I don't see Hornby being a big player - at this stage - in the German market. Their only real German brand is Arnold, and I don't really see N gauge as ripe for DCC yet in the way HO and OO are. They have bought a bridgehead in Germany, no more
But they are a big player in Western Europe, with the leading brands in the UK (probably) France, Spain and Italy. They may not be up with Maerklin, and Fleischmann, but they are certainly in the next bracket, and much bigger than companies like Piko or Mehano . And unlike a number of the big Continental players, Hornby are profitable, financially strong, and have a low cost production base b- none of which appliex to Maerklin, Roco or the late unlamented Groupe Riva'
Most of the reasons why I don't believe Lenz , ESU et al would speak to Hornby have been given by other posters:
QUOTE They make very different products. Hornby make budget toy trains. ESU, Lenz make electronics. While Hornby may produce budget DCC systems this is not the area catered for by Lenz or ESU who do quality middle and top end products. They are competing in different areas. Remember Hornby is only big or known in the UK and to a limited extent in it's former colonies.
That , I suspect will be Lenz's (or ESU's) view of Hornby - a bunch of hicks from some wet rocks off the coast of Europe who knock out a few toys and have accidently bought the wreck of a second string Continental operator without any real understanding of how the business works in the real world.
The whole idea of lower prices and competition to build volume sales flies in the face of the whole business strategy of the German market for a decade or more. If Hornby say they are trying to offer affordable DCC to open up the mass market, anyone in the German market will just roll their eyes in incomprehension . Anyway German modellers are very nationalistic. If its German it must be good ,and we buy it. If its not German it must be poor quality, and we won't buy it. This explains the persistance of obsolete 3 rail AC , rejected everywhere else decades ago, and the way manufacturers like Maerklin continue to issue coaches that are not to scale length so they can go round trainset curves - something discredited in the UK 40 years ago
Its a seriously skewed view. Meccano had that view of Triang in the 50s. But some Continentals can be very dismissive (and fairly ignorant) of Britain
QUOTE They will have to go some to crack the european (especially German) markets. The european modeller is so totally different from his/her UK counterpart. Why do you think Marklin (stud contact AC) is so strong in europe ?
I'm sure they will have a tough job, but I remember all the discussion on German and Austrian manufacturers pricing themselves out of business.
Haven't we seen quite a few companies going bancrupt or near bancrupt in the last year?
There seems to be an opening for a canny operator there?
France is fertile ground for this. The French HO market has been hit hard by the loss of a lot of key items which were in the Jouef and Roco ranges. Hornby have already made some friends by offering reintroduced Jouef at prices noticeably lower than before. "La retour de Jouef democratique!" as one loco revue forum poster put it. The French are clearly chafing under the high price regime - "miseramodelisme" or modelling on a budget seems to be a popular cause. French prices are further affected because all German brands have to be supplied via an importer, leading to a 25% mark up on shop prices just across the Rhine
QUOTE I still think companies like Lenz have something to worry about if and when mass market companies like Hornby start offering Locos fitted with decoders equivellent to the Silver or Gold.
At the moment Hornby have stumbled in with "dodgy" budget kit, but this will change, as we see better spec items appearing.
Similarly if some of their separately available decoders can offer this type of quality but at a lower price, then the established companies will have a problem. Add to that "market presence", i.e. Brand names available at virtually every model rail outlet and many toy shops, as opposed to limited dealers and availability.
Moving further up-market for the likes of Lenz will only reduce their market share and make them niche players; well more so than now!
I agree with this. And I don't think any of the established Continental DCC players will be willing to make serious technology available to Hornby for these reasons. Why give Hornby the tools to do the job. I reckon the thinking will be "Don't break ranks and do anything silly, chaps. Just ignore them and they'll be no danger"
For Lenz the UK must look like a tiny unimportant market. Given the low pentration of DCC here,DCC sales volume must be less than 5% of Germany . What do German manufacturers care about the UK market? Look at the way Marklin couldn't be bothered reintroducing British Minitrex? Ever seen Maerklin or Roco or Lenz or ESU at Warley? (Heljan have a big stand and so do Digitrax)
And Lenz do not seem interested in the mass market,. Theior preferred strategy seems to be to wholesale the cheaper end of the market through a RTR manufacturer (Roco or Bachmann) and limit their own brand to the higher end products. Until very recently they've never kept an obsolete decoder in the range as a budget option (unlike TCS)
Lenz just don't have a sales network to sell to a mass market. Never mind whether they could get the product made in volume- they're not geared to market those sort of volumes
QUOTE They will but while Hornby are catching up the market leaders Lenz, ESU, Zimo and Viessmann will be making new advances and rasing the hurdles higher.
Think of Lenz , ESU Zimo and Viessmann as makers of high end hifi gear - espcially Zimo. This is trhe world of the £1000 cd player or £5000 plasma screens. Hornby want to be Richer Sounds (for non UK members a aggressive chain of small shops selling budget hifi and home cinema separates. Infinitely better than a supermarket DVD player, and now only £79.99!!!!)
