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Caravan manufacturing business collapses as market focuses on smaller, cheaper vehicles

Yolanda Redrup /

An Australian manufacturer of caravans, which once turned over more than $1 million, has collapsed owing creditors around $500,000.

Aussie Wide Caravans manufactures custom-made caravans from scratch, but was placed in administration on September 9, 2013.

Administrators Stephen Dixon and Andrew Hewitt from Grant Thornton were appointed.

Dixon told SmartCompany the business’s operations have ceased as fewer people have opted to spend their discretionary income on large, expensive vehicles.

“It really has been caused because of the economic downturn and increased competitiveness in the sector,” he says.

“They build the caravans from the ground up and with the economic downturn Gen Y or the older community weren’t buying caravans. Generally these generations are its target audience.”

Dixon says the business’s main creditors were “a related party who had injected money into the company” and the Australian Taxation Office.

The company had manufactured caravans in four models and its main assets are a fully-functioning factory and an already-built caravan.

“We’re putting it up for sale and there has already been interest from the industry,” Dixon says.

“We’re hoping to wrap up the sale process in the next two to three weeks.”

Aussie Wide Caravans is just one in a string of caravan businesses to collapse this year.

Upwards of six caravan businesses have been placed in administration, ordered to wind up or liquidated since April this year, including Scenic Caravans, Lakedge Caravan Park, and Caravans and Campers.

The latest figures from IBISWorld show the industry has grown at a rate of just 2.1% in the past five years, with the global financial crisis taking a massive chunk out of the industry’s growth – most potential buyers opted for smaller vehicles.

“The recreational vehicle market boomed prior to the global financial crisis, due to a rise in the popularity of the RV lifestyle,” it said in a recent report.

“However, as the global credit crisis emerged, sales in the industry slowed down and revenue fell in 2008-09. Many consumers moved from high-end trailers and caravans to smaller and cheaper vehicles,” the IBISWorld report says.

However, the report found demand for caravans and similar vehicles has since recovered.

“Higher consumer sentiment and disposable incomes will benefit the industry over the next five years,” the report says.

“The ageing population will also result in greater customer numbers as more people enter the main consumer demographic [those aged over 50].”

IBISWorld predicts the industry will grow at 2.3% per annum over the next five years and generate $2.65 billion.

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