What’s wrong with our Dealers?

[Dustydog]

There appears to be cause for concern for our Dealers.
Why are so many in a precarious position or failing due to rather dubious buy outs?

Others seem to be struggling .

A number all around the UK have been mentioned on here this week .

Is it the too demanding Customer🤔

The poor quality product supplied by the Manufacturer?
My own local main dealer employs a full time Warranty Manager! That’s telling you something.

Low Labour charges paid by the manufacturer for repairs to their products?

Decline in caravanning?

Too many CRA claims by us😜😜

What next I wonder?

 

[otherclive]

Perhaps high interest rates, cost of living increases and over supply could be an issue. Recent media reports show big ticket items sales were much reduced. Plus your comments are applicable too. Modern caravans are expensive and in many facets caravan isn't the low cost hobby that drew many of us to buy into it.

 

[Dustydog]

Spot on, the low cost hobby! The used market appears buoyant.
But an August pitch at CAMC Treamble is over £50 a night. Not bad for a family perhaps?
Whilst we have in the past always bought new I really can’t consider spending £46 k on a new TA Coachman🥲.

 

[woodsieboy]

I am not sure this is an exclusive leisure industry problem, Dyson has been mentioned elsewhere, along with Carpetright, and also Poundland are said to be considering their options regarding shop locations. There is the cost of living, higher interest rates and the use of the internet,as well as the multiple choices where to spend money. I know from friends currently in Turkey that they spent a considerable sum to go all inclusive and get away from our summer, others have given up caravanning and or in some cases camping, in favour of foreign sun. If caravan dealers have not sold 23 and 24 models , and manufacturers are pressing them to order 25 models, there will be an inevitable log jam, and in order to shift new old stock prices need to be reduced and that has an impact on margin, and if a trade in has been agreed that just replaces a new caravn with a used one on the stock sheet. Dealers ideally need new caravanners with no trade in who buy on finance, and I suspect they are thin on the ground, additionally if potential customers do not visit dealerships, the dealers need to rely on advertising, and I suspect that if money is tight no amount of advertising is going to get potential customers through the door. I do not see the number of new cars on the roads either, so are the car dealers feeling the downturn , but being protected by the manufacturers? We hav e a small busines and since Covid we see less customer visits, although the average spend is up , but when talking to customers they say they come less often and stock up, as they spend less on fuel and less time away from their own business, they also refer to energy costs, rent and rates and the increase in the living wage, and maternity leave,it feels like a perfect storm, although we have been here before after the banking fiasco, and as always there are winners and losers, it is frightening to look at company accounts available on Gov Uk and Companies House, and see the indebtedness that many companies have to the banks, some must be very close to the edge.

 

[woodsieboy]

In a small town there are 4 barbers, each barber does 20 haircuts a day for 5 days at £10 each, so each barber takes £1000 a week, then the local factory announces job losses, so the men from the factory have to cut back and instead of having their hair cut every 4 weeks they have it cut every 5 weeks,so now the barbers have the same number of customers but they come less often,so instead of 13 visits a year they visit 10 times so each customer spends £30 a year less,so each barber is down £10400 over the year. Then the council close the main road through the town to install a cycle lane and the road is closed for 6 months each barber loses 1 customer a day due to the closure, so is another £50 a week down,over the six months each loses £1200,now the barbers don't have high overheads but it means they have less money to spend in the town, knocks on to the local newsagent, betting shop, convenience store,and some of the local shops close and are empty. So the Council realise that something must be done and they offer grants to new businesses to take on the empty shop, so they allow a new Turkish barber to open,which gets rid of an empty shop, but now there are 5 barbers in the town, the existing barbers now see the cake cut 5 ways instead of 4 so they are now down again, so one of the barbers reduces his prices to attract customers,and it works, but now he is taking less from each customer so woking harder for less. Also the other barbers see what has happened and one increases his prices and does less customers but becomes more profitable, another reduces his opening times to reduce some of his costs,but all is not lost, one of the others retires, so we are back to 4 barbers, and an empty shop, so the Council realise that the grants to enourage new business have to be paid for so they increase the business rates on the barbers shops, so the barbers put their prices up , so the men come every 6 weeks instead of 5, you can see where this is heading, for barbers substitute any small business, Time to get a haircut perhaps?

 

[Buckman]

I don't think many people can afford or want to spend over £40k on a caravan. Better to buy the same similar caravan a second hand at a much reduced priced with many of the issues resolved. Cost of pitches is not helping either even on CLs.
A CL that we started using way back in 2005 was £15 and it was expensive then and you had to book at least 6 weeks in advance, but over the years the price has increased and now it is £25 a night and you can book a few days before you arrive.

Before Covid to book CAMC New forest during August you had to book several or more months in advance. Yesterday I needed to change a booking and was able to book a full week in mid August on a fully serviced grass pitch no problem.

 

[GaryB]

Maybe there's also a decline in the "caravan enthusiast" population? The younger generation just don't seem as interested in hauling a holiday-box behind the car in the rain when they can jet off to somewhere hot for less money. Owning/towing/using a caravan requires a certain level of DIY-competence (not necessarily fixing things, but the connection of services, emptying things, levelling etc) are second nature to most of us, but some of what we take for granted is just alien to the younger generation. My daughter and her friends would never consider owning a caravan, but all of them are in a position where actually buying one is going to be financially out of the question for many years.

 

[CustardAvenger]

I saw the now locked post on Broad Lane Leisure, my supplying dealer, and it appears they now in administration and are no longer trading. They were originally based in Coventry, [on Broad Lane] and until recently had re-acquired their original site, but now appears to be an Enterprise Rent-a-car site. I dealt with the Kenilworth branch and they were great, until my last interaction in January, when my caravan window was damaged during a service.

The small offside kitchen window looked like it had been side-swiped, but nothing else was touched; I had photographic evidence of my caravan leaving home undamaged, and the c.20 mile drive was clear of any obstacles which could have hit the van. But they still accused me of hitting something/putting it through a hedge and refused to even concede it could have occurred at their narrow, overcrowded site. They 'fixed' it, by buffing the acrylic [leaving a single scratch, as an F-U?] as I refused to leave with caravan. Perhaps they were aware of the impending difficulties and this was reflected the way I was treated.

@GaryB You're spot on. Caravanning isn't a cheap holiday anymore, and a GRP box on a gravel pad in a field is not Instagram worthy... Crocs are in though! I've owned my 2018 caravan from new, and the equivalent 2024 model list price is nearly £10k more than I paid at the NEC show. I don't earn 40% more! Plus site fees for CAMC sites are mental. After the opportunity for a seasonal pitch dropped in our lap, I've now switched as touring is a hell of a lot of work. Just getting the caravan from its storage position to arriving on site is a mission, and then pitching/levelling/Awning/connecting services puts me right off any kind of 2-night weekend 'break'.

 

[CustardAvenger]

I don't think many people can afford or want to spend over £40k on a caravan...

When I was looking to buy, £35k would get you the biggest, most expensive, flagship twin axle regular touring caravan you could buy in the UK [ignoring Airstreams]. I saw this outside a house a few weeks ago... £51 grand.

 

[GaryB]

It's not just the caravans that have rocketed in price, something to pull it with is also on the upwards track. I'm considering changing my Volvo V90, I've had two, list prices of the one I had and have and the latest model are:

2018 V90 D4 - £39,995 bought as ex-demo for £24,500
2022 V90 B4 - £42,750 bought as ex-demo for £32,500
2024 V90 T8 - £64,950 wouldn't buy one!!!!!

Yes, the powertrains are different but all are the "entry level" versions (only the plug-in hybrid is available now).

Other flavours are available, but from what I can see, price wise, the only way is up.............

 

[shouldknowbettor]

the Council realise that the grants to enourage new business have to be paid for so they increase the business rates on the barbers shop

Business the size of a barbers probably doesn't pay business rates. It's a myth that small businesses get hammered by rates. I mean it depends on your definition of small of course, but a barbers? No rates to pay.

Just sayin'

 

[otherclive]

It's not just the caravans that have rocketed in price, something to pull it with is also on the upwards track. I'm considering changing my Volvo V90, I've had two, list prices of the one I had and have and the latest model are:

2018 V90 D4 - £39,995 bought as ex-demo for £24,500
2022 V90 B4 - £42,750 bought as ex-demo for £32,500
2024 V90 T8 - £64,950 wouldn't buy one!!!!!

Yes, the powertrains are different but all are the "entry level" versions (only the plug-in hybrid is available now).

Other flavours are available, but from what I can see, price wise, the only way is up.............

I recently read that EV batteries are in a global surplus due to reductions in material and manufacturing costs, combined with lower demand than anticipated. Net result is that battery prices have nearly reduced by 50%. This may help to slow price growth down, or even reduce prices. Something strange is also happening in the used EV market in that our local Kia dealership has 9 pre owned Teslas, all with low mileage and at prices well below a new Corsa-E. Plus a Polestar 2 at £20000. Some Lexus are loosing 66% value in three years, not the norm for Lexus. With used prices falling it may be consumer lack of confidence that is an issue.

 

[CustardAvenger]

It's not just the caravans that have rocketed in price, something to pull it with is also on the upwards track. I'm considering changing my Volvo V90, I've had two, list prices of the one I had and have and the latest model are:

2018 V90 D4 - £39,995 bought as ex-demo for £24,500
2022 V90 B4 - £42,750 bought as ex-demo for £32,500
2024 V90 T8 - £64,950 wouldn't buy one!!!!!

Yes, the powertrains are different but all are the "entry level" versions (only the plug-in hybrid is available now).

Other flavours are available, but from what I can see, price wise, the only way is up.............

c.2019, I looked at the new prices of Volvo V60s, and the PHEV version were significantly more than regular ICE versions then. Seem to recall the same ratio as your V90 example, low 30s for a diesel, low 50s for a T6 Petrol PHEV with some options ticked.

I see Volvo has reversed their decision to not sell estates in the UK, but I can't afford a new PHEV even though it would be perfect vs a pure EV for my use case.

 

[woodsieboy]

Business the size of a barbers probably doesn't pay business rates. It's a myth that small businesses get hammered by rates. I mean it depends on your definition of small of course, but a barbers? No rates to pay.

Just sayin'

In my post I said for barbers substitute any small business, in the case of barbers, some will pay rates some will not.

 

[shouldknowbettor]

Only if they operate across multiple sites I would imagine. Or they're somehow a giant barbers shop. Then they're not really a small business are they? Our local barbers has 8 cutting stations, sofas, a pool table. It's only 2/3rds of the way to having to pay rates.

I get the principle of course, but prices for running small businesses haven't actually increased all that much. Rates (if even paid) are static or slightly up. Gas and water not up by much. Electricity has fallen back to more reasonable levels. Materials costs are variable but most hikes have been unwinding for a while now. Lowest paid workers saw a decent pay hike this year but tbh they needed it. I suspect for most companies what's keeping prices high is that businesses took on loads of debt (at the nigh-on insistence of the govt.) to get through COVID and now we're all paying for it as it has to be paid back, combined with a terrible economic outlook that's been keeping discretionary spending at a minimum for months now. Look at the caravan market for a perfect example of businesses loaded with debt facing a sales crunch and going under.

 

[woodsieboy]

I agree with you to an extent, see my previous post regarding debt loading in company accounts. Not clear how you claim prices for running small businesses havent increased that much, Rates are not static,insurance for vehicles and public and product liability have increased over 50%, Gas and water directly linked to usage, but in both cases up by over 20%, electricity went up by over 50%, fortunately for us we were on a fix that evened out the worst increases. Add in living wage increases.Government defines small business as having up to 50 employees and turnover of 10m, the smaller ones with turnover up to 2 m, and less than 10 employees are classed as micro,between them they encompass most of what the public would think of as small business, as an aside Broad Lane showed roughly 12m turnover and 63 employees, Also need to add in increased diesel prices.service costs, RFL etc I am not suggesting that your barbers shop should be paying rates as they may have a local exemption, but 8 stations means a substatial salon , and the business rates are calculated with regard to the rent payable when calculating the rateable value, also the landlords have been passing on rent increases,in the region of20%, which when used to recalculate rateable value passes on another increase.The biggest increases have been suppliers, especially imports from Ukraine(aluminium products) and anything from China that is shipped by sea, and of course many of the suppliers are small businesses passing on the cost increase they have incurred. These price increases then have to be passed on to customers and when you say material cost increase have been unwinding now, that is not my experience.I know of several businesses that took Covid Loans to stay afloat and are now in danger of folding, as although the loans are at a low interest rate they still have to be serviced, the other effect is that the interest for most businesses is tax deductable, so it reduces the tax payable, but if they fold the tax may not be paid at all even though HMRC is always the lead creditor, so a proportion of the covid loans will inevitably go unpaid. I do not wish to sound all doom and gloom, We have been here before and those businesses that survive, will be stronger, even thougn there may be less of them , say pubs . caravan dealers and any other business that depends on discretionary spend.It is likely there will be less people employed , businesses may merge or sell up, the ones with low debt will be in the strongest position.

 

[shouldknowbettor]

Im sorry thats your experience but its not mine. For example this month is renewal month for our vans and I didn't remember it being expensive. So I checked and it only went up from £652 in 2021 (Per vehicle) to £681 this year, thats < £30 increase over 3 years per vehicle.

I do remember a bit of a jump in our PL etc. but our broker's done a good job of keeping that down. Its harder to tell what is going on there as the business is more involved in the US since 2019 and so our insurance jumps in big jumps with increases in our US turnover.

For Rates below £20,000 (? I think thats the limit, 28k in london) multipliers were frozen at 49.9p in the last budget, while you're right rates have shot up for other, larger businesses, but for small businesses they're static, if they're paying anything of course.
All* businesses are eligible for rates reductions (up to 100%) below certain values. The default for England being 12,500. Even close to London thats a big ol' barbers.

* I think.

The standard multiplier has only gone up 25% in the last 14 years to 2024.

Rateable values on small retail are actually falling as the price of retail shops falls. Overall the RV increase for England was 7% in 2023 which reflects the impact of inflation on rents, but thats heavily skewed towards large warehouses (amazon etc.) and big industry, small business overall seeing static or falling RVs.

Diesel prices likewise, in the last 10 years they've only gone up <10%, well below inflation. Weve seen some pretty wild spikes, and some big dips on the flipside, but its not actually increased very much in 10 years. If you erased the covid period the increase is probably more like 20% over average for that period, but even then its not anything to write home about.

Electricity is as you say still much higher than 5 or 10 years ago, double the price, but unless you're running an electric arc furnace or data centre then just how much of your outgoings is electricity? For us its less than 1% of our total non stock costs.

China shipping is of course still expensive, 4 fold what it has been but at least its not 10 fold anymore! Each year we bring millions of pounds worth of goods in from Chain, Taiwan, Japan, USA and the EU, and while we did see massive hikes in both price and lead time during Covid, all that has fallen back to what you'd consider a 'normal' level now, and while the UK had 20% inflation that really didn't seem to hit most of our overseas suppliers particularly badly, with price increases 23>24 being in the range 2-5% (ie normal).

Dont get me wrong, I'd rather not face any of these cost increases, but its definitely the case that as a smallish business I can't really grumble about increased costs - it was pretty crazy, but now its just not for us. The issue is the decreased spending power of our UK customers. Our overseas markets like the EU and US continue to grow however.

 

[woodsieboy]

I find your reply very interesting as it highlights the differences 'small' businesses encounter, our rateable value is over the threshold and our rates payable have increased every year. Also it is difficult to discount the Covid effect, in our case we were unable to scource some products as they were redirected to NHS, I have no complaints about that but when they became available the buy in price was 3 times the original sell out price.As an example of how much our business has changed, our turnover is 40% of 20 years ago, then we employed 5 people. Now we don't employ anybody, we sub contract anything we need doing to regular reliable people. We also choose the hours we work, and deliberately chose to cull the less profitable customers, after Covid. Bottom line is we work less and are left with roughly equivalent income. allowing for inflation, we are also exclusively UK trade, and are growing at about 9% this year. we don't run an overdraft and most of our capital is tied up in stock, so while we need a certain quantity, we react to cutomer demand and as it is all non perishable,if we don't sell it this week we will sell it next week or the week after, in response to customer need.Good to hear that you have managed to control your costs and good luck with your business going forward.Going back to the original thread it seems to me that the Caravan Dealers are becoming victims because they were unable to react to the downturn, none of us can know what the individual circumstances are but as I have previously said there will be winners and losers, although it is likely that the remaining dealers may feel empowered to restrict brands and increase prices, just my opinion.

 

[Buckman]

Woodsieboy is there any chance that you divide your posts up into paragraphs to make them easier to read? Thanks.

 

[shouldknowbettor]

Now we don't employ anybody

Very wise!

 

[GaryB]

What I am trying to say is Caravans are too expensive for what they are, caravan pitches's are too expensive, care and quality of service are abysmal unless your buying new or over inflated prices

Agreed. Many years ago a touring caravan was seen as a cheap family holiday, a lot of our friends/relatives still think we're tight by having a caravan, the truth is very different. Escalating pitch prices are contributing to pushing caravan ownership away from the younger generation and also those with little spare cash who were the original founders of cheap holidays. I enjoy having and using a caravan but the days of it being a cheap getaway have truly gone.

 

[otherclive]

Probably going to upset a few people here but this is what I have come across in my caravan experience,
I am a bus driver, I work 45 hours a week and I earn £22,000 a year before tax, my wife stays at home to look after my 19 year old severely disabled son, so as a "low income" family we get universal credit ( yes I've heard it all before and been told I'm a benefits scrounger) what I am getting at here is with a mortgage bills another mortgage for gas and electricity.... food, car running costs same as everyone else were not left with much.
so seeing a caravan priced at £35, £40, £50,000 to me is obnoxious, I've saved and saved, it's taken just over three years to save the money to buy a £3500 caravan and you know what? my work colleagues call me posh as I can afford to buy a caravan, the dealer looked down his nose at me as I was buying a "Clearance " caravan, I got no handover, not shown how anything works, I was given a recipt and a set of keys and told it's at the bottom of the car park
What I am trying to say is Caravans are too expensive for what they are, caravan pitches's are too expensive, care and quality of service are abysmal unless your buying new or over inflated prices
I don't care who gets on my bus, they all get greeted with a smile and a greeting, they are all spoken to politely, no one is rushed on or off of my bus.

Thank you for your post and I’d love to see a picture of that Granada.

 

[woodsieboy]

Hey Tony, just remember you will be getting the same weather whatever the price of your caravan, we all started somewhere, and who knows whether your circumstances will change, and if they do and you decide to upgrade your caravn, remember that dealer, because sure as eggs is eggs they will have forgotten you!

 

[otherclive]

Agreed. Many years ago a touring caravan was seen as a cheap family holiday, a lot of our friends/relatives still think we're tight by having a caravan, the truth is very different. Escalating pitch prices are contributing to pushing caravan ownership away from the younger generation and also those with little spare cash who were the original founders of cheap holidays. I enjoy having and using a caravan but the days of it being a cheap getaway have truly gone.

My granddaughter recently had an all inclusive 12 days in Turkey at a nice hotel for just over £700.including flights. We are going to a static in Norfolk in September and it costs £600 for the week. Our last one in Snowdonia was a veritable bargain at £400 for a week. So much so that we nearly didn’t book it as it was much less than the competition.

Holiday and break accommodation in Britain is expensive whether it be hotels, self contained etc. But when I look at similar options in France or Germany I see better options at lower prices , although ferry costs etc need to be taken into account.

 

[Buckman]

Thank you for your post and I’d love to see a picture of that Granada.

What Granada?