Stay-at-home holidaymakers give a boost to caravan industry

The heartland of the UK's caravan and holiday home manufacturing industry, it suffered badly during the downturn as consumer confidence crumbled.

Manufacturers and suppliers responded by shedding hundreds of jobs to cut capacity, as big ticket items became a luxury and orders stalled. Others were forced into administration, unable to refinance or offload stock.

But some of those that toughed out the recession say the past year has seen a remarkable recovery.

A two-day annual caravan show at The Lawns in Cottingham this weekend, is expected to attract more than 20,000 visitors, as manufacturers showcase models for the new season.

Swift Group, the UK's biggest manufacturer of touring caravans and motorhomes, had a "very successful" year, according to marketing director Richard White, thanks to the popularity of holidaying in Britain and the weakness of sterling.

"It (2010) has been a very positive," said Mr White. "It will see trends back around about the level of pre-2008, before the recession hit.

"Market share has gone up by two or three per cent and our sales of touring caravans have gone up by 26 per cent. Orders from the dealers for the next six months are very strong."

The firm, based in Cottingham, cut more than 300 jobs during the downturn, but over the past year or so has added about 200, to give it a 900-strong workforce. It expects to see sales return to around 200m this year.

The group recently signed a 30m financing agreement with GE Capital to help fund its increase in sales.

Swift is the only company in Europe to manufacture touring caravans, motor homes and holiday homes. Touring caravans, which are towed behind vehicles, are generally cheaper than motorhomes, which include a built-in engine. Swift has concentrated its range on the lower-to-middle end of the market, where demand has been strongest.

The National Caravan Council said sales of motorhomes have struggled, with new motorhome registrations down 16 per cent in the year to June, compared with a year earlier.

Jim Hibbs, managing director of Hull's Coachman Caravans, said this year has been its "most successful yet". "We've got a very full order book, the best we've had for 24 years," he said.

Its workforce is up to 142, close to the 150 staff it had before the recession. Its factory is operating at capacity and staff are working overtime to meet demand. The firm, which specialises in touring caravans, has invested more than 700,000 in capital expenditure over the past year.

But the industry is not out of the woods yet, warned Mr White, with government austerity cuts and the 20 per cent VAT increase casting a shadow over next year.

Along with suppliers and dealers, Mr White estimates the caravan industry employs about 10,000 in East Yorkshire.

"We have to keep our feet on the ground and say that with VAT going up in January, all the budget cuts in the public sector and the clear message that Britain has to repay its debt, there's a degree of caution and uncertainty as to what the market level will be in the first quarter of next year," he said.

He expects people to bring forward big ticket purchases to beat the January VAT increase. Higher raw materials prices are also adding pressure, he said.

"We are under greater pressure from suppliers wanting to put prices up linked to steel, oil, etc," said Mr White. "Some suppliers are saying double-digit price rises. At the moment we are saying we cannot accept these price increases. We don't want to turn customers off."

John Lally, director general of the National Caravan Council, said: "Manufacturing output has exceeded expectations so far this year.

"However, following the recent Budget and the planned increase in VAT in 2011, the caravan industry will need to continue to work hard to maintain this upward trend and to deliver a top-quality product at the right price for our customers."