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Post by nebrzephyr on Sept 7, 2019 6:26:17 GMT -8
There's another thread here that has a video of ROCO designing and manufacturing trains in Europe. I have no idea of all the "specifics", but it's obvious that model trains can be made other than in China. The question becomes how "expensive" is it to manufacture in Europe versus China. It's apparent the skill set exists in Europe.
Bob
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Post by valenciajim on Sept 7, 2019 9:29:37 GMT -8
When I drafted my previous post, I thought about the manufacture of model trains in Europe that I believe Marklin controls. I had not considered Roco, Flieschmann, etc. I suspect that trains manufactured in Europe are substantially more expensive than China or else some US importers would have already shifted production there. According to their website, Roko apparently opened a factory in Vietnam in 2016. They state: "In this plant mainly goods wagons, as well as some locomotives from the start program are produced. This Roco factory is also gradually being expanded with the latest standards." This probably means that production costs in Europe are high enough to move production to Asia.
Another thought is Malaysia which is where Hot Wheels toys are made. I suspect that neither Malaysia nor Vietnam have robust infrastructure to accommodate manufacturing and logistics, which potentially means uncontrollable and unavoidable production delays. Those type of delays in China have adversely impacted several importers, so I suspect there is little appetite for a production venue without suitable infrastructure.
I also wonder how easy it is to take the tooling out of China. I am pretty sure the Chinese government is not going to roll over and let the manufacturing move elsewhere. The speakers at the conference I attended made it clear that it is extremely expensive and time consuming to move business out of China. If it truly takes a decade to get out of China, by then, manufacturing technology may have advanced to the point where it is feasible to produce in the USA. We'll have to wait and see.
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Post by jonklein611 on Sept 7, 2019 10:02:03 GMT -8
When I drafted my previous post, I thought about the manufacture of model trains in Europe that I believe Marklin controls. I had not considered Roco, Flieschmann, etc. I suspect that trains manufactured in Europe are substantially more expensive than China or else some US importers would have already shifted production there. According to their website, Roko apparently opened a factory in Vietnam in 2016. They state: "In this plant mainly goods wagons, as well as some locomotives from the start program are produced. This Roco factory is also gradually being expanded with the latest standards." This probably means that production costs in Europe are high enough to move production to Asia. Another thought is Malaysia which is where Hot Wheels toys are made. I suspect that neither Malaysia nor Vietnam have robust infrastructure to accommodate manufacturing and logistics, which potentially means uncontrollable and unavoidable production delays. Those type of delays in China have adversely impacted several importers, so I suspect there is little appetite for a production venue without suitable infrastructure. I also wonder how easy it is to take the tooling out of China. I am pretty sure the Chinese government is not going to roll over and let the manufacturing move elsewhere. The speakers at the conference I attended made it clear that it is extremely expensive and time consuming to move business out of China. If it truly takes a decade to get out of China, by then, manufacturing technology may have advanced to the point where it is feasible to produce in the USA. We'll have to wait and see.
Yup, a company I worked for planned for all equipment going into to China that it would never be allowed back out of the country. We had plans to destroy items in country so they were of no use.
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Post by thunderhawk on Sept 7, 2019 10:35:39 GMT -8
Chinese average wages in the major cities are now comparable to or above Eastern Europe. According to this site average manufacturing wages are actually lower in Mexico than China. www.statista.com/statistics/744071/manufacturing-labor-costs-per-hour-china-vietnam-mexico/The numbers for Vietnam show why Roco went there. Wouldn't be surprised if Roco is doing the tooling in Europe then farming assembly to Vietnam. Also, note that Roco is a bit more automated than the Chinese manufacturers when it comes to painting, including machined paint masks as used on an automated line versus the copper masks used for hand spraying. They also have multi station pad printing machines that can do all the decoration on a car in one pass. I believe Micro Trains has a similar paint line but does not use the die style masks. |
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Post by Paul Cutler III on Sept 9, 2019 7:33:42 GMT -8
BTW, folks, I talked with Bill at Rapido this Saturday (the 7th) at the NHRHTA Reunion & Train Show. He confirmed that importing goods through Canada makes no difference when it comes to tariffs. If the country of origin is China, it will get a tariff no matter how it comes into the USA.
OTOH, Canadians won't be charged.
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Post by valenciajim on Sept 9, 2019 8:21:27 GMT -8
Paul--that is exactly what I said. Thanks for confirming this with the Rapido folks.
Also, wages are not the only cost factor that comes into play. Another large factor is the extent to which the local government subsidizes production either through direct subsidies or through lower tax rates. Back in the day, China used both aggressively to attract business there. Other factors include skill of local workforce, logistical support and the cost of transporting the good to the US.
I wonder whether Rapido is at a relative disadvantage to US importers. The reason I say this is because the tariff is based on the price paid (expressed in US dollars) by first party in the US who is buying the merchandise. When a US importer, like Atlas for example, pays a Chinese manufacturer $100 for a locomotive, they pay a tariff of $10. They then sell the locomotive for $150 and have a $40 profit. If Rapido imports a locomotive costing $100 to Canada, there is no tariff. However, when the locomotive is sold to a US customer for $150, is the tariff based on the full $150 or just the Chinese portion of the cost (i.e., $100)? If the cost is based on the price paid by the US purchaser, Rapido would be at a disadvantage and would have to create a US entity to acquire the inventory at a lower price.
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Post by nebrzephyr on Sept 9, 2019 12:40:15 GMT -8
BTW, folks, I talked with Bill at Rapido this Saturday (the 7th) at the NHRHTA Reunion & Train Show. He confirmed that importing goods through Canada makes no difference when it comes to tariffs. If the country of origin is China, it will get a tariff no matter how it comes into the USA. OTOH, Canadians won't be charged. Wonder how the US government is going to track goods imported via Canada? Does that mean Rapido has to inform the US government every time it sells an item to US customer. I don't see how that is going to work. In the US the importer (Atlas, Athearn, etc) pays the tax, not the end user (modeler). Now as we've seen the importers are typically going to pass on the cost, but it is the importer that is first in line for paying the tax. I'm confused!  Bob
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Post by Judge Doom on Sept 9, 2019 13:01:24 GMT -8
I believe the CN22 customs form has a field for country of origin on it. The Rapido boxes also have prominent Made in China lettering on the outside as well. Lying to customs probably isn't the best idea for a company that deals with lots of cross-border shipments.
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Post by thunderhawk on Sept 9, 2019 13:02:25 GMT -8
Product goes through customs when crossing the border. I don't have any Rapido but I'll bet all kinds of money that their boxes have this on it.  |
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Post by valenciajim on Sept 9, 2019 13:08:28 GMT -8
Bob-that is one of the questions I have as well. I believe that whenever merchandise is shipped into the US, Special Permit for Immediate Delivery (CBP Form 3461) has to be prepared and filed with the customs authorities before the merchandise can be accepted at the port of entry. One of the questions on that form asks for the merchandise's country of origin. I suspect that Rapido will be required to pay any tariffs or other customs fees when the goods are shipped from Canada. Based on what I saw on the websites for several logistics carriers, this appears to be done on-line and all forms are e-filed with the US Government and fees are paid electronically by the shipper.
As a side note, I know that the state of California has access to these completed customs forms and actively uses them to collect use tax.
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