My Apologies, our web server was down over the weekend and the post was lost.
The effects of the decision to leave the EU last June continue, particularly on the devaluation of Sterling and the increase in the general feeling of uncertainty as the actual leave date looms. These effects coupled with the continued inflationary pressures being experienced in China means that the decision to invest in projects and develop new lines is becoming increasingly difficult. Not only is the unit cost of models rising at an alarming rate but the cost of the tooling is also escalating. Tooling prices are now more than double what they were 7 years ago.
As a company we appreciate that this is an increasingly expensive hobby and that the current economic uncertainty threatens discretionary model purchasing. The crunch that we find ourselves in with alarmingly rising costs, dwindling volumes due to higher retail prices being required means we have to be realistic about what we can and cannot develop.
It is my responsibility as MD of Dapol to ensure the company’s sustainability and the long term future of the business. Not only do I have a responsibility to our fantastic customer base but I also have a workforce which depends on Dapol’s success.
With this predicament at the forefront, the company has to make difficult decisions about our funding and prioritising of projects, especially those that made financial sense when first announced but currently do not. Unfortunately, some previously announced and mooted projects will have to be put on abeyance until the economic conditions become more favourable. This is particularly, but not exclusively the case in N gauge were the small size of the market, the relatively high cost of manufacture and natural cap on retail prices means that returns are least favourable. Projects such as the Class 50, Class 59, prototype HST, Battle of Britain and others are being delayed as result of this. Over the next two weeks we will update our development pages on the website to reflect these decisions, so please look there to find out about any of our projects that are of interest to you.
Coupled with this statement is also an apology from me. Dapol as company has undoubtedly over announced products in the past which has led to this situation. The tendency to be overly optimistic about development times and unrealistic about what can be achieved has been prevalent. It is our intention that any new models announced from now on will have been researched and developed to an extent that the model will be in store within 14 months of being made public.
It is also our intention to make more products at our own factory in the UK. This is a slow process with huge learning challenges, however we all at Dapol are committed to this and are proud of what we make in our small factory in Chirk.
I thank you all for your patience and understanding