Where will British model railway manufacturing go?
With Bachmann and Dapol + Hornby all struggling to get new models into the market and make a profit things do look rather bleak. Big Tinplate O gauge does OK at the top end of the market but this is not where most UK railway modellers are focused.
I hope Hornby survive but they need to reduce operating costs and this usually means staff and range of products - a downward spiral. BTW why did Hornby drop the superior and less obtrusive "buckeye" coupling in favour of the old Triang one? In the US miniature buckeyes or similar are used on all gauges and seem to work fine and look better. If you are going for fine model detail sticking on a large obtrusive coupling rather loses the point.
Any thoughts by you guys out there? We are the customers that these manufacturers rely on but they don't seem to have a handle on how to sustain their businesses in the current climate.
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