MDC moves into locally built caravans

[Johnnos3003]

Might be old news, but I found it interesting.

http://www.caravancampingsales.com.au/editorial/news/2016/mdc-launches-aussie-caravan-range-58431

[grc]

Mmmmm time will tell


CHEERS GRC   

[D4D]

Thanks for a good laugh...

MDC Group’s current workforce of 10 is expected to expand to 100-150 during the first quarter of 2017.

So just his wages bill goes from approx. $2M/yr to $30M/yr in one quarter without selling anyting, good old 'get my name in the press at any chance' Hindley

[KingBilly]

Good luck to them.  Wish them every success.  Starting a local manufacturing business is a brave, and tough, decision.  Employing Aussies, and supporting Aussie suppliers, is a great outcome for everybody.

Getting quality control and warranty support correct will either make or break them.

KB

[MarkVS]

I read this 2 weeks ago and found it very confusing...ie...why would they do it ?

And this is not to be inflammatory, but if there is nothing wrong with the current model of the way they do things, why would they change ? What benefit do they get ?

Why would they move to have 2 different business/manufacturing ways of making something ?

MarkVS

[Johnnos3003]

? What benefit do they get ?

they are trying to get their fingers in every pie by selling a larger range of makes/models that are imported and manufactured locally that cover the whole price spectrum to capture as many sales as possible   

[edz]

So the waiting list for the full local built vans will be ?? with only 10 staff doing the builds..[ Still reckon it will all be flat packed in for assembly here] .
Wonder if they are going to do a 457 visa thingy with Whoo Flung Dungland to get the 100 +  extra bodies  or take on some of the new migrants /  long term unemployed with Government pay incentive's for getting them of the Dole . 

[KingBilly]

I read this 2 weeks ago and found it very confusing...ie...why would they do it ?

And this is not to be inflammatory, but if there is nothing wrong with the current model of the way they do things, why would they change ? What benefit do they get ?

Why would they move to have 2 different business/manufacturing ways of making something ?

MarkVS

Just guessing but their current market is pretty competitive.  There are many other importers, competing mainly on a price point, for the same customer base.  Lower margins, mean higher sales volumes are needed, whereas with a higher priced product, lesser sales but higher margins means same profits. They are moving into the fastest growing market segment, what with all the baby boomers retiring with their super payouts and buying big flash vans to do their lap of the map, they will be tapping a cashed up customer.   But that customer wants a locally made product as the baby boomers are probably the last generation who really care about buying Aussie made goods.  Now with an established market share, an established name, an established dealer and service network plus experience in designing and building vans, albeit it offshore, they have a head start getting into large van manufacturing.

KB

[D4D]

Just guessing but their current market is pretty competitive.  There are many other importers, competing mainly on a price point, for the same customer base.  Lower margins, mean higher sales volumes are needed, whereas with a higher priced product, lesser sales but higher margins means same profits. They are moving into the fastest growing market segment, what with all the baby boomers retiring with their super payouts and buying big flash vans to do their lap of the map, they will be tapping a cashed up customer.   But that customer wants a locally made product as the baby boomers are probably the last generation who really care about buying Aussie made goods.  Now with an established market share, an established name, an established dealer and service network plus experience in designing and building vans, albeit it offshore, they have a head start getting into large van manufacturing.

Meanwhile, other than Jayco, the Victorian caravan manufacturing industry is shrinking...

I wouldn't want to be a financier or creditor of MDC.

[KingBilly]

Wonder if they are going to do a 457 visa thingy with Whoo Flung Dungland to get the 100 +  extra bodies  or take on some of the new migrants /  long term unemployed with Government pay incentive's for getting them of the Dole . 

And why not?  They would be mad not to take advantage of government incentives.  There are thousands of other businesses doing exactly the same thing. Why should they be any different?

As for hiring 457 workers, there are a lot of conditions associated with these work visas.  If they can meet those government conditions, again I ask why not?  There are thousands of businesses again doing the same thing.

If you don't like 457 visas or governmnet incentives to get people off the dole, don't blame the company taking advantage of these governmnent policies, loby the government and have the policies changed.

KB

[KingBilly]

I wouldn't want to be a financier or creditor of MDC.

Um, why?  Other than your obvious dislike of the company?

If a financier has not done their due diligence, then they are the fools for loaning the money to them.

MDC are, on the surface at least as I have no inside knowledge, a successful and growing company who have obvously pitched a feasible business plan to the bankers.

KB

[Bird]

, loby the government and have the policies changed.

Piss into a strong wind, you'll get the same result.

[KingBilly]

Piss into a strong wind, you'll get the same result.

Maybe, but don't rant about companies taking advantage of government policy.  The policy is there to be taken advantage of.  Rant and change the policy if you don't like it

KB

[D4D]

If a financier has not done their due diligence, then they are the fools for loaning the money to them.

Valid point, I wouldn't take the risk if it was my money.

You just need to do some quick maths to see the volume they need to do to sustain the business, let alone make any money. Let's say the average sale is $50K, at 50% cost of goods, that's $25K per van of operating profit. With a staff of 100 his average wages bill per month is $500K. That's a minimum of 20 vans sold per month just to make wages...

[gordo350]

Maths isn't my strong suit but that equates to $5000 a month each. Caravan workers wages are nearer to 2500 for locals or less for imports. Less incentives. Might work for a short time but there is a massive turnover in the industry.  Keeping the crew will be like herding cats

[corndog]

And why not?  They would be mad not to take advantage of government incentives.  There are thousands of other businesses doing exactly the same thing. Why should they be any different?

As for hiring 457 workers, there are a lot of conditions associated with these work visas.  If they can meet those government conditions, again I ask why not?  There are thousands of businesses again doing the same thing.

If you don't like 457 visas or governmnet incentives to get people off the dole, don't blame the company taking advantage of these governmnent policies, loby the government and have the policies changed.

KB

Have to ask if you have ever had any contact, in any way, with 457 visas?

[Bird]

Have to ask if you have ever had any contact, in any way, with 457 visas?

mate of mine drives tankers interstate, and some of the things he's mentioned would make your hair stand on end...

[Swannie]

Have to ask if you have ever had any contact, in any way, with 457 visas?

I have, best staff I have had, grateful for employment, don't take sickies because they think they are entitled to it and generally happy working in Aus. Our local workforce is another matter 

swannie

[D4D]

Maths isn't my strong suit but that equates to $5000 a month each. Caravan workers wages are nearer to 2500 for locals or less for imports. Less incentives. Might work for a short time but there is a massive turnover in the industry.  Keeping the crew will be like herding cats

Add payroll tax, super, insurances, sick/holiday accrual, etc. Just because you don't get it in your hand doesn't mean it isn't being paid. Well in some cases it isn't, but that's a different topic all together...

[McGirr]

They are giving it ago...good for them.

If you want to see some so called well known australian van manufacturers service join up to the lemon caravan and rv facebook site. You will be shocked. Its makes mdc look perfect.... 

Mark

[Footy Shorts Shane]

The 100 staff thing is probably a grossly exaggerated figure for marketing purposes.

AOR are two streets away from me. I drive past their place every couple of days. The shed I moved into cost the guy 1.2 mil to build. I'm no real estate guru, but AOR have 4x the floor area, 10x the fit out and is tilt slab as opposed to iron shed. I think they're sitting on a reasonably valuable property.
There's at least 50 staff vehicles there daily. There's push bikes, motorbikes and scooters too. I'd guess maybe 70 staff The place is enormous.

AOR started off in soft floor campers. Now they build hybrids and caravans. So why can't Hindley do the same? He's a pretty smart business man.

[D4D]

AOR started off in soft floor campers. Now they build hybrids and caravans. So why can't Hindley do the same? He's a pretty smart business man.

Judging by his numerous rants on various forms of social media I wouldn't agree that he is that smart, time will tell though.

[KeithB]

Just clicking through to the new Alko trailing arm suspension that they are going to use, with a 2 tonne load on board I didn't think the ride was all that flash.

[achjimmy]

Maybe the Chinese vans aren't working out that well?  There's a lot more issues to building a van as to building a camper. Additionally we are getting towards the end of everything being worth being made in China. There economy and wages are growing and while there are countries like Vietnam stepping up they are really to large corporates  where they can Be strictly controlled. trying to make a few rvs would be a nightmare.

[glenm64]

I found it interesting that the article says they are going to be using locally sourced components. Wonder if their import range of vans not quiet hitting the mark in terms of the durability of fittings.
Its a big step up to invest in a manufacturing facility, and hopefully employing locals (just because you can import labour doesnt mean you should, yep I rant about this policy and get involved where ever I can to stand up for the next generation of kids jobs)
The future of manufacturing in this country is, either to be big enough to tilt the scale of economy in your favour, or have a niche market for your product.
Personally I hope they succeed, anything made here is more beneficial than importing it.

Cheers Glen