Bailey Price Increases due soon

[Dustydog]

Just had an email from a Bailey main dealer telling me a Unicorn Catagena will increase in price by £900+ in 10 days time. About 5%. Seems a bit steep in this day and age.
Are any others increasing their prices?

 

[Raywood]

I thimk it was Swift who recently increased theirs and I suspect the others will follow suit. Most of the bits on your caravan are brought in from abroad so with the fall in the pound these must be costing the caravan builders more. I think all makes will rise soon if they have not already.
5% looks steep but Bailey have been selling on price so probably have less room for manouvre than some but if they all increased the quality and cut down on the need for warranty work they might save the difference.

 

[Lovo]

Hello all.

Surely this must be good news for resale values on pre loved vans...for once!!

Hope so considering our van is approaching one year old.

Tony

 

[Martin24]

Yes it is a bit steep but it's quite a while since they had any increase. I can't imagine why they need to, I've just spent 16p with their on line parts department, that must have helped. I'm still not changing the bungalow overspend has seen to that

 

[otherclive]

This next couple of years will be interesting for caravan sales, as there were a record number of cars pre-registered for September 2016, and in October manufacturing output of cars was down by 1% compared to a year ago. The car makers are now doing pseudo scrappage schemes or other inducements to make us buy their vehicles. I suspect that times will get a bit tougher from hereon, and guess that the caravan makers may also feel the pinch. It will be interesting to see if they can actually make the increased prices stick when it comes to actually making the sale at the dealerships. Some car makers are making less than 2% profit margin on the mass products lines, which for a caravan maker would not be sufficient to develop new products. A case of watch this space.

 

[Raywood]

This next couple of years will be interesting for caravan sales, as there were a record number of cars pre-registered for September 2016, and in October manufacturing output of cars was down by 1% compared to a year ago. The car makers are now doing pseudo scrappage schemes or other inducements to make us buy their vehicles. I suspect that times will get a bit tougher from hereon, and guess that the caravan makers may also feel the pinch. It will be interesting to see if they can actually make the increased prices stick when it comes to actually making the sale at the dealerships. Some car makers are making less than 2% profit margin on the mass products lines, which for a caravan maker would not be sufficient to develop new products. A case of watch this space.

As far as cars are concerned I have had the garage that I bought my car from looking to sell me another which never used to happen so maybe things are getting tight. I would like to change the car as we have had it 4 1/2 years now but I am holding off for a bit until I see if I can tell how hard diesels could be hit if going into city centres becomes chargable. I do not do it a lot but if the costs get high it might mean that diesels become unsaleable.
As for caravans increasing the price might give the dealers more negotiating room but only time will tell but the fall in the pound might just force the prices up..

 

[ProfJohnL]

This next couple of years will be interesting for caravan sales, as there were a record number of cars pre-registered for September 2016, and in October manufacturing output of cars was down by 1% compared to a year ago. The car makers are now doing pseudo scrappage schemes or other inducements to make us buy their vehicles. I suspect that times will get a bit tougher from hereon, and guess that the caravan makers may also feel the pinch. It will be interesting to see if they can actually make the increased prices stick when it comes to actually making the sale at the dealerships. Some car makers are making less than 2% profit margin on the mass products lines, which for a caravan maker would not be sufficient to develop new products. A case of watch this space.

If the caravan industry were working to the same small margins as the car industry, caravans would be a lot cheaper, manufacturing much leaner and fewer defects with better quality management.

There is no doubt there are cost increases coming through not only from general inflationary pressures but also the uncertainty generated by Brexit, but whether 5% is justified is questionable.

Caravan manufacturers production volumes are smaller than car manufacturers, which reduces the potential for economies of scale, but that doesn't mean they can't work more effectively and employ the best production practices.

The car UK car industry had a kick in teeth back in the 1970s and 80s, when Japanese imports proved that mass market cars could be reliable. The key was good Quality Management which used elements of Quality Control and Quality Assurance. The big lesson from this is if you make a product right first time, you production and post production costs are significantly reduced.

The UK car industry learned that lesson, but at the cost of loosing virtually all those famous and familiar names, and control to foreign investors.

But what is interesting is that those companies that have retained or introduced manufacturing in the UK have been able to introduce proper QA systems, and as a result the product made in the UK matches the best in the world. So we can do it!

That should be a wake up call to those companies like caravan manufacturers who continue ignore the way their products let customer down. Zero defect should be the only acceptable target. As suggested above, I don't believe the Caravan Manufacturers are working small as smaller margins as the car manufacturers, and I do think they would have some wriggle room to put increase manufacturing engineering budgets to improve products.

 

[Dustydog]

Good script there Prof but I sincerely hope the UK caravan market doesn't blame Brexit
The like of Alde have invested heavily in their UK plant as have others.
Maybe a good British company should be reinvented to make the foreign bits. Carver maybe

 

[MichaelE]

I'm sure some of the extra car sales are down to people wanting there car before the road tax change in April ?
As for price changes they will all follow? It would be a bit ironic for coachman who have made a big thing of keeping their prices for next year the same as 2016 only for them to increase them.
Brexit sounds like it could be an easy get out for them to increase?

 

[otherclive]

I'm sure some of the extra car sales are down to people wanting there car before the road tax change in April ?
As for price changes they will all follow? It would be a bit ironic for coachman who have made a big thing of keeping their prices for next year the same as 2016 only for them to increase them.
Brexit sounds like it could be an easy get out for them to increase?

My point was that car sales are not rising, as the pre-registered cars are not manufactured against a specific customer order. They occur when the manufacturer continues to make cars and effectively forces their dealerships to take them. The cars are then registered by the dealership who become the first owner. My Subaru was a pre-reg and it had 40 miles on the clock and I bought it in mid April 14 some two weeks after it was first registered. I had the bulk of its 5 year warranty and got a very good trade in and sales discount too. But some buyers prefer to be the first registered owner. Also if car manufacturing in October 16 saw a 1% reduction compared to October 15 it tends to indicate that the manufacturers are cutting back as there has been a strong suspicion in the financial papers that the industry has been in over-supply for most of 2016, and exports to China etc have been facing consumer resistance. The motor industry is so global that changes in one area have an impact elsewhere. How the caravan industry will fare if consumer confidence and spending power falls remains to be seen.

 

[travellerone]

I agree 100% with what you say. Many retailers will absorb the Brexit cost to keep business and Bailey could do the same. I would probably pay the extra if the money all went into design and QA !!

 

[Raywood]

Given Baileys very keen pricing I assume they may be working on very tight margins and do not have the ability to absorb increases.

 

[RayS]

Perhaps the caravan makers should help themselves a bit more by reducing the frequency of model changes and be a bit more inventive with a smaller range of panels and components.
We know the difficulty of getting some spares and this is due in large part to the fact they have too many variants and cannot afford to maintain a spares holding for any significant period of time.
The off-shore oil industry transformed thinking about spares holdings, since you can't hold everything out on a rig and downtime can be seriously costly. Perhaps some of the methodology could be passed down.