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Price increase in the close future?


IST

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I have just read this post from Model Rail magazine on FB:

 

"At a press conference in Peterborough this afternoon, Bachmann provided the background to price increases averaging around 20% which come into force from May 1. Reflecting massive increases in 'rent' (the Chinese equivalent of business rates) labour costs, (Chinese law requires a doubling of pay over the next 5 years) and a doubling of transport costs in recent years, the rises will vary across the range, more complex models attracting higher increases. Some examples: The RRP of a two- car DMU goes up by £30 from £114.95 to £144.95, a Class47 from £92.75 to £109.95. The 'E4' 0-6-2T goes up by £10 to £99.95. See Model Rail 197 for a full report."

 

According to this I think we can count on price increasing from every manufacturer. What do you think about it? If this will happen will you change your buyers habit?

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interesting, thanks ist.

 

well while it hurts, i think its good to bring the costs more in line with fairer wages and better, more stable factories/businesses than has been the case in china. small manufacturing in china really is probably the worst on the common worker, with little stability and low wages. those smaller factories also come and go so quickly. my design partner did some product design for office and small home accessory stuff and it was amazing how even the mid size factories would all of a sudden poof out of existence after only a few years. it then takes a lot of work to have an agent line up a new factory and then get to know them and decent production out, so stability on the factory end can mean lower costs on the development and overall production quality end.

 

I love my trains but much of it is made with very inexpensive labor that does need a fairer wage and better conditions and that will mean a higher price. while im not sure my budget will increase to cover this, i do already have a massive pile here and have been trying hard to collect less as i have way more trains than i can possibly play with! 

 

Hopefully this all will lead to an increase in quality overall as well. japan had a similar issue post wwII where most stuff was made with very cheap labor and done cheaply while a few things were still produced with high precision. the made in japan label was seen as a sign it was junk for a few decades there here in the us. once everything including wages and prices lifted the overall quality was back up to a high standard then. it will be interesting to see what happens with china. currently made in china is seen as a junk label here pretty much even if something is made of quality (which it can be if you pay for it).

 

cheers

 

jeff

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Mudkip Orange

I wonder how expensive the Chinese plants have to be for someone like, say, Atlas to return production to the Garden State...

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While its a fairer deal for Chinese workers.  It will be the death of manufacturing in China.  Manufacturers will just move their buisness to other countries that offer the same deal but cheaper wages.

 

South Africa, Mexico, Poland etc are a few examples.

 

Alot of African countries also fit the bill.  But their political unrest creates uncertainty for any business to invest manufacturing into those countries.

 

Either way for Japanese companies, we might see production moved to either Taiwan/South Korea or back to Japan with wages at the factory become closer to parity.

 

Dunno about other regions, but North Americans would move alot of their manufacturing business to Mexico, and European manufacturing could move to eastern Europe.  While wages are higher in those regions, the ability to reduce shipping costs will outweight the wage increases.

Edited by katoftw
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westfalen

Are the Japanese companies like Micro Ace that get their trains made in China saying the same thing or is it just Bachmann?  Bachmann is part of a large Chinese owned toy company with their own factories and should be able to absorb the costs better than other small companies who just contract out to Chinese factories (in some cases actually to Bachmann) to make items for them.

 

There has never been much N scale with 'Made in the U.S.A.' stamped on it apart from Kadee/Micro trains.  Before China it was mostly made in Europe or Japan by and sold under the names of U.S. companies.  Atlas was Rivarossi, Mehano, Roco and later Kato, Model Power was Minitrix, Con-Cor was Kato or Rivarossi, then they found it could be made cheaper in China.

Edited by westfalen
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I've read and heard that a number of companies are moving to Vietnam because of rising costs and the bureaucratic hassles in China.

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