Survival plan for niche Aussie RV manufacturers

The Australian RV industry could be almost decimated in the aftermath of the current coronavirus-enforced shutdown unless it starts to think 'big', predicts a successful niche manufacturer.

Explaining the decision to purchase famous Australian off-road nameplates Trakmaster and Pioneer in one of the industry’s most challenging periods, outspoken Track (formerly Track Trailer) director Gerard Waldron paraphrases Bob Dylan by warning a ‘hard rain’ is about to fall on the Australian RV industry.

“Realistically, the Australian manufacturing industry has room for only a dozen RV manufacturers,” he told caravancampingsales in an exclusive interview.

“This will be achieved by consolidation among the survivors, who will inherit the market share of the non-survivors. The immediate impact of adding these two additional product ranges to Track's range provides a path to double our size once we get the 2021 products into the market”.

Is your deposit safe?

Waldron also has a pointed warning for the public dealing with ‘marginal’ brands, saying he was “personally concerned that many of the companies that I predict will not only fail, but will take customer deposits and debts to suppliers with them, damaging the industry reputation and its supply chain”.

Waldron says recent events demonstrate we are part of a connected world. “All Australian industry needs to be genuinely competitive with the world’s best, or it is only a matter of time before somebody eats your lunch.”

The former road and transport research industry advisor says we should consider that Australians now buy more than 1.1 million cars a year – compared with the world market for cars of more than 80 million per year (Toyota alone makes nine million of them) – but can’t support any local car manufacture.

“Yet the Australian towable RV market consisting of caravans and camper trailers is currently around 30,000 units per year, which is only around 2.5% of the car market size!”

Little local RV growth

Waldron says our local RV market is divided in three distinct but roughly equal shares: Jayco, all the other Australian makers combined and imports (predominantly Chinese). While he admits there has been growth in Australian RV sales over the past decade, there has been no real growth in Australian-manufactured RVs, with all the growth in imports.

“So most of the estimated 180 Australian RV manufacturers are not only competing against the world, but realistically simply fighting each other for their share of only around 10,000 units per year, or an average of 55 units/year each!

“This contrasts with Europe, where the annual market of around 125,000 units is mostly supplied by five major manufacturers, resulting in an average 25,000 units/year each.

“Another difference between us and Europe is the EU compliance schemes, which are arguably world’s best practice. However to meet these standards here means additional overheads that in reality are only within the capacity of larger firms.

“While the Australian government has legislated to effectively bring light trailers into a similar compliance regime to that applying to cars and trucks, Australian RV manufacturers, with a handful of exceptions, are really not equipped to compete internationally and therefore will be uncompetitive even at home”.

The Chinese will get serious soon

Waldron says the march of the import growth will be slowed, as the “quick buck importers” discover the compliance issues of the federal RVSA regulations, “but rest assured, the serious Chinese manufacturers will get their act together soon and the market share of imports will likely be sustained or grow in the next few years”.

Waldron says that the small local manufacturers will have a very hard road, not only to achieve and maintain regulatory compliance, but also to be cost competitive with both importers and the larger volume local manufacturers.

“Small is beautiful, but too small is just not an option anymore,” Waldron said. “There’s a critical mass if you want to be competitive and be a survivor.

“Fortunately, there are some discerning customers who are prepared to pay for really high-end equipment, but even these will require regulatory compliance, sophisticated quality systems to ensure reliability and durability and ultimately significant points of difference to justify their investment. That’s where Track fits in.

“We invest in engineering and design at a higher level than any other Australian RV manufacturer. We have four full-time engineers including one with a Phd; another with double degrees; an internationally experienced automotive designer and hugely experienced technicians, before you count the highly qualified engineers in our management team, so we can fund a disproportionately large engineering and design effort.

"This was clearly demonstrated by Track winning the internationally recognised ‘Good  Design Award’ in the Engineering Design category for its T4 off-road caravan range.”

Few local RV manufacturers have foundation to build on

As a result, Waldron says the purchase of Trakmaster and Pioneer from Gason was timely to build on that design and engineering foundation, broaden its offering and incrementally increase its volume.

“We were very pleased to be in the position to do this at what was clearly the right time,” he said.

Under the agreement, the balance of all manufacturer warranty on Gason manufactured Trakmaster and Pioneer products is being delivered by Track’s service business at Outback HQ, which is only five kilometres away from Trakmaster’s previous Bayswater manufacturing facility and has increased staff and service capacity to maintain continuity of service for customers.

Simultaneously, all current new and display stock of Trakmaster and Pioneer models is now available from Outback HQ, alongside other Australian made, off road campers and caravans by Track and Cub.

So, where does this leaves Track in the pecking order of Australian RV manufacturers?

“In my view, we are now at the top of the serious end of the off-road segment, with the expertise and the right model range to not only survive ” said Waldron. “Just as importantly, we are also now big enough to prosper, while maintaining our exclusive, high end reputation.”

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