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Bailey Profits Down


Tandem Man
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I found the following quote interesting :-

 

" However, although demand was strong for our motor homes, demand for caravans was weak, particularly in the family sector. "

 

Bill

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They have also been spending a fortune building new factories and total revamp of the production facilities. All of which comes of the account before profit line so not surprised.

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Look carefully it's FY ending December 2014. At that point the U3 had barely come on stream & they'd be carrying the devlopment costs if it. Pegasus was long in tooth. For companies with many product lines, these things smooth out - but in essence Bailey only has 4 so it will be material.

 

What's telling (probably for the sector as a whole) is margin is <5%.

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I expect that 2015 will be a better year because of the U3 sales. I am told that a high proportion of caravan sales are Unicorns so the year following the introduction of a new "series" can be expected to be more profitable.

 

My Dealer has recently started selling Coachman caravans as well as Bailey as most of his sales are Unicorns immediately following the introduction of a new "series" so he needed something to boost sales during alternate years.

 

Bob

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They bring a revised range out every autumn!Each of the three ranges has a three year cycle. This year it was the Pegasus.

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I don't think weak demand for caravans is true, more like demand declined due to Bailey reducing caravan production in lieu of motorhomes, leading to a lack of caravans at dealers and long waiting times for a factory build.

 

It would be interesting to see how much warranty work/rework costs them.

 

Surely it is cheaper to produce less products but to a higher standard rather than chuck any old rubbish out, and hope for the best?

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Unicorn 3 has been a massive sales success for them.

 

Please do not think that warranty claims are a drain on their finances. They are not, but they are a drain on ours, as the expected cost of an average claim is built into their pricing structure, as it is for every other manufacturer.

 

It is the customer who pays, you just do not see it.

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It could be said that the guy who was the first owner of my van paid for the new roof I had fitted a few weeks ago. Maybe I should write and thank him :unsure:

I've got nothing to do on this hot afternoon

but to settle down and write you a line.

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Unicorn 3 has been a massive sales success for them.

 

Please do not think that warranty claims are a drain on their finances. They are not, but they are a drain on ours, as the expected cost of an average claim is built into their pricing structure, as it is for every other manufacturer.

 

It is the customer who pays, you just do not see it.

 

Hi Alan. I am sure that there are some manufactures that must surely be skating on thin ice by now unless of course they are paying their dealers absolute buttons to rectify the issues - many of which are constantly being spoken of on this and the many other forums.

Life in general can be a journey of chance with some winners and sadly some losers. Your outfit can never be left to chance. A short-while carrying out essential checks can ensure a long-time of happy & safe caravanning for all concerned.
Ignorance can often be bliss but is certainly not an excuse and when continually disregarded they can be totally disastrous for oneself and the innocent parties.

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Back to making more motorcaravans instead of caravans, if that were the case the turnover would increase considerably instead of going down, since one costs about twice as much as the other.

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All of the above being guesses as none of you work in bailey accounts department or are directors of the company.

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Back to making more motorcaravans instead of caravans, if that were the case the turnover would increase considerably instead of going down, since one costs about twice as much as the other.

Depends on the margin, though. Motor homes cost more to buy, but of course they have the base chassis, engine, etc to buy in.

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All of the above being guesses as none of you work in bailey accounts department or are directors of the company.

 

Correct but it cannot make good financial sense to have to stop production to carry out warranty repairs, they need to make room on the production line to free up workers to do things like roof replacements, at least the last time we were at the factory and asked about it (and first hand from friends that have had factory repairs in the last year) that was still the case.

 

They are victims of their own success and have a shortage of factory space and production capacity (something they are looking to improve), so its not as if they can set up a separate warranty line, so warranty repairs do impact on the bottom line(1 caravan produced less a week is around £750,000 of lost income @ 15k/unit over 50 weeks).

 

Of course I do not know if they run production 24/7 (I don't think they do) but obviously that is one way of making more use of existing infrastructure, although the location might prevent 24/7 operation.

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Unicorn 3 has been a massive sales success for them.

 

Please do not think that warranty claims are a drain on their finances. They are not, but they are a drain on ours, as the expected cost of an average claim is built into their pricing structure, as it is for every other manufacturer.

 

It is the customer who pays, you just do not see it.

When we bought a new van from a maker in Lancashire we heard a whisper that they ( at that time -2012 ) allocated £ 2,700 per van--- we certainly got our moneys worth . ..........................

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Unicorn 3 has been a massive sales success for them.

 

Please do not think that warranty claims are a drain on their finances. They are not, but they are a drain on ours, as the expected cost of an average claim is built into their pricing structure, as it is for every other manufacturer.

 

It is the customer who pays, you just do not see it.

That's illogical.

If they had no claims the profits would increase.

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That's illogical.

If they had no claims the profits would increase.

 

It may be illogical, but if you were a caravan builder would you not include potential warranty claim costs in your trade price? If, by some amazing stroke of inventive genius there's a sudden reduction in warranty claims then you make additional profit, but you have to be pragmatic and can't count on it happening.

I've got nothing to do on this hot afternoon

but to settle down and write you a line.

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It was widely reported at the time that unforeseen warranty claims was the cause for the demise of Avondale. The practice of including an element of expected warranty costs into a product is standard industry practice throughout the manufacturing world.

 

Indeed insurance policies are available to cover against heavy unexpected claims.

 

Any manufacturer that does take these costs into it's wholesale price risks not being in business very long.

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They bring a revised range out every autumn!Each of the three ranges has a three year cycle. This year it was the Pegasus.

 

 

This is true, but as I said the Unicorn range is the big seller. My Dealer certainly relies on the Unicorn (and now Coachman).

 

Bob

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Back to making more motorcaravans instead of caravans, if that were the case the turnover would increase considerably instead of going down, since one costs about twice as much as the other.

That would be the case if they made as many motorhomes as they did caravans but I suspect caravan sales are far higher. I saw a report somewhere that Bailey intended to build 1000 motorhomes, which is a lot given the total size of the UK motorhome market of around 8000 units a year but starting to grow. I have no idea how many caravans Bailey make but wouldn't be surprised if it was not in the region of 5000 to 8000 a year? It seems Bailey have been responsible for a lot of caravanners changing over to a motorhome.

 

David

David - Milton Keynes

Bailey Alliance 66-2 Motorhome for holidays and a Kia Venga for home.

 

Caravan Travels

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Not really Klyne,even if they made just one extra motor home and one less caravan their turnover would increase because the cheapest motor home is much dearer than the dearest caravan.

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Correct but it cannot make good financial sense to have to stop production to carry out warranty repairs, they need to make room on the production line to free up workers to do things like roof replacements, at least the last time we were at the factory and asked about it (and first hand from friends that have had factory repairs in the last year) that was still the case.

 

They are victims of their own success and have a shortage of factory space and production capacity (something they are looking to improve), so its not as if they can set up a separate warranty line, so warranty repairs do impact on the bottom line(1 caravan produced less a week is around £750,000 of lost income @ 15k/unit over 50 weeks).

 

Of course I do not know if they run production 24/7 (I don't think they do) but obviously that is one way of making more use of existing infrastructure, although the location might prevent 24/7 operation.

I cant answer that as i have no detail of their operation, you seem to to know a lot though, or are you just guessing based on your own caravan manufacturing business?

No i didnt think so, you gave no facts at all, so why say anything at all?

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I cant answer that as i have no detail of their operation, you seem to to know a lot though, or are you just guessing based on your own caravan manufacturing business?

No i didnt think so, you gave no facts at all, so why say anything at all?

Because it's a forum? As in, you express an opinion?

 

If everything was based on fact and not opinion, life would be boring would it not? After all, facts are the base of opinions slanted to suit the person putting forward that view?

 

I don't mean this personally and I am not digging at you Nigeldill, I found it a useful post nwatson made.

 

Let's face reality, if only facts were put forward the Daily Mail and others would be out of business.

 

Back on topic, I hated working nights!

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From my experience.

Avondale Leda Chiltern = 15 faults
Swift Challenger 440/4 = 20 faults
Bailey Senator Vermont = 25 faults
Bailey Unicorn Valencia = 40 faults.

So if the price is indeed a reflection of failures or warranty work, from my experience the Avondale should have been the cheapest, and the Bailey the most expensive. And Baileys reputation would be shattered.
So I think that other factors also determine which company goes bust.

Its ironic that the 1997 Avondale we had was with out doubt the best built, least problematic, and the nicest to look at. Its construction layout was also 10 years in front of its rivals.

Does a central gas locker and a recessed wheel well feature on any caravan today?
And who in recent years copied Avondale with a central gas locker.

No I believe one factor that helped with Avondale's demise was naff interior colour schemes, apart from the model we had, not one other Avondale was attractive to us.

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