Australian manufacturers must ‘unite or die’

As many as two thirds of existing Australian caravan and camper trailer manufacturers may not survive beyond 2019 under new accountability regulations set to be rolled out from mid this year.

That’s the prediction of Track Trailer CEO Gerard Waldron, who says the cost and pressure of complying with new ‘Provider’ regulations will drive smaller manufacturers out of business or lead to them being ‘swallowed’ by larger players.

His gloomy predictions come on top of recent news that several long-standing Australian manufacturers have either failed, or are struggling in the current tough market conditions.

Ballina-based innovation leader Kimberley Kampers went into voluntary administration on December 7 last year, with company director Bruce Loxton resigning 11 days later. The company has now entered into an agreement to pay employees’ wages and superannuation in full, however unsecured creditors will only get six cents back in every dollar owed by March 31.

Australian premium hard-floor camper icon, Queensland’s Aussie Swag, announced earlier this year that it was closing its doors after 32 years, apparently another victim of cheaper imported campers that have flooded the local market in recent years.

Then, in early March, Atco-Pickering Metal Industries announced that it was putting its former WA-based Pioneer Campers business on the market, despite winning recent awards for its Mitchell hard-shell Tvan lookalike, with CEO, Hymie Jechilevsky citing “increasingly challenging market conditions”.

More doom and gloom ahead

According to Waldron – who insists that Track Trailer is not for sale and does not have its eye on other industry ‘minnows’ – this news will become increasingly frequent as the new industry regulations bite over the next 18 months.

“Following the end of Australian car manufacturing, the Motor Vehicle Act is currently being updated and the expectation is that the legislation from June this year will tie recall arrangements and ADR compliance much closer to the ACCC watchdog (the Australian Competition & Consumer Commission),” he told Caravancampingsales.

“The major change that this will bring is that RV ‘Providers’ such as importers and their dealers will now primarily be responsible to ensure that the products they sell are ‘Fit for purpose’, rather than the manufacturer.”

Waldron said the cost of certifying products to meet the different State-based regulations for small volume producers will be crippling, both in cost and administration, whereas larger ‘Providers’ will be able to apply and get blanket ‘type approval’.

“This ‘journey’ that smaller players have to face will hit many in the industry very hard, as they will have to fund the cost of audits on individual vehicles or face exposure to major consumer action if something goes wrong during the vehicle’s lifetime.

“Combined with the current very flat market conditions the industry has experienced since mid-last year and the lack of public confidence that occurs when high-profile manufacturers struggle, we are approaching market conditions very similar to those that ravaged the industry in the 1970s.”

Fewer manufacturers in the future

As a result, Waldron says he expects to see a contraction of local manufacturers by around 65 per cent in the 18 months ahead.

“In Europe, where the RV market is much larger than ours, there are now only five major manufacturers and – just like we saw in the Australian motor industry – we will see substantial changes.”

He said the strength will be in numbers for the survivors, with organisations like the Caravan Industry Association of Australia helping local manufacturers to survive by administering of compliance and accreditation issues.

Waldron is also confident that local RV makers that innovate will insulate themselves from the erosion of lookalike imports.

“The copyists can only copy what they can see, which for many manufacturers is already dated, as the top ones are always innovating and designing new models and technical updates.

“So, they end up with a one-dimensional product rather than being able to see what’s in the designer’s mind. As a result, they don’t really understand its DNA.

“The problem is that with the low technical entry point of the industry, you can replicate an existing product with relatively unskilled labour and offer it at a much lower price, but the two items are not the same.

“For example, Track Trailer’s MC2 independent suspension has been acknowledged as the best in the industry and it has been copied, but we have made a number of technical changes to it over its lifespan of nearly 20 years that aren’t reflected in the replicas.

“Many of the ‘copycat’ vehicles are also quite heavy. Most buyers don’t appreciate that ‘adding lightness’ while not impacting strength requires considerable innovation.

“They also don’t appreciate what the liability of a few hundred kilograms or more in a camper trailer will be over the life of the vehicle, not just the greater stress it places on all its components, but also the cumulative effect of the extra fuel required to tow it.”