Friday, 30 December 2011

New Year's Message - 2012

2011 has for the world at large been a time of angst. Economic and social shifts have fundamentally altered the western world as was known. Whilst the EM regions, and China specifically have witnessed a new lower growth era, a seeming about turn from previous heady highs, yet adding much needed GDP equality and social stability in the course of doing so.

Efforts to try and stop a systemic seizure of European capital markets as a result of the sovereign debt crisis resulted in a seemingly desperately slow roll-out of meetings between national leaders to create a tenable plan. As meetings flailed so capital markets lurched, in turn pressuring the very cost-bases of most arguably 'over-inflated' EU countries relative to broad world commercial cost structures. Yet that re-balancing process is unavoidably lengthy, and the decimated trading levels generated a near Euro funds seizure after what has been 20 years of ever flowing liquidity. As seen, the ECB stepped-in with its E489bn 3-year soft-rate loan, for the 523 banks seeking assistance, yet even that long-awaited injection failed to steady the market. As a result Euro belief is still tenuous, and a subsequent long-term drop in the Euro's value the only true remedy for the blighted periphery countries, and a welcome FX incentive for high-value exporters, especially of course Germany.

The US perhaps politically overplays the homeland impact of European woes, perhaps doing so to subtly highlight what it may believe as itself as the well placed, natural recipient of investor angst elsewhere around the globe. Since the bursting of its financially driven credit bubble, its own corporates were well placed to benefit from previously buoyant export demand of many of its products and services, whilst having been first in the relative 'race to the bottom', may now be able to regenerate the domestic economy via home-grown policy initiatives at Fed and state level. Not quite in the manner of the work-camps seen after the 1929-33 Great Depression - which concentrated low-cost labour efforts – but in today in a more 'networked' manner of its broad and varied labour force. This in turn to kick-start investor appetite, CapEx renewal, inter-company activity and thus in the medium term to renewed stable consumer demand.

Societal attitudes in the West have expectantly altered, given recent failure of economic policy-makers to recognise the fault-lines created by untrammelled market exuberance; indeed the seeming blind avarice of corporate and personal egos in certain quarters.

The high profile, though somewhat misdirected, efforts of the 'Occupy' Wall Street', other US city 'sit-ins' and the 'St Pauls Protest' in London, personified like little else in the past the “time for change” simmering anger; and by virtue of their very existence probably acted as emotional transmission vehicles for the wider populace, so possibly avoiding larger episodes of more destructive unvented national unrest.

The growth of such a disparity of wealth between what is described the priveliged elite and the broad masses was made almost reminiscent of Victorian times, yet unlike those times whilst there is an undeniable underclass throughout the US and Europe, life for most has been increasinglt prosperous and comfortable, though those benefits obviously traded against a loss of personal time as workloads rise and increased personal and family stress as a result.

Ironically it was exactly such a trade-off – though to far greater extent than the average person – that those “money-(wo)men” made in their own lives, swapping much of the autonomous control of their own lives for a seemingly glamourous jet-setting lifestyle which in reality shackles them near 24-7 to a punishing corporate schedule that rarely sets one free from the boardroom table, internal and external meetings, a heavily orientated social life, and of course never-ending pressures that most 'average' people would view as anything but a 'life'.

Yet, those 'masters of the universe' will have their shoes filled in turn by their underlings seeking the apparent heady heights that provide large expense accounts, a private bathroom and the ability to purchase the dream the lifestyle.

The Financial Crisis may well be laid at the feet of those miscreant 'others' but the desire for professional, personal and social success will not disappear; such leanings seem interwoven into the DNA of many human beings, and unfortunately, when the economy once again starts to thrive, so will the drive of those who seek status and / or personal satisfaction. The platitudes of today will in time be forgotten and a new cycle will begin. This is very necessary, and 'animal spirits' undoubtedly have their role, but must be tempered by individuals' questioning themselves, and by a rebalanced value system in society that broadens its own definition and recognition of achievement.

Whilst the finance truism writ large by ex-Citi's Chuck Prince largely remains world that “as long as the music is playing, you've got to get up and dance”, it is perhaps prescient that it was the child's eyes and unfettered 'mature' mind of Alice (in Wonderland) who questioned the wisdom of such unthinking participation, when she sang the Lobster Quadrill.

For it was she, who under pressure from her 'betters' (the adults) to sing another song accompanied by the seemingly inescapable fervent tick-tocking of the metronome, not only stopped the 'clock', but sang “Will you, won't you join the dance?”.

"Will you walk a little faster?" Said a whiting to a snail
There's a porpoise close behind us
And he's treading on my tail.

See how eagerly the lobster and the turtles all advance.
They are waiting on the shingle.
Will you come and join the dance.

Will you, won't you,
Will you, won't you,
join the dance?

Ultimately, the New Year Message at the beginning of a very fragile 2012 must surely be about questioning the expectancies of professional, personal and social participation, and creating conditions for a more worthy and satisfying 'dance' for one and all.

Friday, 16 December 2011

Christmas Message

It is hoped that all who have read the investment-auto-motives' web log essays / reports / notes posted in 2011 have found them absorbing, insightful and enjoyable.

Although directed at the higher echelons of investment banking, private equity, automotive industry and government, it is hoped that others throughout such organisations, and indeed into academia, are also able to digest the various macro and micro orientated topics, presented with as much overlap as possible to provide a contextual map for specific company, auto-industry sub-sector or regional locale.

Besides an obvious shop-window for investment-auto-motives' advisory capabilities, the intention is that practising professionals in the aforementioned arenas, and those younger but equally ambitious, are able to gain snap-shots of the myriad of automotive activities that spans the world.

Activities which act as the critical central economic generator, which draw in capital from far and wide, often via FDI, and in turn helps to raise the living standards of millions that work inside the auto-industry at some point in its value chain, but also those situated in complementary arenas. Whether that be in the primary and secondary levels of broad industry (mining & processing), the insurance sector, the (criticised but essential) oil industry, or the ever expanding world of IT, as all vehicles become more 'intelligent', And indeed within the leisure sector, from the ethereal of screen-based game-play to the reality of drawing overtly competitive drivers into organised track-day events and so removing potential danger from public roads, to the world of motor-camping as described in the last post.

But of course each and every region and country has differing demands from the automobile, the infrastructure that services the car, van, bus and truck, and the commercial environment that surrounds such personal and mass transit mobility.

The demise of the auto has been recanted time and time again, and whilst undoubtedly in certain regions car use may appeared to have peaked resulting from the interplay of rush-hour 'grid-lock' and fiscally constrained times, as a global whole the 21st century looks to be a new golden era for the vehicle – in all forms and propulsion methods – as nations and peoples work towards and thus expect a better tomorrow for one and all.

Thus, it is very much hoped that: all across the Islamic world enjoyed the Eid-Milad-un-Nabi celebrations in February, all across India (of whatever faith) enjoyed Diwali celebrations in October, all across Asia enjoyed the very recent Buddhist Bodhi Day celebrations.

And of course it is hoped that all those of Christian faith across the world - from the masses of Brazil to the minority in China – enjoy a “Very Merry Christmas” and “Fortuitous New Year”

“Judge a (wo)man or a tribe not by name, colour or creed, but by intention, action and deed”

The final words of the year, that would well guide all countries and faiths, are provided by the wisdom of Confucius:

“The ancients, when they wished to exemplify illustrious virtue throughout the empire, first ordered well their states. Desiring to order well their states, they first regulated their families. Wishing to regulate their families, they first cultivated themselves. Wishing to cultivate themselves they first rectified their purposes. Wishing to rectify their purposes, they first sought to think sincerely. Wishing to think sincerely, they first extended their knowledge as widely as possible. This they did by investigation of things...

...By investigation of things, their knowledge became extensive; their knowledge being extensive, their thoughts became sincere, their thoughts being sincere, their purposes were rectified, they cultivated themselves; they being cultivated, their families were regulated, their families being regulated, their states were rightly governed; their states being rightly governed, the empire was thereby tranquil and prosperous”.

Whilst investment-auto-motives propounds “The Art of Work” via its post-cards, these Confucian words offer “The Art of Living”.

This then is perhaps the true Christmas Message to one and all.

The investment-auto-motives web log will return on 8th January.

Saturday, 10 December 2011

Micro Level Trends – UK Niche Industry (Part 3) – National Economic Revitalisation via Miles of Smiles


Having reviewed in Part 1 the general dynamics of a resurgent motor-caravanning market, altered through changing socio-demographics and commercial reaction, and in Part 2 an overview of the UK's traditional camper-van & motor-home producers, set in the context of foreign competition and the competitive advantage of technology advancement.

This final section looks at the possible opportunity for the UK to initiate a path toward improved nation-wide economic well-being assisted by ecologically orientated technological solutions.

Very basically, such efforts would consist of the following:

- Improved fortunes for the sector at large by becoming greater aligned to social change.
- A new era of marque differentiation & focus via technical innovation
- Opportunity for an “Eco-Tech Ripple” toward seasonal-use and mainstream housing sectors.
- Exploitation of the Camping Economy as Eco-Tech 'Starter Motor'
- Stepped Programme of Eco-Tech Scale-Up for National Economic Re-Vitalisation

Market Connection -

As noted in Part 1, the last 10-15 years has witnessed two fundamental shifts: initially that of social change, and latterly that of economic shift.

The change in social dynamics during what was an economic boom period through the 1990s & 2000s included a broadening of lifestyle and lifetime experiences , especially amongst the middle-class young who could interweave a long period of international travel (usually 'back-packing' but also increasing NGO work) with their post-poned undertaking of 'expected' higher education & career. Whereas their parents may have interpreted 'travel aspirations' as an alternative 2-week package holiday, or the hope of cruise-boat holidays or long-trips when in retirement, 'GenYers' recognised the irresponsibility of youth as the time to undertake their own cultural and hedonistic 'Grand Tours' of Asiana and South America. Thus, by historical standards, the younger generation's expectancies reached an all time high, buoyed by the golden years of western economic fortune.

However, the 2008 Financial Crisis, the subsequent heavy economic downturn and resulting 'New Norm' of socio-economic instability, has created a seizmic shift in cross-generational perceptions. The undermined long-term financial security of even middle-class families has 're-set' what had been a 'travel sponsoring' mindset for their children, and for parents and child alike the now necessarily hiked financial cost of securing a personal future from higher education means that 'gap year' global travel ambitions look ever more diminished.

Hence a situation where the youth – and indeed not so young - of the UK have been molded toward the expectations of 'wunderlust', but are now forced to recalibrate ideas about what is realistically achievable within far tighter budgetary constraints.

The emergence of this socio-economic re-orientation – whilst no doubt noted - needs to be far better understood by the players within the UK motor-caravan sector; which for very good reason of its own, has been focused on the well established traditional market which caters to middle-aged and 'grey-market' clients who though 'middle of the road' and highly conventional had the benefit of stable employment and solid pensions supporting their relatively high disposable spending in this arena.

It must be recognised that such people still represent the major core of the sector, a core which still looks to set to have a remaining 20 – 30 year life-span and which will undoubtedly continue to be the commercial 'bread & butter' with propensity for relatively 'elastic spending'. So a continued prime market which UK producers will need to attract and satisfy.

And undoubtedly, in time many of those “Gen-Y globe-trotters” will become as (comparatively) conventional as their parents, time and much altered 'life-agenda' diminishing their previous youthful exuberance, and with it an increasing preference for the conservative. Yet because of the increasingly heavy influence of a fashion-orientated, media-driven society, successive generations of people appears to retain / adopt aspects of this youth-centric culture, albeit for the 30-something, 40-something, 50-something and even 60-something, in a more diluted manner.

Thus it is not surprising that whilst the influence of fashion and change was perhaps more obvious half a century ago with different generations clearly de-lineated by clothing, activities and attitudes, the far more heavily media engrained late 20th & early 21st century society. The plethora of media forms via a plethora of media devices has resulted in a form of “human programming” which has fundamentally changed people's lifestyles and interaction behavior.

This now endemic media-centric social shift then must be recognised along with the previously mentioned 'travel-bound' ideology and the economically constrained 'New Norm'.

And it is these 3 major trends that will increasingly affect the motor-caravan sector, and thus must be better understood by sector players and their financiers, so as to evolve in identifying and creating the opportunities to be had, and as importantly, navigate headwinds and avoid potential pitfalls.

To this end investment-auto-motives suggests that the National Caravan Council (and similar sector bodies) funds a meaningful sector research project - structured primarily toward the macro-level 'PESTEL' in nature - into the future of the industry, with special reference to the sociological and technological..

This to be done using either a portion of subscriptions monies paid to the NCC (and other similar trade bodies) if substantive enough, or by the creation of a special project fund. It is viewed that perhaps the most pragmatic course would be to create a 3-stepped programme to run over a number of years.

Step 1 – The work undertaken by the NCC itself if possible for cost efficiency reasons and the advantages of such an 'organic' exploratory process. Although recognising that its own limited capabilities may lead to what may be considered “lower value” research methods, analytical work and final conclusions / recommendations, it would be a useful cost-effective start-point.

Step 2 – Having determined a research base, thereafter, to ascertain “mid-value” recommendations the NCC could perhaps commission a higher-cost, higher-value project via academia. For example, the Cardiff Business School's 'Centre for Automotive Industry Research', or others as most appropriate relative to sector familiarity, research capability and familiarity with the technological and the sociological. Degree level students may not offer the insight required, whilst PhD students typically require long-length (multi-year) projects to substantiate their award. Thus perhaps the best option is to offer the project to a university which can weave a 6-month to 12-month project into the typical 'real-world' case study work undertaken by MA/MSc students. Given the results of Step 1, this approach should provide for useful yet still cost-effective insights.

Step 3 – Ultimately as an optional later stage possibility, if NCC members all agree that previous research has been fruitful and seek to continue in the quest for future sector learning, what should be “high-value” insights may be gained from the use of premium commercial research agencies, such as those used by major car manufacturers. This would undoubtedly lean toward the sociological (technical R&D tends to be undertaken in-house or with academis by VMs) but should identify important “utility / demographic / psychographic” conclusions about the mindsets of various consumer types within the motor-caravan world.

To this end, investment-auto-motives suggests a 3 year programme using each of these steps for cost-efficient 'step by step' picture building might prove most effective. It will ensure that the vital importance of 'Market Connection' is maintained and better understood.

New Era of Marque Differentiation via Technical Innovation -

Given its relatively narrow audience, it is no surprise that this niche sector of the auto-industry does not hold a level of popular esteem equal to that of the legendary British car manufacturers of today or indeed yesteryear.

Motor car manufacturers, the premium marques included, have undoubtedly suffered during historic economic downturns. However, by virtue of the ubiquitousness of the car and their innate standing as symbols of status, meant that the apparent best names – through better company management or marque reverence or indeed both – have been able to withstand economic headwinds; companies taken over as necessary by foreign interests.

In stark contrast, the fact that motor-caravanning has typically always been 'under the societal radar' here in Britain, connected to a previously a small band of participants and only really popularised as the butt of jokes regards summer-time road congestion, it is not so surprising that a major divergence of general knowledge exists between car and motor-caravan. This divergence appears far smaller on the European continent and of course in the USA, given the wider propensity to enjoy such vehicles.

Furthermore, perhaps even more so than tow-caravans, the motor-caravan brand suffers from the fact that the marque itself is viewed as a secondary element compared to the on the road 'visual supremacy' of the base vehicle from the VM van manufacturer; whether VW, Mercedes, Renault, Peugeot / Citroen, FIAT or Ford.

If a camper-van conversion the visual change is to be seen but rarely recognised unless adorned with striking brand graphics, which goes against the typically conservative buyer preference for subtlety and visual convention, and especially obvious on the smaller available body-side of a windowed van.

If a motor-home often the actual model name graphic on the body-side tends to take precedence over the converter company logo or main brand, which may be seen on the front grille and rear as a far smaller 'unseen' badge. The apparent UK preference for periodic change in model names, done to update the range and maintain competitiveness, therefore disrupts even a certain model-line from establishing itself over time.

This then different from the HYMER case study in which its model-line identification remains 'in perpetuity' thus reflecting the standard long-lived nomenclature used on German cars. A long-lived name on necessarily changing product adds gravitas and credibility, as opposed to arguably a more short-termist approach where immediate PR-led market gain is captured by publicised model name change.

Thus we see that the actual name of the converter company itself – notionally the primary brand – has historically been required to 'take a back-seat' resulting from buyer preference and/or model marketing initiatives.

Yet, as previously seen with Winnebago, Airstream or HYMER, this can be overcome to provide strong and direct market connection when the product demonstrates itself as technically superior (ideally both functionally and visually) and is additionally supported by the usual strong customer service quotient the sector demands.

Technical innovation then has proven itself to offer major competitive advantage, when it can be demonstrated as both functionally beneficial and when presented as socially symbolic and so accepted as consumer desired.

Airstream's use of aluminium for its caravan bodies from the 1930s onwards not only had direct links to aero-tech systems, but therein was direct connection to the innate idea of mechanically enabled social progress and betterment. The material itself was also highly evident in the construction of road-side Diners along the then new US highway system, so there was an immediate literal reflection between these two totems of social progress. And the fact that until then roads and roadsides were comparatively deserted meant that the consumer impact for Airstream products 'set in the new age and new sea' was all the greater.

The UK, Europe and Northern America today are far more complex social and sales environments in which sector players must work. So, the 'blank sheet' technical leap that Airstream enjoyed by transforming consumer tastes from old-style wooden & fibre-board caravans toward aluminium structured and aluminium panelled caravans, is not so easily open to manufacturers today. The idea of moving from today's CMC sheet plastic and hand-lay fibre-glass for motor-home body-sides to the 'leap-frog' equivalent of utilising carbon-fibre is wholly unrealistic given the massive pricing gulf between the materials.

Yet that does not mean that other technical advances cannot be made in design, structure, and the utility of fittings, just as has been the case in the past.

The best known example is HYMER's 'PUAL system' of body-side construction / bonding. Introduced some decades ago it is a sandwich mix of outer-skin aluminium, foam core and board interior-skin. Besides negating general water ingress, the system is known to have good insulational properties, steady temperature control and so avoids condensation issues. The producer's own advertisements state that “the 35mm of PUAL wall thickness provides a performance equivalent to an 800mm thickness of standard brick. This innovation has been copied by others in one form or another, though seemingly not quite up to the PUAL standard.

The company also sought to gain advantage by then offering the space-saving innovation of a “pull-down” double-bed, often situated above the driver's cab area, so utilising what is otherwise 'dead-space' and so leaving much of the rear saloon for day-time habitation space. This an innovation thereafter copied by others.

The last renowned innovation from HYMER was the introduction of twin level flooring, effectively creating a sandwich floor which could be used to package both the vehicle's heating systems and provide for expansive under-floor storage areas to stow away camping ancilleries and other low use items such as suitcases etc, which would otherwise clutter the living area of the van.

The “Eco-Tech Ripple” -

It is such intelligent technology and space-planning solutions, borne from the very necessary needs of heat preservation and energy-use reduction aswell as the maximisation of space utilisation, that has over the few decades had such an impact in the more progressive areas of building construction..

Not surprisingly, it has been the commercial building world, with a necessary fiscal imperative for all stake-holders; the new building (land) owners, the building constructors and of course the building leasees. For many years now, unlike the private dwelling sector (exempting social housing), the commercial arena has had to drive down and balance CapEx and Life-Time Running costs.

With far greater desire for progress, the commercial building world has been ahead of the domestic housing building world, which it can be argued has relied upon traditional build methods since they are often so labour and materials intensive so as to have over centuries created a mini-economy of its own; one which is undeniably critically important to the British economy.

However, as seen, the functional needs of the ever improving motor-home has been forced to rely upon 'thin skin' technology, and for occupant comfort (and safety), the best of which must by an enormous factor outperform conventional buildings.

As Germany noted previously given its technology and manufacturing culture, the UK today must continue and indeed increase the pace of not only researching into eco-friendly building methods, but critically provide for the unblocking of any 'bottle-necks' inside the building sector that for self-interest and self-preservation purposes refute the need for progress.

The domestic house building arena has of course taken-on partial learning from the commercial building world, and importantly tends to do so during the policy-induced house-building booms that serve to assist national 'climb-out' from its fiscal woes, such as the 1930s when (German-derived) 'Crittal' windows were installed on a mass scale, and later in the 1970s when secondary and double-glazing was widely introduced.

With the UK's co-alition government liberalising the policy-climate for developers in brownfield and select green-field 'mixed-housing' housing development schemes, the present time is a window of opportunity for the introduction of new eco-tech solutions at both evolutional and step-change levels; the solutions applied befitting the project type.

[ NB the very recent TV programme 'Kevin's Grand Design' - presented by the very popular 'architectural guru' Kevin McCloud - aired on the evening of 8.11.2011. The 2-episode programme concerns itself with the creation of a new eco-housing project led by Mr McCloud which itself incorporates an eco-conscious bias and the use of a 'space & utility maximisation' philosophy now understood as derived directly from the caravan industry].

Thus whilst domestic housing obviously looks to commercial builds for eco-tech inspiration, there is also a need for both domestic and commercial to 'pick the brains' of the motor-home sector and cherry-pick or mimic those current and emerging solutions which can be deployed.

To this end there should be an exploration of:
- materials technology transfer
- build methods technology transfer
- efficient energy systems (electricity, gas, water, waste) transfer
(the latter looking beyond 'smart-meters' into whole systems efficiency)

There should be concentrated learning and deployment that enables technology-transfer between various types and modes of habitation type, from camper-vans to motor-homes to static-caravans to cabin-type holiday dwellings to conventional housing to progressive housing and to step-change type dwellings.

Undoubtedly presently the UK's Building Research Establishment does very good R&D work, its BRE Innovation Park demonstrates 10 separate buildings by differing concerns (from mainstream builders to research agents). This then presents what appears the natural channel for building sector efforts at feasible trickle-down eco-solutions, and no doubt will gain greater profile as part of the co-alition government's major new house-building effort, itself served by several different funds.

But to reach beyond the mid-term and look into the long-term, the BRE (or similar) and participant architects, developers and building contractors may need to extend their vision further afield and toward the world of motor-caravans to understand the realms of the possible, with solutions approached from the opposite direction.

The Camping Economy & Eco-Tech 'Starter Motor' -

Beyond the pragmatically academic R&D work of the BRE, it may be the case that to truly cross-fertilise technology learning across the plethora of habitation sectors, that the camping economy itself could be used to create a 'spiral staircase' toward mainstream habitation, one in which the upward force of change creates a (Dyson-esque) multiplier cyclone effect on the size / scale of applications as it moves from the fringe of motor-caravans and through into more mainstream (static building) types.

Furthermore, the fact that the broad camping sector has its own mini-economy could be of major assistance. If that mini-economy is understood and deployed adeptly, it suggests that the central message of technology transfer can be aired (via the camping route-way) to engender demand for such eco-tech change, with an onus on self-help, as opposed to expecting from the nanny state. Thus, already present and growing 'camping consumers' become a broad base of 'evangelists' or 'missionaries' on behalf of the eco-message.

The camping holiday arena is an economic world in itself, and as such should be viewed as a microcosm of the nation at large. It includes:

- Core Products
(tents, caravans, camper-vans, chalets, cottages)
- Functional Ancilleries
- Fashion Accessories
- Financial Services
- Insurance Services
- Driver Training Courses
- Emergency Rescue/Assistance Services
- General Advice Services
- Leisure Park 'Pitch' Rental
- Leisure Park 'On-Site' Facilities / Services / Events

This all combines to create a network or matrix of commercial interaction, from opportunities for brand development, cross-selling, loyalty schemes, promotional tie-ins etc. And with the emergence of the powerful 'grey market' over the last 20 years it is a sphere which many portfolio companies and investment houses have taken great interest, the past seeing interest from the likes of SAGA Group which sought motoring and travel synergies with its ownership of the Automobile Association under the name Acromas Holdings. Thus the wide realms of the camping world is recognised as a powerful economic force in itself and when tied to synergistic corporations.

It then represents a economic sub-system to that of the nation's which might be moulded to act as the 'eco-tech starter motor'. Undoubtedly the trend is already under way, though to what extend is unknown, with the emergence of hand-powered torches and wind-up radios, solar-powered electronic device chargers, and other energy capturing or energy saving items.

[NB it presently appears very slim that there will be any market/private-led or government-led incentive toward major re-investment in the UK's energy sector. This indicates that the present plant infrastructure will be utilised and 'run-down', replaced on an ad-hoc basis where necessary. This in turn indicates that supply levels vs demand levels will shrink, thus maintaining historically high price levels and so nurturing the consumer market for energy related devices].

The continued ideological support of this trend would provide the initial momentum for the 'ripple-effect', via an in-situ audience and so concomitant market-place, which is already attitudinally open to the positive aspects of eco-tech relative to 'natural living'. And thus, presumably, a domino effect of its influence throughout the various camping affiliated consumer groups and thereafter into the wider reaches of mainstream society.

This appears the reality already, but perhaps requires greater effort by commercial interests to turn the ripple into a wave of attitudinal change.

Scale-Up for National Economic Revitalisation -

The Autumn statement by the Chancellor of the Exchequer highlighted the need for continued to drastically reduce the UK's national debt levels, a central exercise if the UK is to ultimately rebound with necessary vigour. The classical economists' monetarist perspective relays common sense when it is recognised that the less the burden on government so the less the burden on industry (spanning high-finance to light-industry) thus onto commerce and so the people at large. In the meantime fiscal constraint will be hand in hand with inevitable consumer constraint as the re-balancing continues.

Although technically out of recession - represented by shallow growth figures – the undeniable reality is that the western world has endured what has been a monumental structural recession born from the 2008 financial crisis, and its after-shock - even without the Eurozone trauma which adds further tremors - was never going to show a strong near-term up-tick. For all the talk of 'U' shaped recession, or 'W' shaped recession, because of the unparalleled economic structural damage, it was always destined to be a very slow ride out of the storm. This is why investment-auto-motives talked of the 'New Norm' before it became generally accepted, and why the best symbol to represent the situation is a shallow angled 'tick' representing a slow trudge.

In tandem with cutting debt, plans for re-generating economic growth have been aired. In typical fashion the government targets infrastructure, with the 'National Infrastructure Plan' recognising 40 projects of “national importance” with another 500 identified by the private and public sector. It spans railways, power (notwithstanding the aforementioned note), roads and internet.
Naysayers such as The Economist state that this alone will not provide the necessary re-energisation to fully assist the UK, a whilst a somewhat obvious / fatuous statement given that infrastructure build is the direct catalyst for one or two sectors of the economy (FTSE 500 and all), it does replay the usual re-vitalisation pattern by working 'bottom-up' with more immediate shovel-ready jobs leading to new infrastructure related jobs across many other sectors.

However, whilst this represents a much needed £250bn or so capital injection, and represents the beginning of the foundational 'productivity push', as stated in the last section, there needs to be a 'demand pull' to ensure that generated wealth that passes through employees hands from infrastructure programmes and additional cash injections from UK private enterprise and incoming FDI monies, is re-spent throughout the UK economy.

Green issues and eco-tech has over the last decade risen ever higher in the consciousness of the public. Yet to a large extent, that consciousness has been regards state driven ideals – themselves stemming from the Kyoto Protocol in the early 1990s. Focused on what appeared the radically transformative effects of wind-farms located off & on-shore, sea based wave-motion generators on the water's surface and current-motion (water-wheel) machines situated on the sea-bed, or solar-farms such as those pioneered in Spain and the Sahara project to convey solar-energy into the European power-grid. But in the fiscal reality of today such grand schemes appear not only prohibitively capital intensive but also a leap into a technically unproven future.

Instead, because of the expected decline in power availability in the UK, the realistic future is not energy production, but energy management, and that very much depends upon the behaviour of the public and its own consumer actions.

But of course, state, private enterprise and consumers do not operate in individual isolation. To this end investment-auto-motives believes that the camping sector – including the wider popularisation of the motor-caravan – can act as a fundamental catalyst in transforming consumer and thus public behaviour.

It was noted that camping is a multi-faceted world, with different yet often interconnected business streams. Moreover the various methods of camping represent a 'staircase' of habitation levels (comfort and security), from the basic 1-2 man tent through to family tents, to caravan / motor-home, static caravan and to chalet / cabin type construction.

Each represents a level of habitation closely ties to comfort / convenience / safety and as such is closely related to a level of energy use. Each of these habitat types has had tools, devices, instruments, machines developed to suit the need, from a hand wind-up mobile phone charger when in a tent, to in the case of a remote cabin, roof-mounted black coloured water-stores which absorb the sun's heat and provide for warm showering.

Whilst many such solutions can and are used by different habitation types – and of course rely upon the the basic science - there is very probably an opportunity for eco-tech transfer between most levels of the 'staircase', thus allowing for alternative energy efficient answers.

Perhaps none more so than the relationship between motor-caravan and conventional house.

It is believed that the fact that motor-homes seek to have a 'closed-loop' level of self-sustainability to provide for as much time spent 'off-grid' or 'unplugged' as possible Yet also the fact that energy is available from the vehicle's internal combustion engine (itself of course from petrol) when necessary.

This then mimics the desire that house-holds become as self-sufficient as possible, ultimately drawing power from the national grid when necessary. Here then the parallel and route to learning is that the national grid can be represented by motor-home's internal combustion engine.

To provide for such a high level of self-sustainability, motor-homes have for many years had energy management systems. These signal energy use rates and remaining levels, very much as the fuel-gauge does on a standard car, and is able to allocate energy consumption between the energy stored in the vehicle's batteries and the functional ancilleries. Thus 'smart-meters' have been deployed in the camping world for nigh on decades.

However, there is of course an intermediate type of habitat that sits between motor-home and conventional house: the holiday chalet or cabin.

This then offers the possibility of deploying the holiday chalet as an intermediary enabler in the mainstream acceptance of eco-tech, from smart-meters and energy allocation systems (for primary and secondary functions) to newly deployed materials and methods in wall insulation (such as the PUAL system used by HYMER) to perhaps even an increase in the use of human powered devices.

[NB It seems ironic that gym-base running machines et al require electricity drawn from the grid when the human is expending energy].

Thus given that the camping arena is so broad and so directly philosophically connected to nature and the ideals of self-sufficiency, it is appropriate that camping products, camping / leisure centres and all that operates in this micro-cosmic universe be well orchestrated by those related commercial entities. This spanning from influential entrepreneurs such as the Dragon's Den's Deborah Meaden, to camping-centric holding companies such as Swift Group to Private Equity firms that have taken a deep investment interest in the sector.

Conclusion -

The 3 sections presented over the last 3 weeks sought to demonstrate the growing importance of the UK motor-caravan sector to personal leisure, regional travel and acceptance of eco-tech solutions; these stemming from and reacting to, the massive shift in demographic and economic trends that have taken place in recent years.

It sought to highlight how all players of the sector need to consider their reaction to this period of change, from the old established family firm through to the ever growing multi-brand sector consolidator. These changes mean that new challenges and opportunities have and will continue to appear. And critically that the sector, having gone through 'boom and bust' could well benefit from what may be a prolonged period of mass popularisation and growth. But this only achievable if the the previously narrow perception – itself a natural result of historical experience - toward the market and so products and service is expanded to relate to demographic and fiscal change.

Moreover, why the motor-caravan sector must be viewed by manufacturers and investors, not as a discrete isolated sub-section of the camping genre, with little more than production synergies with tow-caravans, but as perhaps the vanguard of the contemporary 'self-sustaining' 'eco-tech' zeitgeist.

Why the time has come for new thinking about how the motor-caravan sector can act as a catalyst – as part of a far broader agenda - for social change in greater acceptance of systems-based and personal-base eco-tech.

Eco-tech that may be scaled-up through the camping mini-economy and its 'staircase' of habitation types.

To this end, whilst Britain politically appears 'at odds' with Europe given the outcome of the recent Brussels meeting between EU leaders, the reality is that perhaps more than ever, the need for UK & European trade is greater than ever. And that relationship should serve the UK to learn, absorb and appropriate the best examples of eco-tech seen in Europe (typically Germany), both importing when desirable, but also being inspired to produce in the UK for the UK.

Hence the notion of a “British HYMER” (ideally many companies of such ilk), which can act as physical vehicles for personal and family leisure, and as critically technology-transfer platforms for the naton-wide acceptance of new era, multi-layered eco-tech.

This approach replicated by the big-players of the wide-span camping sector, so that 'intelligent motor-homes' can influence 'intelligent holiday chalets' to influence 'intelligent mainstream housing'

However, within the motor-caravan sector, because company fortunes have been so closely linked to the economic cycle, and much affected by 'boom and bust' periods, there seems a polarisation of company size and operational attitudes. An overly simplistic depiction is - the ambitious (perhaps financially leveraged) growth orientated enterprises that seek sector consolidation, versus family-run firms run on caution, operational cashflow and generational stability, (very much in the Mittelstand manner).

Though let down by its European partners, Germany still offers the philosophical basis of an economic model that could serve Britain very well into the future. One where the benefits of market and technical learning amongst all parties in a sector far outweigh the far more short-termist gains of the large player over the small player.

Whilst the age of credit driven corporate growth has not wholly diminished in the west , and will indeed underpin necessarily consolidation in certain speheres. But for the new growth arenas such as eco-tech, itself enabled through a renewed appreciation for nature and camping, the fact is that the large and small players of the sector will be far better served, as will the nation as a whole, from mutual respect and efforts to grow the overall 'economic cake'.

Friday, 2 December 2011

Micro Level Trends – UK Niche Industry (Part 2) – National Economic Revitalisation via Miles of Smiles


Previously, Part 1 sought to provide a general picture of why camping in its various guises, and motor-camping in particular, has seen a new resurgence as a consequence of both the necessary tightening of holiday budgets and the societal effect of globalisation.

It is a re-emergence of the notionally merged “pragmatic & poetic”

[NB The recent profitability losses at the camping company Blacks Leisure, looks to be resultant from a combination of both heavy overhead (shop / estate size), and slow reaction in company strategy to react to slowed general consumer sales – to which the company intendedly exposed itself for growth - and the fierce cut-price competition by major supermarket chains. This then not a result of what is generally a buoyant camping market].

The Part 1 picture highlighted how the camper-van and motor-home sector has been influenced by new entrants serving new traveller markets – primarily young, but also across the age-spectrum – and how the traditional manufacturers of conventional high quality product must now look the the challenge of a new, arguably much changed, era; both externally amongst the (potential) market demographic and inwardly regards sector competition, which itself appears re-heated with evolving product offerings.

This evolution, as part of the race for market share and growth, exists from the consumer's perspective at (often intertwined) brand and technological levels. Whilst the race for company profitability will invariably take the M&A path for the biggest players with easier credit availability or cash-cushioned balance sheets.

Sector Overview -

The motor-caravan sector is very much interwoven with the broader camping and caravanning sector, both 'downstream' and 'upstream'.

Interaction 'downstream' is with end-users – the consumer - where all types of camping preferences tend to mingle within dedicated camping / leisure parks. Though there will be segmentation of sorts in high-use parks with hard-standing surfaces for vacation vehicles, often in more remote or beauty-spot areas the camper-vans, towed-caravans and 2/3/4 dome tents and large family tents will sit sporadically together. And of course depending of an owner's preferences and needs and the type of vehicle, a motor-caravan may be used in conjunction with not just an awning for light weather protection, but tent-extension or separate tent for full weather conditions.

Thus, motor-caravans are invariably cross-related with a raft of other types of camping product. Unsurprisingly, most so at the lowest price bracket where size and function are more limited, and with an increasing rate of separation from the more temporary an less comfortable 'tent world' as the price ladder is climbed, with concurrent increase in product utility, so independence and self-sustainability.

Again, unsurprisingly, it is the level of product sophistication that determines exactly how that camping interweave operates 'upstream' amongst product manufacturers and the sector's supplier-base. Some some firms assemble both motor-caravans and tow-caravans, seeking commonality where possible in construction materials and techniques and habitation systems, features and fittings. And further upstream still, amongst the supplier base, companies design and market their structural components, (water & energy) living systems, white goods and brown goods for required 'semi-permanent' compact habitation, whether a motor-home, caravan or chalet-type building.

(Please view accompanying graphic at top of page)

Thus whilst there are distinct camping products, the business dimension, both 'downstream' and 'upstream', is as a result of evolutionary history, has great cross-fertilisation, both in its technology solutions, and increasingly regards the horizontal and vertical business models that have been formed, especially so by the value-seeking of private equity companies.

Product Definition -

As a point of clarity, a simple definition of vehicle types is as follows:

Camper-Van = Conversion of Panel/Passenger Van vehicle
Motor-Home = Conversion of Chassis-Cab vehicle

Sector History -

In days gone by the UK produced both variants on (notionally) British vehicles, ranging from (GM-Vauxhall) Bedford, to (Ford) Thames in the more affluent 1960s and across the smaller car derived van arena including Morris Marinas and Ford Escorts in the less affluent 1970s. As national wealth grew after the deflated 1970s, so camping popularity declined in the face of affordable foreign travel.

Yet though many producers failed to survive, some old names continued, accompanied by new names in the 1980s, 1990s and beyond. During this era the only 'indigenous' van left was the Ford Transit made in Southampton – and thus close to the skilled and adaptable labor force from the boat-building sector. GM's Luton factory that previously made Bedford vans later made an agreement with Renault to contract manufacture its Trafic and Master models, and sold in re-badged form as Vauxhall (& Nissan) to date. Thus these 'British-ised' models served as platform for camper-vans and motor-homes for a long period.

But the scale growth of both FIAT-PSA, Renault, Volkswagen & Mercedes in commercial vehicle interests across Europe plus increasingly available wholesale credit terms to business customers (fleet operators and van-converters alike) meant that these 4 brands have become the dominant force in the UK, whilst smaller FIAT-PSA car-derived vans also serve the lower price points of the market.

Thus today the following models underpin the sector: FIAT Ducato / Peugeot Boxer, Renault Trafic & Master, Volkswagen T5 and Mercedes Sprinter all across medium-large vehicles, whilst Citroen tends to be preferred by converters of smaller vans (probably thanks to the slightly lower pricing and liberal credit terms than its competitors) along with FIAT Scudo & Doblo models.

Sector Participants -

Below is a non-exhaustive listing of the main manufacturers, by name, location, year established (if available), models offered and other business activities (if undertaken):

[NB not dealers which form a major element of the industry]

Autocruise Van Conversions Ltd
- Cottingham, Hull, East Yorkshire
- Models: Autocruise, Pioneer, Thoroughbred

[NB a holding of Swift Group – see end of list]

Auto-Sleepers Ltd
- Worcestershire
- Est 1961
- Models: Compact, Coachbuilt, Premier, Monocoque
- Motor-Vans and Caravans since 2010 (AS Brand)

Auto-Trail Ltd
- Grimsby, Lincolnshire
- Est 1982
- Models: Tracker, Apache, Frontier

Bentley Motorhomes
[NB not VW Bentley Motorcars affiliated]
- Mexborough, Doncaster, Yorkshire
- Est 2009
- Models: Artisan Range - ochre, indego, cobalt, cerise
- Models: Signature Range - Cauldwell, Donington, Oulton (race circuits)

(This company appears to legitimately use 'associative titling'. Its founders Mssrs Bentley (father & son) reflective of the 1920s 'Bentley Boys', its products reflective of UK race-tracks, and its in-built energy management system named EOS (Energy Optimisation System for energy and water)
reflective of the VW Eos convertible. Thus heavily brand associative)

Bilbo's Design
- South Godstone, Surrey
- Est 1977
- Models: SE, Komba, Celex, Nexa

Concept Multi-Car Ltd
- Hythe, Kent
- Est 1988
- Main Conversion Agent for Reimo GmbH

Danbury Motorcaravans
- Danbury, Bristol
- Est 1970s
- Models: Dynamic, Versito, Surf / Active / Royale
- Models: Amigo (VW Type 2 imported from Brazil)

Devon Conversions
- Ferry Hill, County Durham (formerly Sidmouth)
- Est 1956
- Models: Tempest, Monte Carlo, Aztec, Moonraker, Sundowner, Sapphire

[NB such is the legend of Devon Conversions in the UK on VW T2 vehicles in the 1960s & 1970s that other now Devon based converters with new VW T5 vans mimic the name for its brand equity]

Explorer Group (Elddis Brand)
- Consett, County Durham
- Est 1964
- Models: Autoquest, , Aspire
- Motorhomes & Tow-Caravans

G&P Campervan
- Stafford, Staffordshire
- Est 1996
- Models: Client Commission basis

Hillside Leisure Ltd
- Derby, Derbyshire
- Est 2004
- Models: Client Conversions, New & Used Vans

IH Motorcampers
- Knottingly, West Yorkshire
- Est 1992
- Models: J-series, C-series

MURVI Motorcaravans Ltd
- Ivybridge, Plymouth, Devon.
- Est 1979
- Models: Piccolo, Morello, Meteor, Morocco, Mallard
- SVO section for vehicle adaption for less-abled users

Romahome Ltd
- Cowes, Isle of Wight
- Est 2001 (formerly 1982 otherwise known)
- Models: R10 PSA FIAT Doblo, R20 (hi & lo), R25, R30
- Specialists in smaller van conversions

Swift Group
- Cottingham, East Yorkshire
- Est 1965
- Models: Autocruise (Ducato Van), Escape, Ducato Chassis cab, Swift Sundance, Swift Bolero, Swift Kon-Tiki (PSA Boxer) / Bessacarr E400 / E500 / E700
- Camper-Vans, Motor-Homes, Tow-Caravans & Holiday Homes

[NB the largest player as a brand/company consolidator via M&A in the sector & industry, and also recognises the importance of 'leveraging the brand' by advertising via and swapping the original van manufacturer's front grill badge (typically FIAT) for its own]

The Basic Business Model -

The model typically consists of:

- Direct Sales
- Indirect Sales
- Product Hire
- After Sales Services
- After Sales Products
- Product Refurbishment

Direct Sales:
The motor-caravan company's typical business model is that of own brand manufacture so as to try and grow own brand equity in the national market-place. The perception of product build quality has been the historical differentiator, and often quoted as the reason for new 'pseudo-visionary' builders to either set-up on their own from a previous manufacturer or enter the market-space anew. However, given that product materials and build methods are systemically very similar, and that incremental quality improvements over time have raised the standards for all, the importance of brand power has come to the fore - as was described in the summary of Bentley Motorhomes, and its targeting of psychological associations.

Indirect Sales:
However, given the level of geographic and pricing competition, the long-term ideal of market dominance may be accompanied by the tactical diversion of contract manufacture agreements for others. These usually non-direct compete tow-caravan producers that wish to introduce a new motor-caravan range to supplement themselves. Whilst this then gives smaller ex-factory product margins, and may be seen a engendered back-door direct competition, it does offer the potential for a second income stream which depending of market analysis may be viewed as complementary, and depending on firm's cash-book, P&L and balance sheet positions, may be considered necessary.

Product Hire:
In a bid to expand market recognition in camp-sites and on the road, depending on staffing resources, some firms will hire out their products, either for themselves directly to the public or to established dealers that offer the service using new vehicles, so as to maintain their own reputations. as premium providers.

This then provides an immediate market for new build products, but may run the risk of over-exposing the brand on the used product market 18-24 months later. If substantial numbers are made available for rent, this may cause a relative glut on the used market, so diminishing residual values and by defacto measure prohibiting new vehicle pricing elasticity that may be required depending upon company fortunes.

After Sales Services :
As is the norm, an after-sales service seeks to maintain strong customer connection so as to gain additional customer interaction for sale of complementary, services, products and ideally repeat purchase of the 'big-ticket' camper-van/motor-home at a future date.
General e-mail & telephone assistance regards low-level product maintenance issues are typically provided for free as part of general customer-care package.
As with VMs or niche producers selling conventional cars and vans in a direct sales manner, mechanical servicing, accident repair and product guarantee replacement offers an important income stream. Though unlike major volume producers of cars that now tend to include this service as 'whole package fixed' at the point of sale, and like their niche car counterparts, the motor-caravan sector conventionally sells the mechanical servicing aspect as a separate item, engine servicing (at specific mileages) undertaken alongside required maintenance of body structure, systems, fixtures and fittings. Thus this may provide two incomes streams (engine & cabin) and the relative complexity of the latter, especially in older high-use vehicles, may offer important income, especially so during recessionary periods when new product sales slump.
Cultural :
The brand-cultural link tends to be important, as motor-caravanners, like two-caravanners – though sociable tend also to have a natural tribal affiliation for those that bought similarly. This seen on camp-sites by separate owners comparing notes, but also promoted by word of mouth amongst caravanning groups with those who want to 'fit-in' buying similarly, aswell as episodes where groups of two or more friends (often couples) seek to buy similarly for both sociological reasons and economic ones when seeking a discount for multiple buys.
But immersion into that brand tribal culture typically starts with (the industry standard exercise of) a pre-purchase factory tour. This of course seeks to draw the prospective buyer into the fold through personable relations with customer service staff, and if a family owned company, pseudo-intimate dealings.
Specific brand-related club tours also offer additional income, organised by the company itself it acts in the manner of a holiday package tour operator, undertaking preferred camp-site bookings and organising excursions on behalf of its club-members so eliminating the hassle for them, whilst taking a margin from the group discounts obtained. The factory itself often used as the start/end point of the tour.

After Sales Products:
These refer to those functional ancilleries and cosmetic accessories that are needed, wanted or desired by new and current owners. These range from anti-theft wheel-locking devices to stationary vehicle skirts (to hide 'unsightly' wheels when camped) to awnings to a host of other items. These may be purchased from a leisure camping retailer by owners themselves, but often prefer to obtain via their van-maker if the inventory is sold. This tends to offer small margin income.

Product Refurbishment:
In the distant past product refurbishment of older motor-caravans was a stable business, but increased consumer wealth and easier credit terms meant that from the 1980s onward refurbishment was vastly overtaken by repeat new sales. However, economic downturns obviously tend to impede repeat sales, people extending ownership periods and investigating the cost of light refurbishment to help refresh and modernise their 'pride and joy'.
However, given that such projects are typically limited to only upholstery, fabrics and soft-furnishing changes - seating, bedding & curtains – what appears a low-cost 'refurb' to the owner infact will be relatively labour intensive for the producer, and may only realistically be undertaken by manufacturers with 'full-house' operations that include in-house trimming. Such jobs will also effect production scheduling. Thus the costed price of a 'refurb' by a manufacturer may well end-up prohibitively high.
This type of work is then more typically undertaken by caravan repairers (such as CoachCraft & Leisure of Redruth in Cornwall), themselves specifically set-up in a more remote low-cost location and reliant on broad (mail-delivered) supplier network for fabrics etc.
Nonetheless, the refurbishment arena looks set to grow given these 'austerity times' so UK manufacturers might do well to grow their own links with the repair sector so as to both grow the 'refurb' business as a substitute for new sales.

Core Manufacturing Activity -

The central business model of manufacture itself typically relies upon the containment of low overheads via what is usually a mix of core long-stay staff, especially so on the factory floor , assisted by semi-skilled or un-skilled low cost labour either on short-term contracts; usually in an apprentice-type arrangement whereby skills can be gradually developed whilst necessarily maintaining as low a staffing overhead as possible.

[NB In recent years however, it has been possible to employ practical, proficient and cost-effective staff from Eastern European, many of which have carpentry and fabrication backgrounds].

Middle management have either tended to rise from the shop-floor and surrounding functions through years of experience. Senior management tends to either be family-based if family owned, or brought in from other similar competitor firms in the usual effort bid to replicate success and grow market share, or from other corners of associated industries depending upon strategic need, or indeed from private equity or banking in a bid to 'shape-up' the business with a critical external eye.

Typically to serve professionalism and efficiency a large factory space on large site is the norm, itself often wholly owned or made available over decades with lease contracts that state that land rental equates to a potion of turnover or EBIT / EBITDA profits. Many sites either came from original engineering firm backgrounds, or from lease-sale as a result of UK agricultural decline in the 1960s/1970s, thus large tracts of land put to alternative commercial use at the time. This then provided for a large build facility / factory to be located on site with dedicated showroom and offices along with room for sizeable inventory storage.

Alternatively, the plethora of smaller businesses tend to operate from small family owned land holdings or small light-engineering business parks on the fringes of semi-rural towns, where synergistic activities take place by different firms.

However, increasing the polarity between large and small, sizeable capital investment efforts appear to have been made amongst the larger producers, especially the conglomerate that is Swift Group Ltd. Labour-saving new fabrication and assembly equipment has been purchased - such as vacuum assisted items for handling of large panels – to both ensure safe handing of large and costly panels, enable critical budget constraints on manpower size and importantly reduce the risk of technician injury which may lead to litigation, especially amongst short-term contract workers.

There seems a notable difference in capital expenditure dedicated to R&D between UK players versus those in Germany and France. The UK sector seems to devote the majority of its investment into land, plant equipment and back-office IT, whilst foreign manufacturers – the Germans specifically – direct what externally appear a far greater percentage of CapEx toward new technologically biased new product development (NPD) initiatives. Whilst NPD efforts are obviously undertaken in the UK so as to appear modern and attractive to the marketplace, it is primarily cosmetic and of low-technological challenge in nature, with those companies with the greatest financial standing emphasising new model year vehicles through annual changes to paint, colour and trim changes as well as external and internal fixtures and fittings – thus following the car industry norm engrained since the 1950s – and extolling the mechanical R&D changes in the base vehicle from the VM source.

[NB It should be noted that often both UK and European companies source specific proprietary items from the same supplier, especially in the white and brown goods arena. Hence a 'quality-name' kitchen or entertainment system item (ie Siemens or B&O) helps to ratify the quality product's 'look and feel' and its price point].

Though it should also be recognised that unconventional 'blue-sky' and 'hi-design' whilst useful as futurist vision projects for student exercises for inspiration or simply PR exercises, are rarely ever undertaken by mainstream producers, who recognise the innate camping-vehicle formula as being “conventional with a twist”, not radical or overtly futuristic.

Because of the highly competitive nature of the continental marketplace, the Europeans in particular seem to devote more time, effort and monies toward deeper technical competence and USP, relative to both the product's structural build and eco-tech habitation systems in the HVAC sphere (Heating, Ventilation & Air-Conditioning), whilst on-par or possibly even behind the British emphasis on fashion.

As stated previously, periodically time-limited marketing ties between motor-van producers and tow-caravan producers have been formed to on a contract manufacturing basis for a series of motor-caravans (or vice versa tow-caravans). Yet, whilst still deemed a useful initiative as a result of spare production capacity and / or at the supposed behest of customers - via dealership feedback – there appears a renewed desire to try and avoid such tactics given the loss of brand equity if recognised as producing badge-engineered products, the smaller margins therein and an inability to quality control other manufacturer's product sold under the company marque.

Foreign Competition -

The size of the motor-camping sector on the continent is vast, with a greater motor-camping heritage than Britain a consequence of obvious greater inter-national connectivity, most European countries – but especially so in Germany and France, followed by Italy and with Spain a recent scale newcomer given the level of standard van production in the country.

There is little point in listing all manufacturers, but some are listed as follows:

Germany: Bavaria, BreslaMobile, Burstner, Carthago, Concorde, Dopfer, Eberhardt, Eura, Fischer, Frankia, FR-Mobil, Grimm, Hehn-Mobil, Hobby, HRZ, HYMER, Joko, Karmann-mobil, Knaus, LMC, Moncayo, Niesmann&Bischoff, Phoenix, Procab (off-road), Silverdream, Tischer (pick-up truck bed), Vario-mobile (HGV sized), Varius, Wochnermobil, Woelcke (multi-segment),
France: Adria, CSA Gerard, Citi-Van, Dethleffs, Eriba, Esterel, Fleurette, Notin, Pilote, Rapido,
Italy: Arca, Caravans International, Laika, Le Voyageur, Mobilvetta, Giottiline,
Spain: Benimar

In addition, the main VM van manufacturers have renewed interest in this sector, with Volkswagen, Ford, FIAT, Iveco, Mercedes-Benz, Renault offering 'factory-made' van conversions

Thus we see that Germany has (over) 30 prime manufacturers, France (over) 10, Italy (over) 6 and Spain with 1 (but probably seeking more similar).

As listed the UK has (over) 14 prime manufacturers. Upon this 'loose' basis – without the visibility of sector value (turnover, profitability, size of workforce employed, its national 'value-addedness') - stands at only half the size of Germany, but critically ahead of the remaining European countries.

Sector Evolution -

The economic impact Eurozone crisis will have taken a toll upon the sales of new motor-homes, especially so in Italy and Spain, and whilst German producers though not wholly untouched will be buoyed by the slowed but still fundamentally healthy national economy and from the usual “Buy German” homeland sentiment.

The UK itself has also obviously been affected by the down-turn, thus sales trending will have been lower since 2009. Yet whilst not perhaps as unscathed as Germany, the fact that many of the UK's motor-caravanners are in the 50+ age-group, still have relatively secure public sector jobs, have assured pension schemes and often the option of early retirement so as to enjoy their travelling leisure time.

This demographic trend, plus a generally ageing UK population seeking similar leisure time travelling, and the emergence of budget conscious young families looking to join 'Jamie Oliver's Convoy'

In the mid-term and long-run, growth patterns in the sector look to continue, pulling-back after the recent 'blip' resulting from the 'new economic norm'. That gives a consequential expansion of varying consumer-types (ie target demographics in marketing parlance) creating additional attraction for further new sector entrants offering products and services across a broader band of price levels (ie in the lower sectors), with additional differentiation introduced.

Thus a new-norm for camping and motor-camping specifically sees a broader more cost-conscious marketplace, which although still encompassing the 'wealthy grey participants' that boosted the premium segments of the sector before 2009, is nevertheless fundamentally altered by recent socio-economic events.

Whereas previously the market consisted of a growing but still relatively 'thin' market of 'premium' and 'semi-premium' users with deep pockets and extended leisure time, they are now joined by very different groups that have arrived from the 'bottom-up' by way of age and disposable spending patterns.

This then sets the scene for gradual overall market expansion, thanks to the arrival of new segments. However, though the broad market will expand en mass, that is not to say that sector consolidation will not continue, especially in the well established upper-segments, as 'trade-buyers' and 'PE buyers' seek cross company and value chain synergies.

Thus investment-auto-motives expects to see further consolidation as exemplified by the market leader Swift Group Ltd, either by itself after it 'operationally digests' the acquisitions to date, but just as likely, the appearance of another consolidating holding company seeking to acquire so as to compete against Swift Group's seeming relentless rise.

Expect to see over the long run new efforts then to maximise the efficiencies and synergies of what have been to date separate interest companies, and indeed very probably new efforts from those consolidators to reach into the emergent lower-end of the market using a high volume-based business model basis, as well as having to necessarily try and develop distinct premium brands.

Thus the importance of branding and perfectly assimilated understanding of all target groups' functional and emotional needs will be required..

Aspiring to Generic Status -

Unless a participant or connoisseur of the arena, most British people will be hard-pressed to name any UK brand of campervan or motor-home producer.

Talk of cars and people will instinctively mention renowned names like Rolls-Royce Motors, Bentley Motors, Jaguar, Land Rover and McLaren, even if they realistically be now wholly or partly foreign owned, their lineage and aspirational qualities, and in days gone by would have mentioned the many now defunct names that thrived, then died in the 20th century.

To most British the word 'camper-van' generates the notion of the classic VW camper, an trendy image seen everywhere in consumer culture from T-shirts to mugs, with no debate about any other pretender to the iconographic throne. High sums are spent because the image-equity is so great.

And to most, the word 'motor-home' brings forth images of massive, luxuriously appointed vehicles peppered around film-sets for the stars, or in the paddock of the F1 motor-racing circuits.

But elsewhere, especially in the US and Europe, a social history far more aligned to the great outdoors and cross-border travel means that certain brands have become almost 'generic' representing the motor-caravan sector's products.

By far the best known are Winnebago, Airstream and HYMER, (all whom either currently sell or look set to sell product to sub-segment markets in the UK).

[NB The UK's 'retro-romantic' Devon brand, associated with 1960s camper conversions also exists, but far more distant in the popular consciousness and really only known by camper-van owners].

Winnebago represents the Spirit of Freedom in America, a seeming modern-day successor of the 18th & 19th centuries Pioneer's Wagons, ironically mixing with notions of a latter-day 1960s 'Route 66' travelling counter-culture with the reality of comfort and vehicle size that means that the 'Easy Rider' Harley Davidson can be stored on-board for periodic rides into the local town when parked up in a suburban leisure park. Furthemore, it serves the NASCAR racers and organisers, so sits at the very heart of US automania. Given these deep-seated cultural connetations, and the transatlantic influence, the name Winnebago has greater recognition than the plethora of little-known, indeed unknown. UK brands. Tough times in 2007 forced a strategic re-think which appears to have led to the film 'Winnebago Man' about a “tell it how it is” salesman, and though unstated, who's 'no-bull' attitude reflects that of the typical product owner.

Airstream, is equally well known, although its roots and prime recognition is in the tow-caravan sector, what it calls “Travel Trailers”. However, it has on-and-off produced motor-homes since the 1960s to compete with Winnebago, today operating in the smaller product categories based on a Chevrolet van and Mercedes' Sprinter van, yet holding the contract for sale to US government officials that require travel-spaces. However even though it be heavily tow-caravan biased, the brand Airstream – once again because of 'Americana' – holds greater renown that any UK manufacturer. It of course became legendary for its comprehensive use of aluminium, its structural frame and riveted material application taken from the aerospace industry of the 1920s & 1930s.

HYMER of Germany very probably holds the highest brand recognition in the sector amongst most Europeans, and though a marginal name versus car or truck brands, in Europe it has earned itself almost the same level of brand-equity as Winnebago or Airstream in their home continent. It has that semi-iconoc status because of its long history and because of its innovative attitude toward product improvement, its originators, like Airstream, utilising aircraft engineering know-how and recognsing the importance of vehicle packaging by avoiding the then rear-engined VW van Today, it produces both motor-homes and tow-caravans, with 10 models of the former ranging across 'integrated' (ie mono-body) and 'semi-integrated' (ie chassis-cab) classes of varying size. With its self-termed uses of 'C-class', 'S-class' & 'SL-class' there is obvious associative reference to Mercedes Car's nomenclature, with even greater automotive cross-pollination with use of the name HYMERCAR, and even greater connect with a Brabus-linked edition motor-home named the 655SL, using a tuned Brabus engine and Brabus wheels. Perhaps not wholly beautiful animal and an odd cross-breed, but nevertheless a firm product statement to try and further segment the sector through differentiation and premium co-branding.

As stated, “Devon” (Camper) Conversions is perhaps the best known of liitle known producers group. It appears still a family owned business, under current ownership for the last 21 years. However the business moved away from Sidmouth in Devon in the South West to the North East's County Durham some years ago to create a modern, spacious factory and showroom. That necessary move though probably part damaged the marque's affiliation to its origins and thus somewhat lost its romantic connection with Devon beaches and countryside. That opportunity for the actual Devon location referenced in names taken-up by others.

So as we see, there is no brand in the UK that can claim to be so legendary in the sector as to have become the generic – such as “Hoover” or “Kleenex” – thus without the general popularist impact of the success stories at Winnebago, Airstream and HYMER.

Creating the Legend -

The success of these respective brands across the US and Europe conform to the historical differences in business approach that lay at the heart of yesteryear and today's management cultures.

The 3 foreign firms previously mentioned seemingly took 3 distinct paths into their respective futures based upon either financial leverage/equity building, product innovation, or a marriage of the two.

In the US, it seems that Wall Street sourced debt financing allied with benefit of a very large and homogeneous USA marketplace and American soft-power foreign influence allowed for massive cross-America and inter-national expansion strategy.

This perhaps best seen by Iowa based Winnebago Industries expansion programme from its Modernistic Industries' roots, and the subsequent NYSE public listing that gave it financial fire-power.

Airstream married progressive technology with the heyday of American capital markets, able to initially secure its differentiated position amongst competitors through aluminium construction and later – part of Thor Industries own public listing – was able to 'spring-board' itself forward through sizeable equity financing.

In typical German manner, HYMER was started by father and son engineers, who as stated relied upon product USP and functional value to grow their business, which has stayed privately financed for many years from 1923 until undertaking its own IPO on the Frankfurt Exchange at the beginning of 1991. However, the fact that the Hymer family-held holding company (named 'Erwin Hymer') still holds 74.5% of the stock-base, highlights the keenness to retain family control.

Critically, unlike the boom and bust years of Winnebago and Airstream, unsurprisingly with such generational long control and oversight, the HYMER story has been one of stability and constant growth, relying upon both product innovation and financial temperance to guide the company forward over the long-term.

Lessons from History -

It would probably be true to say that the UK market is the most intensely competitive market compared to Germany, continental Europe or North America. Given a smaller motor-camping population relative to the other nations, it would be no surprise to find via deep and meaningful market analysis, that the ratio between manufacturers & per head participant basis is lower in Britain here than anywhere else.

From an investment perspective then, such a national picture highlights the criticality of thorough and insightful 'top-down' sector analysis and 'bottom-up' company analysis. Although investment-auto-motives posits that much of the sector's fortuitous future depends upon technical innovation and cross-fertilisation of that progress with more mainstream static housing, so as to attract investment and improve multi-application margins, the sector's history has pointedly been one of understandable cost-abatement and scale efficiencies.

But it has been a boom & bust model that as a result could be said to have undermined the long-run of the broader sector.

Undoubtedly, the archetypical case-study well remembered in the industry itself was the created and subsequently lost fame and fortune of Caravans International.

'CI' as it was colloquially known was built-up by East London born Sam Alper. Having established Alperson Caravans after WW2 and gained much popularity for its Sprite model, producing cash partly used to acquire competitor Bluebird and Eccles companies; and so form 'CI' in 1963. Recognition, awards and a flourishing business followed through the 1960s and 1970s as CI leveraged great force and consolidated the tow-caravan sector. During this period Alper also set-up a table-top game producer and the renowned Little Chef roadside restaurant chain, thus seeking income from a complementary business strategy, seemingly using the financial success of 'CI' to do so. However, the economic down-turn of the late 1970s and early 1980 saw caravan sales plummet and as a result of this, plus very possibly the sizable distribution of company funds to new Alper projects, financial-indebtedness saw the company collapse in 1983.

[NB What seems remarkable in retrospect is that Alper, MD of the biggest producer, also held the notionally independent post of Treasurer of the sector's industry body, the National Caravan Council. This is not to suggest any impropriety, simply that such links today would probably be frowned upon].

A Modern-Day Re-Play of 'C.I.' ?

Today the Sprite name exists as a sub-brand of Swift Group, the contemporary sector consolidator that could be viewed as the ambitious spiritual successor to 'CI'. A company press release demonstrating its ambitions:

"a multi million pound investment programme in online technology enables dealers not only to order online, but also to check product availability and delivery dates. Spare parts and after sales service are also vital parts of the Group operation. Dealers have access to online systems, helping them to identify parts, many by photograph. They can also submit Pre Delivery Inspection checks and claim for warranty work using the same industry leading system"

Thus we see the transformative effect Swift seeks to achieve through its own operational streamlining and dealer & customer connectedness. However, in direct contrast to the charismatic (over-dependent) single-leader model of the 'CI' business, Swift Group Ltd is led by recently new CEO James Buckley, who in turn cannot feasibly act as company hero or tyrant as he must report to the BoD of Swift Holdings UK Ltd (Peter Smith as Chairman) – itself with a broad portfolio of motor-home, caravan and holiday home interests.

Thus the marriage of consensus, accountability and multiple (broad-background) directors' inputs, plus a far more close-knit set of industrial interests (relative to Alper's games and restaurants) has set a template for far greater stability than was the case at 'CI' a generation ago.

So to answer the question “is Swift Group a modern-day re-play of 'C.I.' ? The firm's basic structure appears thankfully not, which should aid fundamental stability to the sector itself.

Swift Group then has – for obvious profit maximisation - undertaken the transformative challenge of the sector, moving beyond the usual basics of overt product focus - which often takes bias of attention – toward far greater integration of the business whole, especially CRM, through the deployment of IT systems.

However, whilst new visible IT enabling of the sales-front, and its 'invisible' counterpart in back-office are vital to said 'streamlining', the product of course should not be over-looked. This too has been recognised by the company and the previous appointment of a new design director implies that NPD work will not falter.

Yet, it must be stated that the sector as a whole, and perhaps particularly Swift Group, would benefit by uncoupling itself from NPD directed at styling, the cosmetic and low-value functional changes.
There must be a renewal of a true 'design' philosophy that merges both the aesthetic and the engineered, one by which new forms of innovation in body structure and habitation systems can be achieved; and ideally latterly applied to more the more permanent variety of habitation, in chalets/ cabins, bigger holiday-homes and through to conventional apartment and house builds.

The “British HYMER” Ambition -

To this end the UK should seek to develop a renaissance of the progressive R&D culture that obviously existed across the motor-camping & tow-caravan sector all those decades ago. One seemingly lost by natural convergence on industry standard solutions, which themselves as critical aspects of the business model sought to be cost-effective enough to withstand the boom and bust periods previously endured.

And as with most R&D, it should ideally take a two-track approach that looks to both incremental improvement of current materials and processes and to the possibility of the type of 'leap-frog' change seen by the likes of Airstream and HYMER during their own creation and histories.

Though Airstream is the better known brand in the UK, the prime case study must be HYMER AG, given the manner in which it transformed the sector with typical German zeal of the applied scientific to create what was in the early1980s a dramatic step-change in structural and habitaion quality. As itself notes “the functional needs of motor-home, given thin skin technology, must outperform conventional buildings”; introducing a 6-year anti-ingress guarantee in 1985.

[NB whilst a host of other firms have copied the basic foam sandwich construction method, none it seems have managed to equal HYMER to this day given its experience and no doubt patent rights on the proprietary system].

Though far more easily said than done, British producers must now emulate such past achievemnts which have proven themselves as the foundation-stone to product and so company success.

Given the size and market strength of Swift Group one would expect such progress to come from such a big player. And though such ambitions may indeed exist at Board level at Swift Group – given its ability to deploy across its portfolio – it would perhaps be even better if such a UK ambition were supported by the National Caravan Council, acting as central development hub for a consortium of players whereby a percentage of respective turnover is matched by government funds, or perhaps a portion of the housing project development monies is given to specific participants on a phase by phase development basis, or indeed offering 'prize money' similar to the manner of America's “X-Prize” Foundation.

Whatever the route to innovation - as the energy challenge and carbon-footprint stories become ever more crystallised in the wide consumer experience - it could and should become a major determinant of success for individual company's, the sector at large and ideally itself as a vehicle for philosophical change through a trickle-down process into the 21st century habitation demands of the wider world.

To Follow -

In the final Part 3 of this sequence, investment-auto-motives takes a brief look at the HYMER case-study together with the simple but important progress made by a similar German company AL-KO.

Working from these success stories, the essay looks (very basically) at the general areas where further technical progress may be made with a concentration of manufacturer and supplier co-operation, organised through a UK trade association.

To compliment this, investment-auto-motives posits the need for a philosophical re-moulding of how investment itself is deployed, thus the manner in which The City itself views, and indeed, assists the sector, balancing the necessary capital stewardship and returns maximisation view with a now necessary longer-term outlook.

Saturday, 26 November 2011

Micro Level Trends – UK Niche Industry (Part 1) – National Economic Revitalisation via Miles of Smiles

The last web-log looked at how a long established but little known private African company sought to extract value by matching its competence in van fabrication with the very real 'workaday' needs of its nation.

This investigation looks at a specific sector of the of UK auto-industry, similarly inhabited by a plethora of private companies, yet one reliant on a similar assembly production skill-set - though with more exacting standards – directed at the camper-van and motor-home 'leisure' market.

Thus whilst focused on technically similar products – converted vans and specialist body built chassis cabs - the 'erratic vs stable' developmental experience of the companies' very different continents and country's over the last 50 years fostered very different commercial market ends.

[NB though it must be remembered that the previously mentioned KVM does indeed provide safari / tour / camping vehicle solutions as commissioned].

However, within Britain, the previous general upward trajectory that lasted those 50 years with periodic lulls, is now well recognised as the last portion of a western dominated golden-age in global trade, an era which has now come to an abrupt end. Whilst Britain is far better placed than many of its European neighbours from a Debt:GDP perspective, it does not have the liquidity fire-power that the US can muster nor its geo-political strength, as recently seen by US visits to the Pacific Rim.

Thus whilst on the right fiscal constraint path to engender mid-term balancing of national budgets, realistically the growth element so desperately sought and discussed here and now, is still some time away. Britain has a very tough upward economic battle and new growth 'green shoots' can only be expected to 'take' and prosper in the right fiscal, regulatory and societal climate...a climate not yet arrived.

Yet there is an obvious imperative that the efforts undertaken by which to stimulate tomorrow's growth should be crafted in the near-term.

To assist this end, investment-auto-motives reviews the UK motor-caravan sector from 3 perspectives, to be relayed over the following weeks.

Part 1 – Social Dynamic: affects the marketplace.
Part 2 – Sector Participants: must assess the terrain and 'visioneer'.
Part 3 – Eco-Tech Transfer: from fringe to mainstream habitation.

In its own 'below the radar' manner the UK's motor-camping sector may be able to provide a relatively small but important contribution to that growth, acting on a local and regional level firm by firm, but also at a national level across various synergistic industrial sectors. investment-auto-motives views this segment as perhaps having the capability - acting in concert with many others - to operate as a small but useful 'economic starter-motor' which in turn assists a re-modelled 'national economic engine' which itself adopts 'eco-tech' learning for broader application from the motor-caravan sector itself; the sector in turn a funnel for best practice acquired from foreign leaders in 'green-tech'.

The following then is a very general overview of the British camper-van & motor-home sector, part of the far broader 'leisure camping' industry.

Motor-Camping in Context -

Whilst investment-auto-motives believes that it is the arena of motor-camping that can serve as a fundamental catalyst toward a revitalised eco-tech orientated future, it must be recognised as one aspect of a muti-dimensional arena.

Today camping per se spans from the very low priced to very expensive.

Ranging across: pseudo-disposable two-man tents directed at music festivals through lightweight walking & cycle-touring dedicated equipment; motor-bike tour items; the towed trailer-caravan segment covering tiny 'aero-pods' for small hatchback cars right up to large 5th wheel trailers for heavy duty pick-up trucks; typically large static-site caravans; chalets of varying standards and the more recent introduction of 'glamping' – a portmanteu of 'glamourous camping' - which encompasses luxuriously appointed themed tents, from Red-Indian Tepee to African Safari to Bedouin tents

Dramatic Growth of Camping -

Statistics gathered by the Office for National Statistics show that in 2009 a total of 5.43 million
camping trips, an massive increase of 29% compared to the previous year. It appears a watershed year since this number the overtook official recordings of B&B (Bed and Breakfast) stays in conventional buildings which itself attracted 4.98 million stays.

[NB however, it should be noted that the propensity for campers to undertake more trips through the year is generally greater than for those who use B&B accommodation. It should also be recognised that because that because the B&B is often the lower cost option for business trips (especially touring groups such blue-collar manual labourers) this may muddy the official statistics].

The ONS stated that in 2010 holiday visits abroad decreased by 12 per cent to 36.9 million compared to 2009, highlighting a trend for low cost nation-based holidays (ie camping) and for post financial crisis 'staycations'. So a definite expectation that couples and families had philosophically migrated to the homeland outdoors alternative.

The Middle-Class Rallye -

During mid 2010 the Telegraph newspaper reported a survey of 2,000 professionals from the AB1 socio-economic group, which discovered that over half were considering a camping trip that year, using their domestic bedding and travel technology like iPod docking stations.

The department store John Lewis noted the same year that wedding-list requests for camping equipment had increased by 44%.

This 'outdoorsy and stoic' British attitude bolstered and engrained by the now ubiqitous appearances of the 'Keep Calm & Carry On' sign on everything from mugs to T-shirts, providing a new sense of pseudo-defiant and semi-pioneering community...nicely complemented and balanced by the 'mix and match' opportunities afforded by the Kath Kidson range of countryside flora inspired goodies.

When the economy becomes tough, for the British middle classes the pragmatic meets the poetic. That sense of romanticism increasingly focused upon a recently grown consciousness for 'regionalism' and 'authenticity', harking back to a previous age of the rural idyll, exemplified by the popularity of local produce, farmers' markets, organic food, and arts and crafts – a less travelled idealised route toward William Morris rather than the much travelled one to Morrissons supermarket; even if that be the reality when stocking up for Cumbria or the Dales.

Even if presented in such a hyper-real manner, such outdoor activity allows the parents of 'molly-coddled', 'cotton-wool wrapped' 21st century children, to become albeit for a short but important time notionally re-connected with nature

For many of the 20-something set the activity is a natural extension to their lifestyle juxtaposition of summer music festival and travel-bound low budget gap years, cemented by and weight of accrued educational and travelling debt

A Clash of Holiday Cultures -

So whilst the conventional package holiday for families, couples and singles is far from dead and buried, this trend toward self-sufficiency and budget consciousness looks to perhaps become even higher up the leisure agenda thanks to the corporate and share-price suffering of the holiday firm Thomas Cook which demonstrating the financial woes of a contraction in general UK-outbound international travel and over-exuberance during its ravenous M&A period. It may or may not be “too big to fail”, all dependent upon re-financing methods, but for a new generation (ironically of all ages) that seeks partly packaged self-discovery culture imbued travel over the heavily faded 'attractions' of the Meditteranean, the watershed at Thomas Cook might be said to reflect a much re-orientated expectation of summer holidays themselves.

The 'back to nature' zeitgeist continues with an expected record attendance at the National Caravan, Motorhome and Camping Show to be held at London's EXCEL centre in February 2012

Of course, much of this new era is to be experienced under canvas, reminiscent of Scouting and Girl-Guides, and intentionally in dynamic contrast to the 1970s style experience for many of static caravans or chalets. But to avoid the worst of the weather there is a growing popularity for the motorised alternative.

Car-hitched caravanning has undoubtedly seen a remarkable re-emergence through the 2000s thanks to an ageing yet relatively wealthy grey-population who seek greater convenience and comfort from the car-caravan formula and don't care about the supposed 'caravan stigma'.

Focus on Motor-Camping -

But there has perhaps been a possibly greater upturn in demand and use of the smaller class of motor-caravans – ie camper-vans as opposed to motor-homes – by a younger demographic with shallower pockets; more cost effective and arguably for much of the year a more functional alternative to the car & caravan; given its innate self-propulsion, passenger car utility and van-like attributes throughout the holiday period, and if owned, throughout the full year.

A Renewed Camper-Van Culture

The re-emergence of camper-van is of course a cultural phenomenon much driven by the media and popular culture portrayal. The massive re-popularisation of the iconic VW camper (the Type 2) in original Split-Screen and later Bay Window guises comes from a merging of the previous retro-chic (as seen with New Beetle, New Mini & New Cinquecento) and the emergent hippy-esque counter-culture in reaction to suffocating corporatisation and 'packaged label-led lifestyles'.

But that rejection – or at least weekend and holiday period rejection – of the conventional by ironically employees of big corporates and authorities, is not just amongst the 20-somethings. Today's 30-somethings are not quite 'xerox' breed replicants of the '30-something' generation as depicted by the 1987-91 US television series of the same name.

Twenty years on things are different, even for 40-somethings. Though not wholly unlike that 'yuppy' era in terms of aspiration – an ever present human trait – today there appears greater attitudinal and lifestyle balance.

This reflected in the way that a 45 year old father might wear the same T-shirt, baggy ¾ length shorts and footwear as his wife, 7 year old son and indeed 5 year old daughter. Today the dynamic of many young families is that of extended youth for the parents and integration into that youth for the children, with an onus on a healthy pursuits lifestyle where gym membership has been replaced or complimented by the use of the functional family MPV, SUV or sporting estate car to enable weekend cycling trips and school-holiday camping trips.

Thus even with the supposed demise of the motherly school-run MPV, the 'FUNctional' vehicle in its many shapes is still very much with us, necessarily so as home owners once again re-discover their practical nature, having to recall what their dads taught them, and using the family vehicle for DIY materials haulage and trips to the recycling centre.

“Practicality” and “Regionalism” have become the contemporary watchwords.

Leading the Philosophical Convoy -

Unsurprisingly the near fetishistic world of TV food, and its conveying lens, reflects much of this. Herein for years the British public has grown-up with an enthusiastic, seemingly class-defying and multi-culturally inclusive national champion in the form of a now not quite so young, family man: Jamie Oliver.

His own televisual travels highlight the transcendence. Previously zooming around London on his scooter, then touring Southern Europe in his immaculate, expensive and much desired Split-Screen VW Kombi; but more recently whilst reviewing the foreign influence on British cuisine, doing so in an ex-army Bedford TK/MK truck, converted to house a wooden 'pub/kitchen'. The well known 1960s aspirational VW bus then replaced by a now little known odd-ball truck, reminiscent of a motorised old style Gypsy Caravan or the New Age Travellers of the early 1980s. Yet in its manufactured self a twist on the merged “Keep Calm...Kath Kidson” formula.

[NB the programme shows Jamie driving the large truck, but also a Land Rover Defender in certain scenes, thus beyond usual product placement by Land Rover, investment-auto-motives suspects that there is a possibility that TATA, the India conglomerate and maker of trucks and owner of Land Rover, may be seeking to co-align future truck imports / assembly in the UK, and so use the beneficial cross-relate to Land Rover vehicles]

A Convoy Derived from 'Glocalisation' -

The euphemistic term 'Glocalisation' has perhaps been over applied and misused in recent times, but undoubtedly reflects the backdrop to the emergent middle class 'eco-convoy' centred around camping.

Globalisation was emphatically the trend across the late 1990s and the 2000s decade, where West met East by way of not only a new round of western brand expansion across the globe, but for many 'Generation X & Yers' and the new 'Gen 21' general travel has become part of the life expectation. Those hoards of Backpackers themselves still seek new sights, but their own ageing into familydom and the constraints of the economic macro-reality indicates that such travel will be less 'global roaming' and more 'regional discovery'.

And of course, here in the UK much of the European discovery to be had was actually undertaken by young and not so young Australians and South Africans. And it was their own backgrounds of 'outdoors' living and camping that enabled them to embrace tent and van living when travelling across Europe.

New Market Entrants -

To serve that social shift new Van Rental business models were either created of imported, so expanding the UK market beyond the former more expensive, up-scale and older boundaries. The UK arrival of Australia & New Zealand's 'Wicked Campers' allowed ANZACs and now Brits to trek across the UK and Europe, the firm offering anything from a weekend package to a 3 month Van-Tour package.

[NB However, it seems that the firm advertises its campers as 'cars' since not only are many passenger car derived (ie MPVs) but done so to circumnavigate (gas and electricity use) safety laws]

Furthermore, others entered the sector using the classic VW camper as prime attraction, though typically in a smaller way, from the renting-out of a small fleet by enterprises like Devon Cool Campers or home-owned classic (less expensive) Bay-Window VW camper-van such as Hippy-Campers – a tactic also adopted by some established caravan dealers. Others modified other van and vehicle types into campers even if some realistically are not wholly fit for purpose.

It was clear then, that the traditional up-scale professionally converted and thus generally expensive camper-van and motor-home sector had been joined by – though not directly attacked – by a very different species of product.

The Japanese Experience -

Since the 2008 financial crisis and recognition that the future for the West looks far more economically subdued – at last recognised by as 'the new norm' – economists have almost delighted in the ability to apply parallel case studies from elsewhere; none more prosaic that Japan's 'lost decade'. This the obvious parallel given Japan's advanced country status meant that it was the vanguard of what has come to pass, and its painful ongoing process of cost-base devaluation

The cost-cutting constraints imposed on Japanese corporations so as to remain competitive came into lay in the mid 1990s, and of course impacted employee stability. The tale of redundant salary men (though less so women) has been told in Japanese film since. Less cinematic, but far more interesting have been the real-life social and consumer dynamic that took place as part of that process. Japanese growth over the 1980s saw a consumer boom in sales of smaller 4x4s and MPV's many of which were given mini RV (Recreational Vehicle) personalities. Nissan Prarie, Mitsubishi Space Wagon were of this ilk, later joined by special variants of Toyota Previa and Nissan Serena

Ironically though given the propensity to work by salary-men and take little holiday time, these vehicles sat outside homes, offices and shopping malls. Holidays that were taken were typically a flight away to a different part of Japan or to a foreign shore. The downturn ironically brought the RVs into being. Holidays by worried staff and management became far more regional, using the RV-car as the 'living pod', often parked in hotel car-parks so that the hotel's leisure facilities could be used on a pay-for day basis.

Corporate and independent hotel owners of course were partly angered given that rooms were left empty whilst singles, couples and sometimes families 'lived' in the car park, but they did offer a much needed trickle of an income stream which often was not turned down, both for financial reasons and indeed for humanitarian ones, since hotel management and staff knew that they could be themselves soon in a similar marginalised position, whilst corporate owners felt obliged not to turn their backs on their fellow Japanese countryman, and so instead turn a blind-eye.

Of course parallels are rarely 100% truisms, and general western society and the aligned corporate mentality is far more fragmented than the Japanese case, so a direct correlate and expectation cannot be drawn or expected.

However, Japan's long and drawn out technical recession markedly changed a previously heavily engrained attitude and behaviour, by which low-cost camping across city, suburban and usual rural areas became a necessary outcome. That in turn generated a true need for innate functionality from what had been stylised almost falsely functional products, and indeed it seems created new business opportunities in serving these new low-cost consumer groups, very much akin to the 'street-food' trend seen by van vendors in the USA.

So, we see that Japan's much changed conditions, now partly reflected in the UK, altered the basic dynamic of society and its leisure-time activities.

Back to Britain -

As part of the economic re-orientation drive to make the UK less reliant on services (esp financial) and more so materially productive sectors, television and general media have over the last few years spawned a subtle 'nationalistic' agenda. The visible 'book-ends' of this push have been the more serious 'Made in Britain' short series and book presented by Evan Davis and covering 'high-value' industries, contrasting by the more humourous 'Ade in Britain' presented by 'Ade' Edmondson spanning the local foods and traditions of various counties.

Such programmes then help to notionally 'nudge' the mindset of the populace, but far more meaningful and intelligent efforts must be undertaken by a more meaningfully merged mindset of British industry, British financing and International financing.

Yet as the FT has recently explained, whilst the financial institutions and intermediaries of cash-rich foreign countries appear happy to invest sums toward primarily large infrastructure projects with long run, low yield but steady 'utility' type payback schedules, Britain's own financing houses face the far more difficult task of understanding the current dynamic an the more nuanced challenges and opportunities therein.

The Challenge Ahead -

Thus all industrial sectors should perhaps better describe the contextual situation which they face. And the motor-caravan sector should do likewise. This especially the case given the 'boom and bust' experiences endured. These swings have many companies – especially those family owned - understandably and rightly cautious of expansion indebtedness. So although there is a natural onus on all to appreciate the market and commercial terrain, the greater responsibility may lie with those firms that have taken on private equity interests in their private shareholder structure.

Here then for family-firm and PE backed companies, learning from the aforementioned 'Japanese Experience' would prove useful. Whilst the economists spout about macro-economic case studies and fiscal policy-setting learning, it is left to industry's active participants to dissect the reality.

To Follow -

The next instalment Part 2 provides a basic overview of the motor-camping sector's primary manufacturing players.

These ranging from old established family run firms happy to continue in their own carved niche generation on generation, to conglomerate holding companies that recognise the need for the scale-up / cost-down imperative so as to grow margins and feed investment into the sector, and lastly but far from least, the entrepreneurial 'agitators' who wish to progress product and professionalism standards so as to create a new heyday for motor-camping.

Whilst Part 3 looks to how the sector could act as an eco-tech bridge between the fringe habitation of camping and the everyday world of conventional house-dwelling; an issue very much back at the top of the governmental agenda given the protected funds now made available to kick-start housing.

It shows how the UK's motor-camping sector must be re-invigorated, so as to embrace more leading edge technology where available, recognising how 'new-tech' transformed the sector in other countries and made globally renowned brands in doing so. All to demonstrate that the necessarily energy-efficient world of motor-camping can both grow its own gravitas and standing amongst the public, and in doing so grow the health of what should be a critical corner of UK industry, which can have a far broader, transformative affect across the nation.