Are people still buying (new) kit cars?
Discussion
One of the things I wonder about when I contemplate the future is what direction I should take my own business in. For a long time I have wanted to be a kit car manufacturer, and am well on the way to developing a product which ought to be able to take a small piece of the market. However, in view of the way the economy is going, I wonder whether now is the right time to invest in putting myself in the manufacturing position, or whether I would do better to stay as I am for the next couple of years or so, and see how things are then?
Be interested in getting other views on this. I must admit to being very wary myself at the moment.
Be interested in getting other views on this. I must admit to being very wary myself at the moment.
jason61c said:
The good ones are still selling. It all depends on the product you're hoping to offer and its own virtues.
One would like to hope that a good poduct will sell, but my worry is that when times are bad, even good products, if they are basically discretionary purchases, will not sell in worthwhile quantities. I was speaking to a couple of builder friends of mine this morning, and they are finding things quite tough going at the moment. They specialise in extensions and the like, and they've seen their waiting list shrink drastically recently. I guess things like extensions, new kitchens etc are things that people can put off.Do you have any recent info on kit car sales (I mean the last few months)?
"sales dont always equal profit but if you havent got sales you havent got a business"
i was with the venomGT the weekend which sat along side my car which from all accounts has had ££££££££££s on development but is a finished car, developed car in every sense of the word and very professional. Although at the end of the day a few people looking at it described it as a cut and shut exige.
If however you dont sleep well at night anyway, you could cobble up a half assed non finshed "kit" that is down to the home builder to finish off with negligable development costs where sales are much more likely to be transfered to profit due to minimal investment payback to yourself....i am sure you wouldnt want to be involved with that scene so whatever you do make sure its fully finished, IVAd, road going demo car for people to view to see what they will be building...
my advice FWIW would be unless youve £200k to put (and potentially write off) to the above scenario, move on.......
i was with the venomGT the weekend which sat along side my car which from all accounts has had ££££££££££s on development but is a finished car, developed car in every sense of the word and very professional. Although at the end of the day a few people looking at it described it as a cut and shut exige.
If however you dont sleep well at night anyway, you could cobble up a half assed non finshed "kit" that is down to the home builder to finish off with negligable development costs where sales are much more likely to be transfered to profit due to minimal investment payback to yourself....i am sure you wouldnt want to be involved with that scene so whatever you do make sure its fully finished, IVAd, road going demo car for people to view to see what they will be building...
my advice FWIW would be unless youve £200k to put (and potentially write off) to the above scenario, move on.......
singlecoil said:
One would like to hope that a good poduct will sell, but my worry is that when times are bad, even good products, if they are basically discretionary purchases, will not sell in worthwhile quantities. I was speaking to a couple of builder friends of mine this morning, and they are finding things quite tough going at the moment. They specialise in extensions and the like, and they've seen their waiting list shrink drastically recently. I guess things like extensions, new kitchens etc are things that people can put off.
Do you have any recent info on kit car sales (I mean the last few months)?
Not to mention which kits as its not my place but if I said over the past 12 months 50 of one 25 of another. Not bad for a recession!?Do you have any recent info on kit car sales (I mean the last few months)?
GD have a long waiting time too and they're at the top end of kits.
My advice is to build something that YOU like yourself. One that is not built to the markets expectations but to your own. Rather than nailing in blocks to an mdf board for a chassis, build a steel jig. Wont take too much longer and would be easy to flog for the cost of the materials later on down the track.
You can then drive around in something you like and perhaps develop it more and it becomes the demo model. That way you only build one when somebody puts down a deposit for one. Perhaps a sticker on the back and turning up to track days and car shows rather than out and out advertising to keep things cheap.
The kit car industry in Australia is pretty much dying...except for turn key cars that come registered. Our regulations are a real pain at the moment. I can only hope that the pommy govt doesnt go down the same path as we did. "two cars crashed into each other. One was a kit car therefore 50% of crashes on the road are the fault of dangerous kit cars. Ban them to hell"
You can then drive around in something you like and perhaps develop it more and it becomes the demo model. That way you only build one when somebody puts down a deposit for one. Perhaps a sticker on the back and turning up to track days and car shows rather than out and out advertising to keep things cheap.
The kit car industry in Australia is pretty much dying...except for turn key cars that come registered. Our regulations are a real pain at the moment. I can only hope that the pommy govt doesnt go down the same path as we did. "two cars crashed into each other. One was a kit car therefore 50% of crashes on the road are the fault of dangerous kit cars. Ban them to hell"
dmulally said:
My advice is to build something that YOU like yourself.
I would do that anyway, but my problem is that the resources pursuing the manufacturing thing would take up, espcially space, but equally important would be attention, it would be difficult to the point of nearly impossible to concentrate on both, there isn't enough of me to go keep my business going as is, and develop a new product. That's why I need to pick the right time, and quite honestly I doub that time is now. I believe consumer confidence has taken a nose dive not so much int he last couple of years, but in the last 6 months.There is nobody unaffected by the austerity measures that are starting to come in, and as those measure start to bite, things are going to get worse, both in perception and reality.
I think you already know your answer, mate. I go through the same ups and downs myself. I have passed through about three drop dead dates but have given my notice at work and wont have a choice come June. As you know, I am doing something different to you but in the same industry.
There are two sides to the coin the way I see it personally for me. One is that I love my hobby of car building and the dream of one day making that my job gives me great satisfaction when things arent going so well in other parts of life. I have spent a bit of time in hospital lately and it gave me so much joy to be planning and designing and upon release I was like a bat out of hell welding, sanding, grinding etc. I work in a desk job and come home time I love getting dirty and creating. I also love meeting a deadline.
The other side of the coin is taking away that dream by making it a reality and having it fail. What happens then?
I know its a throw away thing to say but if you ask a bunch of oldies the thing they regret the most in their lives they will tell you that they didnt take enough risks. I spent time on a French Army farm that makes wine and things and houses a bunch of old soldiers that wouldnt cope well being released back into society. Most of them had more medals than I thought possible in one lifetime. Through getting to know them day to day, most of them regretted not taking more risks with their lives. I was very young at the time so thought it odd that they could run around under fire like angry bees and regret not taking risks. Now Im a little balder I now know what they were referring to.
Sorry to get all philosophical on you, mate.
There are two sides to the coin the way I see it personally for me. One is that I love my hobby of car building and the dream of one day making that my job gives me great satisfaction when things arent going so well in other parts of life. I have spent a bit of time in hospital lately and it gave me so much joy to be planning and designing and upon release I was like a bat out of hell welding, sanding, grinding etc. I work in a desk job and come home time I love getting dirty and creating. I also love meeting a deadline.
The other side of the coin is taking away that dream by making it a reality and having it fail. What happens then?
I know its a throw away thing to say but if you ask a bunch of oldies the thing they regret the most in their lives they will tell you that they didnt take enough risks. I spent time on a French Army farm that makes wine and things and houses a bunch of old soldiers that wouldnt cope well being released back into society. Most of them had more medals than I thought possible in one lifetime. Through getting to know them day to day, most of them regretted not taking more risks with their lives. I was very young at the time so thought it odd that they could run around under fire like angry bees and regret not taking risks. Now Im a little balder I now know what they were referring to.
Sorry to get all philosophical on you, mate.
singlecoil said:
I would do that anyway, but my problem is that the resources pursuing the manufacturing thing would take up, espcially space, but equally important would be attention, it would be difficult to the point of nearly impossible to concentrate on both, there isn't enough of me to go keep my business going as is, and develop a new product. That's why I need to pick the right time, and quite honestly I doub that time is now. I believe consumer confidence has taken a nose dive not so much int he last couple of years, but in the last 6 months.
There is nobody unaffected by the austerity measures that are starting to come in, and as those measure start to bite, things are going to get worse, both in perception and reality.
My advice is get started on it alongside your current work, but let it be developed over time. Theres nothing to stop you ignoring it for a while when you get on with your normal work and going back to it whenever you like. Alot of great cars have been built as 'saturday' projects - I say go for it, but take your time and dont let it compromise what you are already doing.There is nobody unaffected by the austerity measures that are starting to come in, and as those measure start to bite, things are going to get worse, both in perception and reality.
I also disagree with the person who mentioned a 200k budget... unless you're building a car to be sold at a significantly huge budget (like the one linked to in his profile!) then I see no reason why someone with your obvious skill set and knowledge of the area cannot produce something at a fraction of that money. I am guessing you're thinking sub-20k thrills??
Go for it.
"Sales don't always equal profit." Well, I think the answer is in there, if you are not making profitvfrom sales then it is a pretty poor business isn't it? Something is very wrong and non sustainable as a business, no matter what business it is. I'd imagine unless you are making a healthy profit on your basic kit price and a trickle of profit from the sale of extra components then it is a total lost cause.
You could probobly make a little money on turnkey vehicles if they go together smoothly and quickly giving a reasonable return for your labour charge, but nailing and glueing some of the more basic kits together cannot make a profit surely?
Does anybody know what happened to the guy selling 7'esque kits from his Vauxhall dealership? Think he was selling turnkey cars for about £11k and they looked quite good, dud he make any money?
You could probobly make a little money on turnkey vehicles if they go together smoothly and quickly giving a reasonable return for your labour charge, but nailing and glueing some of the more basic kits together cannot make a profit surely?
Does anybody know what happened to the guy selling 7'esque kits from his Vauxhall dealership? Think he was selling turnkey cars for about £11k and they looked quite good, dud he make any money?
I suspect space will be your biggest issue.
Whilst developing the car you will need getting on for 3 or 4 car spaces for your body bucks and the moulds you will take off them.
When you are production ready you may be able to store the moulds at the GF company (as we do). If you want to do the lay-up yourself then they will continue to take up space.
The chassis jig will take up about 2 car spaces as it will need to be bolted down and have access all round for you and your welder. Then there is a fixed position for your steel chop saw and storage for 6M lengths of steel of various sections.
Next is space to kit marshall and space to store all the loose parts you will supply in the kit, springs, shocks, fixings, suspension parts etc. Just prior to a customer collecting a kit you will have a huge pile of stuff to deal with.
Steve
Whilst developing the car you will need getting on for 3 or 4 car spaces for your body bucks and the moulds you will take off them.
When you are production ready you may be able to store the moulds at the GF company (as we do). If you want to do the lay-up yourself then they will continue to take up space.
The chassis jig will take up about 2 car spaces as it will need to be bolted down and have access all round for you and your welder. Then there is a fixed position for your steel chop saw and storage for 6M lengths of steel of various sections.
Next is space to kit marshall and space to store all the loose parts you will supply in the kit, springs, shocks, fixings, suspension parts etc. Just prior to a customer collecting a kit you will have a huge pile of stuff to deal with.
Steve
I was once told by a kit car manfacturer ( a succesful one, at that) the saying in the UK kit car market, is "if you want to make a small fortune in kit cars, start off with a large one".
The best time to start a new business is in a recession. Premises are cheaper about 50% than two years ago, staff are cheaper and more flexible, you can negotiate better terms with suppliers and run a cash positive business model.
The challenge is to drop what your day job is and throw yourself into doing it 100%, commitment is whats needed. Believe me the figure to do that is about £150K to £200K for your first year costs.
Or you could try and do it as a saturday project, but I believe this would fail,as normal life gets in the way and you cant do the full development and marketing and everything else in 16 hours a week.
If you'd like to chat to get some more info, as its what i'm excatly doing know, give me a bell.
Paul
The best time to start a new business is in a recession. Premises are cheaper about 50% than two years ago, staff are cheaper and more flexible, you can negotiate better terms with suppliers and run a cash positive business model.
The challenge is to drop what your day job is and throw yourself into doing it 100%, commitment is whats needed. Believe me the figure to do that is about £150K to £200K for your first year costs.
Or you could try and do it as a saturday project, but I believe this would fail,as normal life gets in the way and you cant do the full development and marketing and everything else in 16 hours a week.
If you'd like to chat to get some more info, as its what i'm excatly doing know, give me a bell.
Paul
Also remember just because the home economy is slow, other countries are booming, mainly those with raw material resources they can export.
Target those countries, the internet makes the world a very small place these days, export or die helped us out a long time ago and its much easier to do these days.
People also focus to much in quieter times on the reductions, even in a recession only a few % of GDP is lost and 98% still happens and these things always come in cycles and we come out of them.
I also think turnkey is the place to go, people with money always have money, the thing they dont have is time, supply a quality product they can enjoy straight away and you will sell.
Target those countries, the internet makes the world a very small place these days, export or die helped us out a long time ago and its much easier to do these days.
People also focus to much in quieter times on the reductions, even in a recession only a few % of GDP is lost and 98% still happens and these things always come in cycles and we come out of them.
I also think turnkey is the place to go, people with money always have money, the thing they dont have is time, supply a quality product they can enjoy straight away and you will sell.
I recently retired as a Chartered Accountant.
I have been building kit cars for over 40 years.
Built over 20 and have had several Kit Car Manufacturers as clients.
My take on the Kit Car business is that it is best suited to hobby trading.
Very few manufacturers really make money from their businesses.
A great many have an involvement in racing, driving, enjoying and constructing kit cars but their primary motivation is not making money.
There are a few I have met who were exceptionally good businessmen.
A minority
Most had either inherited money or a business or had family income which meant that their efforts could be directed at doing what they enjoyed without pressure to create significant income.
The kit car business currently seems to me to be likely to suffer from the consequences` of the biggest economic depression since the 1930's.
Ask yourself when you last saw a run on a Bank in the UK as with Northern Rock in 2008. Not for 120 years that's when.
The economic consequences will last for years and years and years.
If you want to be self employed in business, which I think is inadvisable currently, anyway, I would stick to a career either making, distributing or providing economic essentials.
The luxury markets must be the most vulnerable.
Sadly nobody needs a kit car: we all need to eat, live, sleep, have a home, clothes, travel etc.
Much as I still love Kit Cars I would NOT seek a living from them.
But you may be another Tim Dutton Woolley or Chris Smith in which case you will do well. However that is not a direction I would favour in the current economic climate.
Timing is one of the greatest gifts in business.
Does the country need a need another kit car now? Exactly.
I apologise if I seem negative but with the on costs of IVA and all the bureaucracy of modern business I really think this is a difficult route. In fact running ANY business in the UK nowadays is a difficult route.
Can't recommend it to you.
But I would be very interested to hear how you go.
I have been building kit cars for over 40 years.
Built over 20 and have had several Kit Car Manufacturers as clients.
My take on the Kit Car business is that it is best suited to hobby trading.
Very few manufacturers really make money from their businesses.
A great many have an involvement in racing, driving, enjoying and constructing kit cars but their primary motivation is not making money.
There are a few I have met who were exceptionally good businessmen.
A minority
Most had either inherited money or a business or had family income which meant that their efforts could be directed at doing what they enjoyed without pressure to create significant income.
The kit car business currently seems to me to be likely to suffer from the consequences` of the biggest economic depression since the 1930's.
Ask yourself when you last saw a run on a Bank in the UK as with Northern Rock in 2008. Not for 120 years that's when.
The economic consequences will last for years and years and years.
If you want to be self employed in business, which I think is inadvisable currently, anyway, I would stick to a career either making, distributing or providing economic essentials.
The luxury markets must be the most vulnerable.
Sadly nobody needs a kit car: we all need to eat, live, sleep, have a home, clothes, travel etc.
Much as I still love Kit Cars I would NOT seek a living from them.
But you may be another Tim Dutton Woolley or Chris Smith in which case you will do well. However that is not a direction I would favour in the current economic climate.
Timing is one of the greatest gifts in business.
Does the country need a need another kit car now? Exactly.
I apologise if I seem negative but with the on costs of IVA and all the bureaucracy of modern business I really think this is a difficult route. In fact running ANY business in the UK nowadays is a difficult route.
Can't recommend it to you.
But I would be very interested to hear how you go.
Steffan said:
As above
My feeling is that things have got a lot worse in the last few months, and are all set to go further downhill. People are saying that things will get better eventually, but what they are not saying is what the source of the betterment is going to be, and I believe that when they say things are going to get better it's just from wishful thinking and the fact that, in the past, they have. Not this time, I reckon.
I would be buying one if the kit car manufacturers actually made something i wanted to buy.
There are about 20 different types of Lotus 7 replica, about 20 different tyres of Cobra replica. But what if i dont want one of these?
The Libra is a good car but too ugly for me. The Ultima and GT40 replicas are good but pricey.
Then theres the Murtaya which i'm a big fan off but overpriced for what you get.
So the only kit on sale which i would actually buy is the MEV Rocket.
Where's the E-Type replicas? When are Parallel Designs going to release their version of the Muira? Then they will begin speaking my language!
There are about 20 different types of Lotus 7 replica, about 20 different tyres of Cobra replica. But what if i dont want one of these?
The Libra is a good car but too ugly for me. The Ultima and GT40 replicas are good but pricey.
Then theres the Murtaya which i'm a big fan off but overpriced for what you get.
So the only kit on sale which i would actually buy is the MEV Rocket.
Where's the E-Type replicas? When are Parallel Designs going to release their version of the Muira? Then they will begin speaking my language!
Kong, why would you want an e-type replica when you can buy a good useable real one for under £30k? How much do you think a good "replica" would cost to build, IVA and register? If you want a good one then maybe a second hand Challenger for £15k would be a good bet. I think cost-effective e-type replicas ( not Pinto powered things ) are finished for now.
The reson the market is flooded with 7'esques and Cobras is the fact that they can be built for pretty much how little or how much you want to spend. Oh, and the fact that this type of car is what people like and are capable of building with just hobby skill level. Can't see that changing too much in the future either.
I agree MEV is a breath of fresh air.
The reson the market is flooded with 7'esques and Cobras is the fact that they can be built for pretty much how little or how much you want to spend. Oh, and the fact that this type of car is what people like and are capable of building with just hobby skill level. Can't see that changing too much in the future either.
I agree MEV is a breath of fresh air.
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