Will caravans be cheaper under Trump’s trade war?

US President Donald Trump’s tariffs have taken a wrecking ball to global economies, but will the trade war with China bring down the cost of caravans in Australia?

It’s no secret that most of the components in new caravan builds come from China. So, with the US imposing a 145 per cent tariff on Chinese imports, will there be a glut of cheaper components coming to Australia, and what impact might that have on retail caravan prices?

The Caravan Industry Association of Australia (CIAA) says component sourcing may become more competitive, temporarily reducing supply costs for the caravan industry.

“In the short term, Chinese manufacturers, facing increased barriers to the US market, may seek to expand their presence in alternative markets, including Australia,” the CIAA told its members in April. “This could lead to a temporary decrease in prices for certain components, as Chinese suppliers attempt to offload excess capacity.”

Buy now or later?

But don’t hold off buying a new caravan in anticipation of getting a bargain in a few months’ time. Market volatility and a weak Australian dollar could yet push caravan prices up.

Robin Harris, CEO of On The Move Caravans, who manufacture 80 per cent of their caravans in China, says if there’s any price movement in materials and end product, it will likely be up not down.

“Any consumer out there who thinks, I’ll hold off this product, it’ll get cheaper, I think is really going to be in for a surprise, and not a good one, because I think if there is price movement, it will be in an upward direction.”

Harris says On The Move has locked in a three-month price freeze at its factories in China to temporarily arrest any increase in the cost of manufacturing. Some 800 of the 1000 caravans On The Move produces a year are manufactured in China and shipped – almost completely assembled – to Australia. The remaining 200 are built in the company’s Melbourne factory.

Our reliance on China

Wholly Australian-made caravans are also caught up in the trade uncertainty, as the bulk of caravan components come from China. “There is no single Australian manufacturer, regardless of the brand name, who is not [having] anywhere from 60 to 80 per cent of their componentry coming out of China,” Harris says. “So every roof hatch, every window, every door, every washing machine, every TV, every microwave, every fridge – everything is made in China. Most of our brake hub assemblies come out of China, most alloy wheels come out of China, most tyres come out of China.”

Jayco, Australia’s largest RV manufacturer, says it’s monitoring global trade developments closely as economic forces can affect material costs and supply. But the brand doesn’t expect the trade war to directly impact local production, with a large portion of Jayco’s build, including the chassis, cabinetry and furniture, manufactured at its Melbourne factory.

“At this stage, the US tariffs are not expected to have a direct impact on Jayco’s manufacturing operations in Australia,” says Scott Jones, Jayco’s national head of sales and marketing. “Our supply chains are largely independent of US manufacturing, and our primary focus remains on supporting Australian-made products, using a mix of local and globally sourced components.”

Exporters feeling the pinch

The trade turmoil is also impacting Australian manufacturers at the export end of the supply chain. On The Move was looking to expand into the US market next year, but has shelved those plans for now amid economic uncertainty. Crusader Caravans had formalised a $3.5 million deal with a US dealer for the delivery of 50 caravans just before Trump imposed a 10 per cent tariff on Australian imports. Crusader managing director Michael Paidoussis says Crusader will absorb the fee hit on the first shipment of 10 caravans, due to arrive in the US in August. It is re-negotiating cost arrangements for the remainder, with some of the expense expected to be partly recouped by Crusader through improved operational efficiencies.

“It’s a curveball that we didn’t expect,” Paidoussis says. “But it’s one that we’re well placed to deal with and we’re dealing with it as best as we can.”

So, what is the advice for Australian consumers? Invest in a crystal ball before you stump up the deposit on a new caravan.

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