Link in German - http://www.salzburg.com/...etzt-auf-vietnam-230539/

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After sales crisis: Roco model railroad sets on Vietnam

The company from Bergheim had not made it easy in recent years. The production in Vietnam is now to reduce the costs for Roco.

In the model railway world in Bergheim-Lengfelden a black locomotive turns its rounds until it stops in front of a red traffic light. Just like the miniature locomotive, the turnover for the model railways had finally stopped. In the past decade, the sales volume in the industry has declined by a third, says Gerhard Joiser, Managing Director of Modelleisenbahn GmbH. The holding company sells the brands Roco and Fleischmann. The slump had also not left its mark on them: while the company still sold products by 51 million in 2013, it was only 47.5 million in 2015. "We have raised the prices too much, which was a clear mistake, but we were able to compete already in 2015."

Last year, however, the crisis had bottomed out. Now sales are rising again: in 2016 the Bergheim locomotives, trailers and rails sold by 49 million euros. This year, Joiser wants to keep sales.

On the one hand, the Managing Director wants to appeal to men over the age of 40 years. "They still have childhood memories of the model railway to which they can link." In addition, he wants to strengthen cooperation with suppliers, competitors and specialist dealers. Because they would all be sitting in a boat. "We bundle our forces."

80 employees are building 200,000 wagons
A further step is to reduce the costs of production. On the one hand, there should be more than 800 innovations per year in the future. At the same time, the produced pieces per novelty will increase by 20 per cent.

On the other hand, the Group moved some of the production to Vietnam. Last year, 80 employees assembled 200,000 wagons, representing five percent of total production. However, the know-how, the technology and the construction should remain in Europe: "In Vietnam simpler models are produced." The production sites in Romania and Slovakia remain intact. In total, Roco and Fleischmann have 750 employees, 100 of which work in Bergheim.

However, the new production hall had led to a negative result in 2016 despite the increase in sales. Joiser did not want to say how exact the exit was. However, he was in the seven-digit range. This year, however, costs and sales are expected to balance, and the company wants to have a black figure in 2018. With the planned 50 million Euro turnover, the Bergheimer would again be at the level of 2014. Over the next four years, Joiser also wants to increase sales by a fifth. "Our house bank is behind us, we have learned to fight."

Thanks, Steven, this is really intriguing.

Has Roco got into trouble because it delivers better quality than Märklin?
Are customers still willing to pay for quality (control)?

This doesn't come as a surprise to me. I've been wondering for some time how long they could thrive in a world of discounted prices and compete against the likes of Piko.

What will Roco do next? Cut corners as Märklin has been doing for 15-20 years? I doubt that the Vietnam production can save RoFl.

Best regards,

Mark

My own experience with both Roco and Marklin is that Roco leads Marklin in quality and value; at least when I compare Roco analogue to Marklin digital.

I will bring at the reunion on Saturday two Roco locos, one steam and one electric, each costing about $250.00 CAD plus taxes and you will see Roco's quality in analogue mode.

This does not mean that Marklin is terrible, but it does mean that Marklin should improve its quality control.

It also does not mean that Roco is perfect, it is not.

Bottom line: Roco analogue and Marklin digital works for me.

I am happier by owning these locos (and related gear) than I would be if I kept my money in the bank or spent it on trips abroad.

Hi David,

At some (unknown) point in the late 1990s, after Märklin had acquired Trix, the company decided to move part of its production to China. By doing that, Märklin effectively lost control over the manufacturing process. The German company relied on its partners to manufacture part of its products, which were shipped to Göppingen in large containers and distributed to dealers without any additional quality control in Göppingen. Märklin kept this secret, thereby letting customers believe that its products were still German-made. Nobody knows how many Märklin products were made in China, but some people think it was up to 40% of total output between 2005 and 2010. The zinc pest associated with some Märklin products made during those years is well-known.

I'm a customer at a German MRR shop near Göppingen. In the spring of 2013, I drove there to pick up a Big Boy and had an interesting conversation with a woman who now works there but used to work for the quality control department at Märklin's factory in Göppingen. She didn't criticise her former employer, but she told me that she had worked there until 2005 and that they had really checked every locomotive that was made there. Every tenth locomotive was even disassembled and thoroughly checked. What happened in 2005? The people who used to work in quality control were sacked along with some other Märklin workers. Where's the evidence? In 2009, Mr Pluta said that Märklin had reinstated quality control, which means that there hadn't been any in the few years leading up to the insolvency. Who checks quality now? In Märklin videos I often see assembly workers who appear to do this themselves. If you checked the quality of your own work, would you find all of your mistakes? Quality control is certainly not as good as it should be, especially in the Hungarian factory; it's called quality management (Qualitätssicherung) now. I've had about ten warranty cases in the last 5 years, so Märklin has definitely cut too many corners.

During the insolvency, Märklin put cheap decoders as well as cheap motors into its locomotives to save money and remain profitable. The cheap motors aren't bad, and the decoders have been improved in the meantime. The China production has continued, though Märklin made some vague announcements at the time that let customers believe that it would phase out production in Asia. It certainly hasn't. In 2017, the Nohab diesels (39676, 39675) as well as the Swedish Ub (36352) will probably be made in China, for example.

I can live with cheap DC motors, and in recent years I've bought Märklin freight cars as well as locomotives made in China, but I don't want any more warranty cases. It's up to Märklin to deliver good products to customers.

I'm still a Märklin fan and have decided to order some items from the 2017 news brochure, but it seems to me that Märklin has remained profitable because it has cut corners, whereas Roco is losing money because it didn't want to compromise on quality. Like many other famous brands, Märklin can still rely on its name ...

Best regards,
Mark

Thanks for the detailed replies Mark and Tom - it is unfortunate to hear. It would be nice if Marklin published the country of manufacture of each item. I personally enjoy the novelty of buying products made in Germany.

David

Well, this part is just plain wrong. IIRC Marklin took over Trix as of January 1st 1996 (might have been a year earlier), and the Nurnberg show 'loco' that year was the so called 'wedding train' with a Glaskasten and two wagons, all painted white, produced as both Marklin and Trix items. Trix was bankrupt, and if Marklin hadn't bought them they would have disappeared from the scene. Trouble there was that Marklin had a number of models made by Trix (the Glaskasten being one of them) and couldn't afford to have Trix drop out stopping production of these items. The purchase of Trix did not mean Marklin lost control of its production - in actual fact it acquired control of some of its production.

I don't believe it was at that time that Marklin started producing items in China either. I understand that came about 5 or more years later.

I have one Fleischmann steam locomotive S6 with Zimo sound decoder and it works excellent!
It works even better than Märklin/Trix.
I´m pretty sure Roco/Fleischmann find out an way to better economy by survive.
But it´s hard to believe if they placement produce of the locomotive models in Vietnam.

I have a Fleischmann E19 from some years ago and have to say in terms of operation it beats the Maerklin version hands down: smooth and nearly silent. Same goes for some of my Roco as well. Mind you, these items were purchased well before the "consolidation" of both brands under one umbrella, so I can't really speak about the newer items, my collection remains nearly 95% Maerklin.

It's a shame that quality overall has declined over the recent years. A short time ago, Florian Sieber lamented that many Maerklin enthusiasts were purchasing older items on the second-hand market instead of opting for newer, digitally-equipped items. While there are many reasons for this -- with cost being one if not the MAIN reason -- quality of product is certainly up there. I have several analog locos well over 40 years old that run just as well as the day they first left the factory. Sadly, I can't say the same for some of my more recent digital purchases with so-called "maintenance-free" motors and high-tech gizmos.

Hi David

If you order any Marklin product in the United States which has been exported for distribution here, it does have where it is made on it. If a dealer (or yourself personally) order directly from Europe, then it wont have such labelling. Another way you can tell where something is made is look at the inside flap at the stamp, that will tell you where the box is printed (and thus where it was likely manufactured).

I have a fair amount of ROCO items in my collection. For the locomotives, recently I have found that detailing parts applied by the customer routinely do not fit, the recent release of the BR 36 is a good example. Most of the parts do not fit while a earlier version of the locomotive I purchased back in 2011 fit perfectly. Both are the same model just one is era III and one is era IV, only the paint is different. I have seen ladders on tank car crack if you just touch them (that car was made in Vietnam). I feel that the quality control on the items I have purchased was poor at best.

Edited by user 26 January 2017 02:34:40(UTC)  | Reason: Not specified