"A really big trade fair again at last"
Interview with Florian Sieber, Märklin
The Spielwarenmesse was cancelled two years in a row and model railway manufacturer Märklin even had to call off its big open days. But now things are kicking off again and Florian Sieber, managing partner of Märklin, is delighted that the Spielwarenmesse is now allowing the general public into Hall 7A to look at the model railway and model construction section of the fair.
By Peter Pernsteiner
Over the past two years, the pandemic has taken a heavy toll on the entire toy industry. A lot of exhibitions had to be cancelled and even the Spielwarenmesse was only held twice on a small digital scale. This also affected the model railway manufacturer Märklin. The much publicised supply chain problems were not the only setbacks. With a heavy heart, the company also had to cancel the International Model Railway Exhibition in Göppingen in 2021 in combination with the open "Märklin Days". And to top it all, the opening of the company’s museum "Märklineum" had to be postponed several times - but since June 2022 the Märklineum has been open to visitors in all its glory and without any restrictions. The pandemic did, however, have a positive aspect - many people rediscovered their forgotten hobby of model railways. We talked to Florian Sieber about these past two years and about the upcoming Spielwarenmesse 2023.
Your company had to cope with some huge restrictions during the pandemic, but you seem to have got through this crisis more or less unscathed!?
Florian Sieber: At the beginning of the pandemic we were extremely concerned. On the one hand, the lockdown seemed to have destroyed the very basis for our turnover - local specialist shops. On the other hand, high illness rates in our factories meant that we had to close down some plants. However, thanks to the protective measures we took, production could be restarted quickly. And just at the right time, since retail trade had begun to adapt to the new situation quite quickly with digitalisation and resourceful measures such as contactless handover. In combination with the good decisions we have made over the last decade such as products targeted at specific groups, ensuring good stocks and keeping prices in line with the market, we succeeded in turning the result around and experienced two very good years - as did other companies on the market. The consumers' desire to pursue a meaningful hobby when contacts were restricted has been beneficial for the entire industry.
How satisfied are you with the sales over the past years?
Florian Sieber: We have to take a differentiated look at the last two years: during the lockdown, business developed very well for the reasons mentioned above.
2022 was much more challenging. Due to the ongoing pandemic problems in China, we also felt the impact of shortages and delivery problems with one or other product - in spite of the fact that we had stocks of electronic components to last us for up to 18 months in some cases. On multiple occasions we had to buy in replacement components and redesign the electronics for some products and this resulted not only in higher costs but also delays in delivery.
In addition, Russia's war against Ukraine also had a definite economic impact on us. In particular, cost increases in our production processes - from raw materials and energy through to the wages of our employees.
But that also led to higher end consumer prices, which not everyone can afford by far. You're probably not in the happy position that everyone is dying to buy your expensive high-tech models?
Florian Sieber: Of course, we also had to pass on part of these cost increases in the form of price increases, although we tried to keep the increases as small as possible. The hobby must remain affordable. Especially now, when people are longing to possess a bit of that ideal world that model railways offer. Nevertheless, we certainly sense that some customer groups are holding back as they have to cushion cost increases from other vital areas.
But we still cannot see any signs of a change in demand when it comes to the ratio of high-tech models to more affordable products. Even though we cannot match last year's result, we are still well above the level of pre-pandemic years. Our Christmas campaigns with reduced-price starter sets again resulted in a comparable number of new customers in last year’s Christmas business.
Major events connected to our G and Z gauges also gave us a boost. One was the fantastic world record set by the Rhaetian Railway in Switzerland on 29 October 2022: the longest passenger train with a length of almost two kilometres on one of the most beautiful stretches of railway in the world. As one of the key partners in this project from the very outset, we have of course benefited from the enormous media echo triggered by this spectacular event. On the other hand, the advertising provided by Märklin and our LGB brand also gave the event a great boost. A win-win situation I would say, and this is what is needed in difficult times in order to give railways the attention they deserve.
Z gauge also benefited from our activities surrounding the 50th anniversary in 2022 - a large product portfolio, lot of promotional activities and the highlight at the Z gauge meeting in Altenbeken in May, where we celebrated the Mini Club's birthday with the Z gauge community.
In addition to the Märklin and Trix gauges Z (1:220), N (1:160) and H0 (1:87), very large railways with 45 millimetres gauge also play a strong role in your company, don't they?
But such premium models also have their price - € 3,649 for the current gauge 1 model of the Bavarian S 2/6 is a lot of money. You can't sell thousands in this segment and not everyone has the room for them.
Florian Sieber: You’re right there. However, we work with extremely low quantities in this segment and somehow have to recoup the tooling and development costs. If you look at the competition for this gauge, I think we are doing a great job and in comparison are creating very competitive models which keeps the trade alive.
Our locomotives also have a very attractive design and can be put on display in one of our presentation showcases in your living room, conference room or office, for example. That’s always an interesting topic of conversation for visitors. What’s more, with our new functional showcases you can control all the functions of our gauge 1 rolling stock with your smartphone - quite an impressive show.
Apart from gauge 1, you mentioned earlier that your company produces another type of model railway. But with a track spacing of 45 millimetres, this brand serves a completely different customer group - LGB!
Florian Sieber: Our LGB garden railway is also very popular. In this sector we offer on the one hand a mix of inexpensive models that have great fun value, such as the Harz locomotives or the Swiss RhB locomotives. On the other hand, we have high-end models for the discerning collectors. These include the HG 4/4, the Rhaetian Crocodiles or the first steam locomotive of the RhB - the Rhaetia. A real highlight for friends of Swiss railways who also have a liking for long trains is the new multiple unit Capricorn. Our train is an exact model of the one that pulled the world record train last year. The complete 4-part train measures an impressive three metres. If you buy 25 sets, you could easily build the complete 100-part world record train. No. Joking aside. With our large gauges you really get a lot for your money!
LGB benefited from the world record event in Switzerland in autumn and for gauge 1 there was a trade fair again for the first time in summer in Speyer, though on a small scale. On 10 /11 December 2022 Märklin also had a stand at the "Gauge 1 Days" in Mellrichstadt. When do you plan to go to bigger trade fairs again?
Florian Sieber: The International Gauge 1 Meeting in Speyer was a small test run for us after the Covid pandemic. These special fairs are very important for our niche market products like gauge 1. That's why we were happy to go to Mellrichstadt. But the big fairs have now also restarted. Both our staff and our customers enjoyed the International Model Railway Exhibition in Friedrichshafen at the beginning of November. People could finally get together again, talk shop and, above all, look at models and layouts. The big trade fair run in 2023 begins for us with the Spielwarenmesse in February, which for the first time features two days for the general public in the model railway hall, followed by Mannheim in March and Dortmund in April. This means that we can present our new products live in the form of samples to most of Germany and neighbouring countries in quick succession.
What can customers look forward to at your Märklin stand?
Florian Sieber: We announced our new products on 17 January. It's a colourful array of great steam locomotives including the Class 01.10, the Class 43 as well as modern engines like the Dual Mode Vectron, nostalgic trains such as the Pullman Edelweiss and even design icons like the Metropolitan train by MINITRIX. A feast for the eyes - just like before the pandemic - we are looking forward to it as much as our customers. Visitors can look forward to seeing layouts in every gauge and there will competent personnel on hand to talk to.
Can the new locomotives and trains be seen in action?
Florian Sieber: Some new products will be running on tacks, but the majority are still samples that are presented in the showcases.
The last two days of the fair, 4 and 5 February 2023, will see the first "Model Railways and Model Construction Open Day" when the gates of Hall 7A open to the general public. What do you expect from these two days and what can visitors look forward to?
Florian Sieber: I'm really looking forward to the fair, which is finally happening again. Model railways are a central part of the Spielwarenmesse. The Open Days are a great idea, in our opinion. We can kill two birds with one stone: firstly, trade visitors have a chance to talk to each other and secondly, we can use the infrastructure to surprise our customers. We will show samples, present models and get early feedback from the end customers about the programme.
Our product developers and the whole team have long been preparing for the moment when they can finally present their products to our customers. With the Open Days in Nuremberg this will happen earlier in southern Germany than in the past where the fair season traditionally started with the events in Mannheim and Dortmund. That's why we were in favour of the idea when the Spielwarenmesse made the proposal to open the halls to end consumers at the weekend.
About the author:
Peter Pernsteiner discovered his love of technical journalism when studying electrical engineering and joined the editorial staff of a large ICT trade magazine soon after. Since 1994, he has worked as a freelance journalist, focusing on tech topics – including for model railway magazines. In 2016, he also started a YouTube channel for technology reports which has since attracted global attention.