An Update on the State of the Model Train Industry

[warb]

 

[NIRCLASS80]

Some of the best RTR manufacturers in the world.  Modelled North American for thirty years and I can honestly say the most fault free, great running products I ever had.   

[spudfan]

Good post. If they do not order now there will be no Christmas supplies. A lot of money will have been outlaid for products that will not arrive before tariff day. So do you cut and run and give up your production slot? If "tariff day" does not come to pass there will be a scramble to get a production slot as others will have played the wait and see game too.

It will effect toys in general. If supplies are not brought in there will be a lot of angry parents at Christmas. Many will have believed in the "produce everything in America" mantra without seeing how it would play out. Sounds great in theory but something that would take years to implement. I can see a lot of photos of The Grnich sitting behind a big desk hitting the internet come Christmas.....

[commerlad]

3 hours ago, spudfan said:

Good post. If they do not order now there will be no Christmas supplies. A lot of money will have been outlaid for products that will not arrive before tariff day. So do you cut and run and give up your production slot? If "tariff day" does not come to pass there will be a scramble to get a production slot as others will have played the wait and see game too.

It will effect toys in general. If supplies are not brought in there will be a lot of angry parents at Christmas. Many will have believed in the "produce everything in America" mantra without seeing how it would play out. Sounds great in theory but something that would take years to implement. I can see a lot of photos of The Grnich sitting behind a big desk hitting the internet come Christmas.....

 

Or cartoons in the papers of "The Grinch sitting behind a big desk IN THE OVAL OFFICE come Christmas....."

[James Regan]

This is all well and good but we need to move production out of China. They are literally using our money to build their army. That needs to stop. Time to move to a location which is not a strategic threat.

[Mayner]

 

Recent delivery advice from Accucraft that they are honouring the pre-sale price of $2500 for the 1:20.3 scale live steam Australian "Puffing Billy' 2-6-2T  to US Customers regardless of recent tariffs.

 

April 23rd, 2025 Accucraft Victorian Railway NA Class, Baldwin 2-6-2T We are pleased to inform you that the Puffing Billy is finally ready to be shipped!   Thank you for your continued interest in Accucraft products and for your patience throughout the process. The model is absolutely gorgeous, with exceptional attention to detail and finishing. Our team have done a wonderful job producing one of the finest models we've ever offered.   We are also happy to inform you that, despite the recent tariffs, we are honoring the pre-sale price until the May 2nd. Accuracraft is a US owned business with its own factories in China     More Information

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Interestingly while I was staying with family in North Dakota during January the Canadian Pacific was loading a 100 Car Train with grain for China at one of the local elevators. A farmer told me that most of his grain goes to the Far East and the US Government will buy his surplus production if he cannot find a buyer on the open market, a Trade War could work out more damaging to the US than China. 

Edited 21 hours ago by Mayner

[David Holman]

Put bluntly, this is what happens when you let a fox loose in the hen house. Regardless of where you stand politically/economically, no problem is ever black or white and all actions have consequences.

 It might seem easy to say "just do this to fix the problem", but no good ever comes out of meddling with world order because you think you hold all the advantages.

[DJ Dangerous]

2 hours ago, James Regan said:

This is all well and good but we need to move production out of China. They are literally using our money to build their army. That needs to stop. Time to move to a location which is not a strategic threat.

To where, though?

Keeping it largely to scale models and similar products.

[murphaph]

7 minutes ago, DJ Dangerous said:

To where, though?

Keeping it largely to scale models and similar products.

Exactly. These jobs are not coming to advanced economies because even at 145% tariffs a loco would still be cheaper if built in China rather than in the US or Europe. This whole thing could backfire massively the more I think about it. What would the CCP do in the event that the western world effectively stopped having products built in China? They have an army of idle workers, getting more and more agitated. They could let them overthrow the government (unlikely) or they could give them something to make. The CCP would have little to lose if it started using all that labour to produce weapons. Throwing a huge spanner in the works is such a huge mistake with so many potential unintended consequences. Global trade has some downsides for sure, but it has a massive upside in that we all grow more dependent on each other and are less likely to start wars with each other. 

[DJ Dangerous]

15 minutes ago, murphaph said:

Exactly. These jobs are not coming to advanced economies because even at 145% tariffs a loco would still be cheaper if built in China rather than in the US or Europe. This whole thing could backfire massively the more I think about it. What would the CCP do in the event that the western world effectively stopped having products built in China? They have an army of idle workers, getting more and more agitated. They could let them overthrow the government (unlikely) or they could give them something to make. The CCP would have little to lose if it started using all that labour to produce weapons. Throwing a huge spanner in the works is such a huge mistake with so many potential unintended consequences. Global trade has some downsides for sure, but it has a massive upside in that we all grow more dependent on each other and are less likely to start wars with each other. 

@Warbonnet covered the reasoning a couple of years back HERE:
 

On 8/3/2021 at 9:14 AM, Warbonnet said:

Hi Shane,

1. Labour costs

2. Expertise in producing highly detailed models 

3. Better fidelity 

If it was a crazy way to do it, nobody would do it. Nobody does runs of 500 for a mass produced China model mind you.

The 12-18 month lead time is not just in the China end of manufacture, it's also CAD design, artwork, survey etc. which is performed locally. Nothing China can do about that. SLA printing will of course get better but it will never replicated the highly detailed models we get from China on a mass produced scale simply due to the large amount of assembly (labour) that goes into making these models. It would still be assembled in China, or a similar country labour cost wise.

As an exercise, put the Murphys 121 and a OO works locomotive next to each other. Which has more detail parts? Which has more features? Which model is the better runner? Which is the better model? Which one costs more? 

If China wasnt the answer nobody would be using China for manufacture. 

Hope this helps!

Fran

And, as you say, it’s difficult to estimate the consequences of an overly simplistic knee-jerk reaction.

Also, how many of us would be buying models if they were three or four times the price and the quality was crap?

To enjoy the current price vs. quality balance that we do, we need to exploit economic and societal differences.

[murphaph]

I'm about at the limit of what I'm prepared to pay for models. I could not justify €300 a loco type prices. That's the message from these companies and it takes a brave CEO in the US these days to stand up to the current regime so kudos to the leading figures in our hobby having the bravery to do that. The industry depends on lower cost labour and a certain skillset. If China is "taken out", it would take them out of manufacturing so many other more important things that finding replacement manufacturing capacity for models & toys would be right down the bottom of the world's list of priorities. Our RTR hobby would basically be gone or be the preserve of the very wealthy and they would have to settle for a vastly reduced assortment. It's simply not possible to exclude a billion+ people from the world economy and expect things to somehow continue as before. China is not North Korea.

[BosKonay]

5 hours ago, James Regan said:

This is all well and good but we need to move production out of China. They are literally using our money to build their army. That needs to stop. Time to move to a location which is not a strategic threat.

Without getting political, the USA actually uses Chinese money to build -their- army. 

[murphaph]

4 minutes ago, BosKonay said:

Without getting political, the USA actually uses Chinese money to build -their- army. 

Yup: https://en.wikipedia.org/wiki/Exorbitant_privilege

[James Regan]

29 minutes ago, BosKonay said:

Without getting political, the USA actually uses Chinese money to build -their- army. 

Getting back to where to build, Thailand and Malaysia must be contenders. I’ll quote Fran above - It would still be assembled in China, or a similar country labour cost wise. Time to make contingency plans boys. And yes borrowing Chinese money to pay for anything isn't a good long term strategy - see West Africa and Laos for examples. In Laos they even got a 1:1 scale train set. 

[Warbonnet]

11 minutes ago, James Regan said:

Getting back to where to build, Thailand and Malaysia must be contenders. I’ll quote Fran above - It would still be assembled in China, or a similar country labour cost wise. Time to make contingency plans boys. And yes borrowing Chinese money to pay for anything isn't a good long term strategy - see West Africa and Laos for examples. In Laos they even got a 1:1 scale train set. 

Thankfully there is sensible people running EU countries and economies, so we can enjoy Chinese expertise for a while yet, and now with additional capacity as American companies are forced to put the brakes on their plans. I really feel for those companies, as they're small companies and this is a serious threat to their liability. They'll be long dead before any alternative arrangements can be put in place.

Having been to China, and having welcomed our factory partners here on a number of occasions now, all I can report is that they're brilliant people to work with. Their army was 3 million strong long before they started manufacturing model trains too. 

[Mayner]

57 minutes ago, murphaph said:

I'm about at the limit of what I'm prepared to pay for models. I could not justify €300 a loco type prices. That's the message from these companies and it takes a brave CEO in the US these days to stand up to the current regime so kudos to the leading figures in our hobby having the bravery to do that. The industry depends on lower cost labour and a certain skillset. If China is "taken out", it would take them out of manufacturing so many other more important things that finding replacement manufacturing capacity for models & toys would be right down the bottom of the world's list of priorities. Our RTR hobby would basically be gone or be the preserve of the very wealthy and they would have to settle for a vastly reduced assortment. It's simply not possible to exclude a billion+ people from the world economy and expect things to somehow continue as before. China is not North Korea.

China has been stressing that the US market makes up about 15% of its total export market and so could potentially compensate by increasing exports to the rest of the World, China has no hang ups about subsidising exports to other countries. Interestingly imports from China make up about 16% of US imports. Imports are prodimently Hi Tech most likely assembled on automated production lines so unlikely to be an army of redundant workers to divert to 'defence'

China has been very effective of expanding its influence using soft power to finance and build infrastructure in the Global South and Pacific and has caught The United States, Australia and New Zealand off guard by successfully negoting agreements with Pacific Island Nations in what was presumed to be their 'sphere of influence" China and Japan has an advantage over Europeans due to the similarity in culture and way of doing business with Pacific Island nations. The Chinese pissed off Australia recently by conducting live firing naval exercise in the Tasman Ocean of the East Coast but more a posturing exercise than anything having already signed a 'Strategic Partnership Agreement" with the Solomon Islands which includes security and law enforcement, together with China owning some of Australia's ports.

The real cost of on-shoring clothing, engineering and toy manufacturing to Western countries would be a singificant increase in the cost of living and decline in living standards in the West, East South East, Asia and India and most likely a dramatic increase in poverty and malnutrition in the Global South. Unfortunately the United States is slipping towards totalitariansim lead by a bunch of grifters that would make teach the average African Kleptocrat a lesson or two about lining their own pockets.

[Georgeconna]

1 hour ago, BosKonay said:

Without getting political, the USA actually uses Chinese money to build -their- army. 

Link?

[murphaph]

China (and everyone else) buys US government debt in the form of Treasury Bills. The US has historically had to pay very low interest rates on this money so it can use it to fund whatever it wants, including the US DoD budget. The US is in a unique position in the world in this regard. 

[James Regan]

2 hours ago, Warbonnet said:

Their army was 3 million strong long before they started manufacturing model trains too. 

Indeed… meantime your Chinese friends are building warships and nuclear missiles…whatever for? We’ll see what ‘sensible’ leaders in Europe do then? 
https://www.cfr.org/blog/six-takeaways-pentagons-report-chinas-military

Change is coming…

[Georgeconna]

1 hour ago, murphaph said:

China (and everyone else) buys US government debt in the form of Treasury Bills. The US has historically had to pay very low interest rates on this money so it can use it to fund whatever it wants, including the US DoD budget. The US is in a unique position in the world in this regard. 

Interesting must take a look into it.  handy to have the ol 36 trillion debt hanging about then. No wonder they are trying to tackle that.

2 minutes ago, James Regan said:

Indeed… meantime your Chinese friends are building warships and nuclear missiles…whatever for? We’ll see what ‘sensible’ leaders in Europe do then? 
https://www.cfr.org/blog/six-takeaways-pentagons-report-chinas-military

Change is coming…

See those invasion barges they built? deadly looking yoke. Takes the Mulberry harbours into the space age!

[MOGUL]

7 minutes ago, James Regan said:

Indeed… meantime your Chinese friends are building warships and nuclear missiles…whatever for? We’ll see what ‘sensible’ leaders in Europe do then? 
https://www.cfr.org/blog/six-takeaways-pentagons-report-chinas-military

Change is coming…

Nuclear deterrence? The cornerstone of US policy for the past 70odd year since they became the first and only nation to actually use a nuclear weapon in anger.. or is it only ok when certain people have a nuclear arsenal. I know Ukraine probably wish they had kept theirs instead of trading them in for a US security guarantee( the Budapest memorandum ) that wasn’t worth the paper it was printed on.. 

Anyway, as expected this thread has gone south fairly quickly.. 

[GSR 800]

22 minutes ago, James Regan said:

Indeed… meantime your Chinese friends are building warships and nuclear missiles…whatever for? We’ll see what ‘sensible’ leaders in Europe do then? 
https://www.cfr.org/blog/six-takeaways-pentagons-report-chinas-military

Change is coming…

Taiwan, primarily, along with power projection in the Asia region, protecting maritime trade (Mahan). Nuclear missiles for the same reason every superpower worth its salt builds a nuclear arsenal. 

The only constant is change.

Any dealing with China must come with the understanding they will work in their own interest, as all nations do. If the US tries cutting them out of global trade, the consequences will be incredibly destructive. Give them nothing to lose, see what happens. Likewise if they rolled over and let China do whatever they like it would be very negative. China heavily subsidised its industries, effectively bought and shipped the entire German solar panel industry over to China. Chinese domestic demand is suppressed through currency manipulation of the RMB to make exports more competitive.

Something akin to the Plaza Accords of the 1980s could go some way to rebalancing trade, a revaluation of the RMB would increase domestic Chinese consumption considerably. This would not solve all issues regarding trade or geopolitical issues regarding the US, EU and China but it would be a step. 

19 minutes ago, Georgeconna said:

Interesting must take a look into it.  handy to have the ol 36 trillion debt hanging about then. No wonder they are trying to tackle that.

The problem the US has is the catch-22 of a high debt and the way out of it being to raise interest rates. Doing so causes the repayments on the interest on the debt to, obviously, increase, but to not increasing interest rates means more money printing, more debt, and on it goes

 

Edited 14 hours ago by GSR 800

[James Regan]

I dont want to go too far off track on the political stuff. Not everyone makes trains in China, look at Maerklin and Roco who both make theirs in Europe mostly. Its not China or bust.  Roco make trains in Austria and Slovakia and Marklin in Germany and Hungary. Roco apparently make some in Vietnam. There are many options to funding the Chinese military. 

[James Regan]

Just so we aren't all depressed, Working on the display of various things. Unfortunately, when I upload it appears to be low resolution. 

[spudfan]

Where did you put the wife's meat that was in the freezer?

[BosKonay]

3 hours ago, James Regan said:

I dont want to go too far off track on the political stuff. Not everyone makes trains in China, look at Maerklin and Roco who both make theirs in Europe mostly. Its not China or bust.  Roco make trains in Austria and Slovakia and Marklin in Germany and Hungary. Roco apparently make some in Vietnam. There are many options to funding the Chinese military. 

Marklin went bust in the mid noughties with massive debts and even now struggle to turn a profit on 130m or so of sales (probably more than the entire UK market for the entire hobby) 

The challenge for our industry is that yes you could build a factory in another location at a cost of many many millions and it would not be ready to start manufacture for at least two years and that’s being optimistic and then you are going to need to hire hundreds of staff who will all have to be trained since all of the skills required are based in China   

so you end up with a massive capital investment a massive operating cost that you have to carry for many many years while getting a factory up to speed so that you can approach half as good models at probably four times the price in four years time

The simple fact of the matter is that unless change happens, all manufacturers bringing models into the USA are at risk and the damage was long long done in moving ALL manufacture east, not just our hobby. 

Unless Government is willing to massively subsidize investment and operating costs to bring any such work ‘home’ it is simply financially impossible. Chinese factories have spent nearly 50 years building a just in time infrastructure with factories, subcontractors and very high level expertise all in place with a super competitive work force who are actually happy to work hard and are amazingly good at what they do. 

Would you want to sit in a factory assembling models to ‘factory’ standards for about $2 an hour? 

[DJ Dangerous]

41 minutes ago, BosKonay said:

Marklin went bust in the mid noughties with massive debts and even now struggle to turn a profit on 130m or so of sales (probably more than the entire UK market for the entire hobby) 

The challenge for our industry is that yes you could build a factory in another location at a cost of many many millions and it would not be ready to start manufacture for at least two years and that’s being optimistic and then you are going to need to hire hundreds of staff who will all have to be trained since all of the skills required are based in China   

so you end up with a massive capital investment a massive operating cost that you have to carry for many many years while getting a factory up to speed so that you can approach half as good models at probably four times the price in four years time

The simple fact of the matter is that unless change happens, all manufacturers bringing models into the USA are at risk and the damage was long long done in moving ALL manufacture east, not just our hobby. 

Unless Government is willing to massively subsidize investment and operating costs to bring any such work ‘home’ it is simply financially impossible. Chinese factories have spent nearly 50 years building a just in time infrastructure with factories, subcontractors and very high level expertise all in place with a super competitive work force who are actually happy to work hard and are amazingly good at what they do. 

Would you want to sit in a factory assembling models to ‘factory’ standards for about $2 an hour? 

On top of that, I’d assume that the new factory would need to maximise the utility of those happy Dubliners earning €2 per hour…

You’d need to be swappping out toolings and machinery as soon as you finish one contract, having another contract ready to start on.

It would need to be heavily subsidised for a long time, in order to reach that maximum utility point.

[BosKonay]

24 minutes ago, DJ Dangerous said:

On top of that, I’d assume that the new factory would need to maximise the utility of those happy Dubliners earning €2 per hour…

You’d need to be swappping out toolings and machinery as soon as you finish one contract, having another contract ready to start on.

It would need to be heavily subsidised for a long time, in order to reach that maximum utility point.

In reality you’d need massive subsidy and / or the market to accept a €1,000 price point for a locomotive. 

[DJ Dangerous]

11 minutes ago, BosKonay said:

In reality you’d need massive subsidy and / or the market to accept a €1,000 price point for a locomotive. 

I’ll stick to my €200-ish per loco, thanks very much!

[Georgeconna]

4 hours ago, James Regan said:

Just so we aren't all depressed, Working on the display of various things. Unfortunately, when I upload it appears to be low resolution. 

Nice cabinets where did you get those?

[DJ Dangerous]

4 minutes ago, Georgeconna said:

Nice cabinets where did you get those?

Here, maybe:

On 27/10/2024 at 1:06 PM, James Regan said:

It’s from a company in Germany and they will ship to the US and elsewhere.

https://www.train-safe.de/en/Our-Products/Acrylic-display-case/Vision/

 

Edited 8 hours ago by DJ Dangerous

[spudfan]

You could end up shifting the factory but find in two years time that that country was to be hit with tariffs. 

[James Regan]

 

2 hours ago, Georgeconna said:

Nice cabinets where did you get those?

Started with LFT HUIMEI2Y Glass Display Cabinet on Amazon. I added 12 volt LED track lighting and replaced the shelves with heavier grade 8mm glass from a local glass shop. 

[Mayner]

One of the supreme ironies with the current situation is that American experts (Demming, Durand et-al) pioneered the concepts that allowed American businesses to offshore their manufacturing the Far East and China.

Ironically these experts were largely ignored in the US but taken seriously by the Japanese during the post World War re-build, at the time it was probably thought that the World would be safer if the Japanese (and other defeated axis powers focused their energies) on manufacturing motorbikes cars and radios. 

I was once sat in the canteen of a major Ford dealership in Dublin during the 80s and one of the managers questioned who really won the War pointing to the nearly Audi-Volkswagen and Nissan plants.

Ironically these methods were adapted by the US Navy in the 1980s rebranded as Total Quality Management or TQM. JIT was basically using subcontractors to manufacture the components for delivery to the assembly plant just in time, classically in Japanese mini vans.

Atlas is an interesting one shifting (loco) production to Italy (Rivarrosi) 70-80s, Austria (Roco) 70-80s  Kato (Japan) during the 80s and China mid 90s.  A similar lower priced Model-Power range was produced in Yugoslavia but does not appear to have survived the break up and civil war.

The N scale Con-Cor PA1 & Atlas N Scale RS3 both manufactured by Kato were  transformative in terms of detail finish and running (center motor twin bogie drive) the running of the Kato locos best described as impeccable, Atlas 90s Chinese production was even more refined in finish with extremely smooth low speed running but sounded like a tractor, their early 2000s era Chinese production was utterly transformative.

Interestingly Trump is already being portrayed as the Grinch in the US Media https://www.usatoday.com/story/news/politics/2025/04/30/trump-china-tariffs-toys/83372961007/  , my wife and her mum (staunch Democrats) from the Mid-West religiously watch the Boris Karloff version of the Grinch on Christmas Day

Edited 4 hours ago by Mayner

[leslie10646]

40 minutes ago, James Regan said:

 

Started with LFT HUIMEI2Y Glass Display Cabinet on Amazon. I added 12 volt LED track lighting and replaced the shelves with heavier grade 8mm glass from a local glass shop. 

Super display @James Regan - I was amazed to realise that the Pennsy GG1 (a very sexy electric) - even allowing for the fact that it is HO rather than 00 was just similar in size to a Brush 4!

Was there a Pennsy K4s Pacific in the collection - I would have loved to have had a run behind one.

Edited 4 hours ago by leslie10646