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When Companies Go Bust.


Thingy

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Ok, so there are some obvious reasons why companies go bust, recession, over expansion, bad management, bad credit handling and so much more, but at the end of the day, a company will go bust if it isnt selling enough product to cover its outgoings. So, when you look at caravan manufacturers that have gone to the wall, e. g Avondale, Fleetwood, is it purely down to not selling enough units and if so, why werent people buying those particular vans. Are any other manufacturers in danger?

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Unfortunately it is not that simplistic - companies can be selling more than enough BUT if they have not got sufficient cash flow and the banks wont tide them over they can be forced into administration (and then liquidation).

 

Cash flow can be hampered by many things such as the need to reinvest in new plant or advance purchase of materials or of course the old one of asset stripping by a 'Parent Company' who want to divert funds to a different enterprise.

 

Take Fleetwood for example - all the indications were that the company was meeting all its targets for sales BUT its Parent Company decided that it wanted out - so that was the end for them, much to my personal disappointment as I was about to place an order for the their latest 2 berth Heritage - still not to worry Airstream gained from their demise.

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I am quite amazed that the UK caraven manufacturers are still much as they were 30 years ago. A great many manufacturers each making a great many varieties of van with UK labour rates.

 

Rather like car manufacturing I think it is ripe for the work to go abroad and it is really just waiting for a decent far east company to setep in the market. Cost of shipping to the uk must be less than the labour costs saved.

 

We are still very much at a cottage industry statage with caravan manufacture.

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I am quite amazed that the UK caraven manufacturers are still much as they were 30 years ago. A great many manufacturers each making a great many varieties of van with UK labour rates.

 

Rather like car manufacturing I think it is ripe for the work to go abroad and it is really just waiting for a decent far east company to setep in the market. Cost of shipping to the uk must be less than the labour costs saved.

 

We are still very much at a cottage industry statage with caravan manufacture.

 

My god, it takes weeks to get parts now, I quake at the thought of waiting for a pressure switch from China.

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Think the problem come to UK caravan companies when they get a bad reputation for a major fault and it causes sales to decrease .

 

Chinese caravans . http://www. caravantalk. org. uk/topic/45473-chinese-building-caravans/page__hl__china+caravans__fromsearch__1

 

 

Dave

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Hi,

As an ex avondale owner we were told ( The owners club ) that avondale asked the banks for a bridging loan, the banks declined as a result avondale could not buy parts for the next years production. When we went round the factory their were very few staff, those that were there seemed to be just passing the time on the large number of part finished vans that were around the place. We had no end of problems, compounded by a dealer who was happy to sell but not to sort out warranty problems. We resorted to ( small claims ) court and won, judge described the caravan ( after seeing photo's etc ) as not fit for purpose. We were not the only ones in the owners club with problems, pity really we liked the van but got fed up sticking it back together after a trip out ! Two years after they closed our local dealer was still trying to sell off his stock of new Avondales.

cheers david1220

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We had an Avondale and loved the quality and build of it so five years later bought another one. It wasn't quite up to the quality of the one we sold but ok so five years later we looked at a new one, and decided it wasn't a patch on our first one or as good as the second one so we went elsewhere.

 

A lot of caravan sales are made on recommendation of brand and if people stop recommending them then eventually they are going to be in trouble.

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I am quite amazed that the UK caraven manufacturers are still much as they were 30 years ago. A great many manufacturers each making a great many varieties of van with UK labour rates.

 

Rather like car manufacturing I think it is ripe for the work to go abroad and it is really just waiting for a decent far east company to setep in the market. Cost of shipping to the uk must be less than the labour costs saved.

 

We are still very much at a cottage industry statage with caravan manufacture.

 

I suspect the UK caravan market requires a fairly specialist product to match local needs, climate etc and the expectations of UK owners. .. unlike cars which are pretty much the same product wherever you make or sell them.

 

The size of the potential UK import market for caravans would make it expensive for overseas importers to set up viable production runs and shipping of vans will never be cheap because they are relatively bulky and awkward objects that would be easily damaged in transit. .. high volume for a relatively low value/profit item. Think how many ipods and laptops you could ship in a container that would hold just one caravan.

 

When you import cars, at least you can drive them on and off the ship. A caravan would have to be encapsulated somehow for protection and craned aboard.

 

So I'm not expecting a lot of Far East imports of caravans to start arriving soon though the industry could do with the sort of quality wake-up call the British car industry experienced when Japanese car imports began. I suspect though that that competition is more likely to come from Europe than the Far East and that to respond with better product development, design, innovation and quality control the UK will end up with fewer but bigger caravan makers. ..or none at all unless they wake up quick.

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So I'm not expecting a lot of Far East imports of caravans to start arriving soon though the industry could do with the sort of quality wake-up call the British car industry experienced when Japanese car imports began. I suspect though that that competition is more likely to come from Europe than the Far East and that to respond with better product development, design, innovation and quality control the UK will end up with fewer but bigger caravan makers. ..or none at all unless they wake up quick.

 

I think if we were to see that, it would be Far Eastern ownership and finance, produced in Eastern Europe.

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As unfortunate as it is when these firms fold, then is it good news for others? As mentioned, Fleetwood, Avondale and also, on a different subject, Lunar ceased to manufacture motorhomes. Where have these customers gone? Swift? Coachman? Bailey etc?

 

Russell

Online blog and travels, although sometimes there is a lack of travel due to work!

 

It's an uncharted sea, it's an unopened door but you've got to reach out and you've got to explore.

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Unfortunately it is not that simplistic - companies can be selling more than enough BUT if they have not got sufficient cash flow and the banks wont tide them over they can be forced into administration (and then liquidation).

I agree, and as an example one of the most successfully small cars ever, the Mini. The competition could not understand how BMC could make them so cheap. The simple answer was they could not and every one of the basic model was being sold for a loss, although those with extra equipment etc. made money. If they had gone on the way they were they would have gone bankrupt (OK they did, but that was later!)

 

 

When you import cars, at least you can drive them on and off the ship. A caravan would have to be encapsulated somehow for protection and craned aboard.

 

Why? large carriers are more than big enough to ship vans & trucks on, they could easily ship caravans in them in the same way.

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Given that Swift Group static caravans, Bailey tourers and others are available in New Zealand through the Barrons Group (recognise the name?), then I suspet shipping is not an issue, although it would come at a price.

 

www. barrons. co. nz - you could work out the prices in NZD v sterling!

 

Russell

Online blog and travels, although sometimes there is a lack of travel due to work!

 

It's an uncharted sea, it's an unopened door but you've got to reach out and you've got to explore.

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If you look at the average UK van and compare it with EU vans you can see that in the main the UK market is a niche market. The style of van that is popular here is different from what the average European looks for and so although UK manufaturers do well abroad, this is usually a small aprt of their business. Similarly EU makers do enter the UK market but have to start production runs with the door reversed and ovens fitted etc. Some do it, such as Adria others don't. However, even the very biggest makers in the EU can go bust, just look at Tirus for example although even here many of the brands they had have now re-appeared under localised management.

 

Although I have mentioned the door as a factor it is not as major an issue as some would believe. Many EU vans are here in the UK with the door on the offside and have no problems. If you plan on touring Europe a lot, then it can be definite advantage. Build quality is also an issue where the UK makers seem to fall below average and after sales service is sometimes unacceptable.

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Ok, so there are some obvious reasons why companies go bust, recession, over expansion, bad management, bad credit handling and so much more, but at the end of the day, a company will go bust if it isnt selling enough product to cover its outgoings. So, when you look at caravan manufacturers that have gone to the wall, e. g Avondale, Fleetwood, is it purely down to not selling enough units and if so, why werent people buying those particular vans. Are any other manufacturers in danger?

The majority of companys go bust due to poor cash flow.

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The majority of companys go bust due to poor cash flow.

Much of that is due to companies using the 'Just In Time' philosophy. You get the parts you need delivered just in time to use them, then a week later the invoice comes through with 28 days to pay, in the meantime you have sold/used the item and shipped/sold the finished product and been paid for it, so you can then pay the bill.

 

The days of companies having enough cash to buy the inventry before they actually need it are long gone. In actual fact this is what has done for many high street names, Woolworths being the most obvious.

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