Second Hand Motorhome prices

[Brian Kirby]

Just telling it like it is, Lenny.  :-)  :-) 

[PCC]

I think that there are a number of factors that increase the costs of motorhomes at UK dealers.

 

Remember that the market here is smaller than in France and Germany so costs are likely to be spread over a smaller number of units.

 

Lets start with the cost of property. Dealerships have substantial plots and property is much more expensive here than in Europe.

 

Then there's the cost of finance. Our banks were quite happy to lend for dodgy speculative property transactions but tend to take a dim view of lending to small and medium sized businesses, which would cover motorhome dealers and in fact manufacturers. Look at Brownhills as an example. They almost went bust a few years back and were subject to a management buyout. The banks would view this as a fairly risky business so would charge a large premium on the cost of finance. That goes for the owners too - they're going to want a decent return on their equity. Autosleepers have also recently been the subject of a mangement buyout. In this country we value short term gains much higher than long term stability and price finance accordingly. Plus, each motorhome sitting on a dealers forecourt represents a substantial sum of money that has to be financed at high cost.

 

Next, look at the scale of production. European manufacturers crank out motorhomes by the thousand giving them greater muscle with their suppliers and spreading development costs over a higher number of units. The UK market still seems to be dominated by UK manufacturers so this will tend to push the base costs higher, and this will impact on the cost that can be charged for European motorhomes as well.

 

This is probably exagerated by the, shall we say, idiosyncratic tastes of many UK buyers, preferring a mobile cottage with floral curtains and a range cooker to the rather more utilitarian style of continental motorhomes.

 

So we end up with a higher unit cost from the dominant manufacturers and higher sales costs for the dealers.

 

Finally, look at the market, particularly with regard to secondhand motorhomes. Markets work efficiently when buyers have full knowledge of prices charged across the market. In Europe there is a much larger market, so much more information and comparisons can be made easily between one seller and another. Here, the market is much smaller so both buyers and sellers have less information and it is more difficult to establish what the market price should be.

 

I'm sure there must be lots of other reasons for higher prices as well, and they may well include taxes and labour costs. I'm not sure that we can blame everything on "greedy" dealers.

[lennyhb]

Brian Kirby - 2011-03-18 1:23 PM

 

Just telling it like it is, Lenny.  :-)  :-) 

 

Yer but we all not all as good with words, if it wasn't for spell checkers I would never be able to post and as for my grammar just look at some of my posts.

 

[Mel B]

I think PCC has pretty much summed up the situation.

 

As for the costs in the UK, loans etc are more expensive here, and I believe that in France they don't pay the same rate of NI (or whatever their equivalent) which is why if you visit a doctor you have to pay ...

 

I'm sure if there were these massive profits being made in the UK by dealers, some wouldn't be closing branches ...

 

As for the 'motorhomedealer' remaining anonymous - that is his right - if he is seen to be speaking openly on behalf of his company it could be problematic for him so I'd rather he remained anonymous and kept posting than 'came clean' as it were and caused problems for himself! :-S

[Shaun]

Perhaps it's a little too easy to lump the whole of the continent as being cheaper than the UK. When we had our house in France a few years ago, furnishing with anything decent was problematic, and we had to resort to tat from 'antique' stores. The reason was that French furniture retailers charged eye-watering amounts for things like sofas and beds. Time and again, people we met said that the canny French take a trip to Belgium where furniture is much cheaper. They do that for fuel, too. We actually bought much of our furniture in the UK and took it over to France.

 

So, this begs the same question, as to overheads in relation to perceived profit margins. I'm sure your average French furniture dealer would justify his higher prices in one way or another, as compared to the likes of Belgium, but I suspect the simple story is that pricing is largely based on what the market will bear and, historically, the French have been prepared to pay more for their furniture than the Belgians.

 

When Apple charged more for our iTunes downloads, compared to the rest of Europe, Steve Jobbs said it was a little more expensive to do business in the UK. For digital downloads? Yeah, right. I suspect Apple just charged what they felt they could get away with.

 

Back to motorhomes in the UK and it's a combination of overheads, plus whatever margin the dealer feels the market will bear - which could, of course, be said of any business, including my own.

 

Shaun

 

 

[lennyhb]

Mel B - 2011-03-18 4:53 PM

 

I think PCC has pretty much summed up the situation.

 

 

No I don't agree UK dealers may have higher costs but that does not account for charging £10- 20,000 more for a German van £500 to a £1000 maybe but 10-20,000 is just not on.

 

British vans are built in smaller quantities but the materials and standards are far lower, poor insulation cheap small underslung tanks etc.

 

What Shaun says is more like the truth they charge what they can get away with.

They have given the British Motorhomer the impression that Hymer's are an upmarket van to aspire too and charge likewise. In reality they are a mid range van sold at mid range prices in the rest of Europe.

They get away with as most punters believe the hype and don't bother to look elsewhere.

As Eddie pointed out car dealers used to be complacent until the public & press woke up to the great British rip off now car prices over here are not much different to the rest of Europe.

 

[Brian Kirby]

PCC - 2011-03-18 1:59 PM ............. Next, look at the scale of production. European manufacturers crank out motorhomes by the thousand giving them greater muscle with their suppliers and spreading development costs over a higher number of units. The UK market still seems to be dominated by UK manufacturers so this will tend to push the base costs higher, and this will impact on the cost that can be charged for European motorhomes as well. .................

Yes but, both our vans were made in Germany, so what is the reason for the price hike into UK?  What I think you are illustrating is the old BRILEYMOCO problem.  British Leyland was an inefficient manufacturer, therefore it products were expensive.  Because its products were expensive ME manufacturers (and the Japanese), rather than selling at aggressive prices and finishing them off, took fatter profits instead, so for years we paid far more for our RHD cars (Japan also drives on the right, so their excuse was?  :-)) than was truly warranted.  Eventually, that dreadful institution the EEC, got out the thumbscrews and made it pretty much illegal to charge different prices for the same product in different countries.  Result?  We now have cars so little different in price from ME that personal imports have pretty much died out (apart from cachet cars, like the original Twingo, that people imported because they wanted them, not because they were cheaper).  The well recorded consequence of this was, of course, (not your contention, I hasten to add) that all UK dealers went bust overnight.  What twaddle!  :-)

Of course, a few eccentric stalwarts continued making cars in UK, some merely from kits it is true, and recently have been shifting production destined for Europe from the far east to reduce transport costs.  Quite a few, though by no means all, have located in UK, and PSA of France still makes a substantial number of its vehicles in UK.  So, land, finance, and NI can't be such a large factor in the reckoning.

My guess, and that is all it is, is that as in the past, our production is, compared to ME, less efficient.  Our home market, as stated, is small, and there are too many producers.  Some have been bought up by firms from ME, for example Trigano and Autotrail, and unless the survivors get together and amalgamate into something more viable they will, one by one, go the same way as Riley, Austin, Morris, MG, Rover, Humber, Armstrong Siddley, Wolsley, Singer, Sunbeam, Triumph, and any others that have just disappeared.  Think motorbikes in the 60s and 70s.  Are we really condemned to endlessly follow the same discredited model?

Look at Europe, and at how much of the European market is fed by Hymer, Trigano and SEA.  Their buying power is huge, and they get the prices to match.  They have, to a large extent, standardised designs and production, while continuing to manufacture closely similar products, with generally only cosmetic differences, at various distributed centres under well known brand names.  Then, if the bad times come, they can rein in production here and there, or close a factory, without creating too much of a political backlash.

Our lot, bless them, tend to play the steadfast British game of staying separate, so incurring avoidably high plant, overhead, development, and management costs, and just charge more than their home market can, really, stand while giving their ME competitors fatter profits.  Ever noticed there are no A class vans made in UK and wondered why?  My take (hunch) is there is really only economic room for two manufacturers in UK, possibly only one.  They need to emulate the Hymer, Trigano, SEA approach, and draw themselves into a truly European sized manufacturing conglomerate with mainland Europe as a large part of its target market.  If they don't, they will slowly go the way of all those famous name car makers, who gently disappeared in favour of products made elsewhere and imported into UK.  Only then will UK prices fall close to ME levels, making vans more affordable for a wider public and, with improved quality (and so reduced warranty issues) and higher turnover, the dealers will be able to shave down their margins to give a further reduction in prices.

Oh well, that's my version of Utopia, but what do I know?  I've only been watching UK industry do the same for 50 odd years, so I'm just a beginner!  :-D

[grahamw]

Brian Kirby - 2011-03-18 12:52 PM

Knowing the German and French prices for the Van, and the UK prices for the identical model, I found that, even paying someone else to go and get it, import it back, pay the VAT, and register it in UK the saving, compared to the best UK price on offer (with no stock to hand) at the time (2007) was again (with a far worse exchange rate this time) some £5,000 lower.  So, you do the sums.  UK price £35,000, imported price, delivered to door, £29,347.11.

The important question is why.  :-D

Brian I think you raise some interesting questions which I too would like the answer to but I do have not the knowledge or expertise to determine the rules at play here.The parallel has been drawn by other posters with the car market of several years ago when we found that what was available in the UK from some foreign manufacturers was very much overpriced. It transpired that it wasn't the UK dealers who were making a fat profit but the manufacturers, especially in Germany, who were selling into our market at a significantly higher price than they were supplying their home market. Could this be what now afflicts the motorhome markets as far as the UK and European imports are concerned. Our contributor to this thread from a dealership advises us that his profits are consistent with the margins of his European counterparts. If that is the case then that is the only explanation I can think off.As an aside I bought a UK converted PVC which was expensive but it gave me the comfort I was looking for if I needed to spend a wet winters day in it in the UK. I could find the quality of construction from European offerings but not the comfort. The interesting point is that my UK converted van is comprised of probably 90% imported components. Truma services, Banner batteries and Sevel chassis to name but a few. It's sad that we have become a "service" nation and no longer manufacture a significant proportion of the components we consume. Is my PVC manufactured from components priced at a premium from German and Italian suppliers. I don't know but I would be certainly interested to hear from someone who does.Graham

[art338]

Graham in the previous post has a similar thought to myself.

 

Does anyone know the 'manufacturers price' to the dealer, UK v Europe?

 

Surely if a European dealer orders 100 and a UK dealer orders 6 then the European dealer can bargain for a much reduced initial cost and sell cheaper, or, the UK dealer will be forced to pay well above anyone else for his miserly 6.

 

That is normal business practice as far as I'm aware. The UK dealer could of course buy over the counter from a European dealer and resell cheaper here, it sounds feasible but possibly not practical. and why would he, far easier for the individual to do all the grafting, and save him money.

 

I'm sure the UK market is not rated very highly overseas with regard to M/H's, we are a minuscule island compared to the continent that stretches to the Pacific !

 

If all the worlds dealers buying prices are equal then I respect those who choose to buy from overseas. Had I been an avid traveler in France or Germany then I might well have done the same but age has beaten me.

 

art

 

[lennyhb]

art338 - 2011-03-19 1:29 AM

 

Surely if a European dealer orders 100 and a UK dealer orders 6 then the European dealer can bargain for a much reduced initial cost and sell cheaper, or, the UK dealer will be forced to pay well above anyone else for his miserly 6.

art

 

There is no way that argument can account for the vast differences in price.

 

[lennyhb]

Doh!

[Guest ChrisB]

Interesting and informative thread. Not bought on the continent so cannot compare prices from first hand experience.

Just a thought, however - "boot on other foot"..

I believe there are one or two UK manufacturers who do sell their motorhomes through dealers on the continent. Has anyone compared the prices of these models on the continent and in the UK? Could be interesting if possible.

Chris

[Guest JudgeMental]

You will find any van you are interested in here......Easy then to compare :-D

 

http://www.mobile.de/home/index.html

[lennyhb]

Sorry Eddie, they don't list any UK ones.

I wonder why :D

[art338]

Lenny,

 

But unless we know what price a UK dealer buys at, we shall never have a positive answer to the differing prices.

 

My everyday van is a VW transporter, I assume a similar difference may occure there too. I will ask them for their thoughts.

 

Perhaps our dealer on this forum can provide a clue, if he declines or provides a fuzzy answer then Lenny and Judge win the argument.

 

If you are correct and there's a fair chance you are, I suggest the situation will remain the same with the younger, more canny buyer prepared to excercise his right to buy on the continent.

 

art