Soaring costs and cheap imports blamed as caravan maker Zone RV folds

Australia's caravan manufacturing sector faces a crisis, with Zone RV the latest casualty and insiders warning cheap Chinese imports are destroying local businesses.

Competition from cheap Chinese imports, soaring costs and a general lack of understanding of how to sustain a business have contributed to a flurry of company collapses in the caravan and camper manufacturing sector, insiders say.

Australia’s caravan industry has been rocked by multiple company collapses in the past 18 months, with failed manufacturers owing tens of millions of dollars to devastated customers, staff and suppliers.

The latest, Zone Manufacturing – which traded as Zone RV – and Zone RV Holdings went into administration on Monday morning, leaving 250 staff out of work just before Christmas and scores of customers without their vans.

Luxury caravan builder Zone RV is in administration.

The Sunshine Coast business will continue to trade “in a substantially reduced capacity” while administrators look for ways to mitigate the damage.

Other recent collapses have included Melbourne’s Tango Caravans, which sent its owner bankrupt and left 60 customers out of pocket and without vans in May.

Companies behind Highline Campers, Infinity Motorhomes and Boss Adventure, which has since found a new owner, have also bit the dust.

Sarah Horter of collapsed company Tango Caravans is now bankrupt.

Tracy Brunes, founder of fellow Sunshine Coast caravan maker Bushtracker, has run his business for more than 30 years.

Distressed former employees of Zone have already contacted his company hoping to find employment after being left jobless.

Mr Brunes said it was tough to see another business in the sector go under, saying rising costs and increased competition was challenging the sector.

While he did not have knowledge of the specific reasons for Zone RV’s collapse, he said many manufacturers were carrying too much debt.

“There are so many Chinese imports coming into the country – and the Chinese do a much cheaper product,” he said.

“And everybody’s dealing with inflation costs – I think a lot of people haven’t come to terms with how quickly prices are rising – on average I’d say costs are up by 40-50 per cent in the past three or four years.”

Tracy Brunes of Bushtracker Caravans.

Like all industries, the expectations of running a business don’t always translate to reality, Mr Brunes said.

“There have been a lot of people who have worked for the caravan industry with other manufacturers and think they know it all so they form their own company to make the big bucks,” he said.

“But they only know one piece of the pie and their monetary investments are just not enough for start-up capital.

“When you go to the trade shows there are always one or two new ones there – but they’re not usually there the following year.”

Bushtracker was founded in 1995 by Mr Brunes and his friend Steve Gibbs, out of the frustration of not being able to find a caravan to offer a comfortable lifestyle.

Mr Brunes said providing a fully Australian made product and finding a reliable team had helped his company succeed where others were not.

“We don’t want to be the biggest manufacturer, we want to be the best one,” he said.

Qld caravan giant Zone RV collapsed, putting 250 jobs at risk on Queensland’s Sunshine Coast.

Caravan Industry Association of Australia spokesman Luke Chippindale said governments needed to help the industry as it battled rising labour costs and soaring energy prices.

“Caravan manufacturing remains a hands-on industry, such is its complexity it still means a labour-intensive build, heavily customised, and reliant on supply chains that are often under tension,” he said.

“Government policy has largely failed to recognise these persistent vulnerabilities.

“There is no co-ordinated national strategy to support Australian manufacturing, whether through incentives, regulatory modernisation, or supply-chain resilience measures.

“Without such action, the sector continues to operate in an environment where margins are narrowing, quality risks increase, and sovereign manufacturing capability erodes with each passing year.”

David Biggar, director of luxury caravan builder Zone RV, which is in administration.

Mr Chippindale said it was the cost to operate, not imports themselves, that was dragging on the industry.

“Consumers will move to lower price points if they can – this isn’t their fault either,” he said. “Unfortunately, manufacturing in Australia is expensive and the decline has not happened overnight.

“It is the direct result of successive governments failing long-term industrial strategy that strengthens domestic capacity rather than outsourcing it.”

Despite the challenges, Mr Chippindale said it wasn’t all bumpy roads for the sector.

“Australian caravan manufacturers make high quality product, a product that is designed and built to be used unlike any other in the world,” he said.

“Furthermore, as Australians, we love to see our country and we love to do it on our terms – this means that caravanning remains the backbone of domestic tourism, with something for everyone at every price point.

“This creates a stable underlying market for manufacturers to innovate.”