In Aulendorf, Germany, at the headquarters of Carthago, we met with CEO Bernd Wuschack. He explained how the key to success of one of the very few independent European groups is to be the “best in class” in all the market segments where it is present.
Words Paolo Galvani
Photo Enrico Bona
In recent years, the number of recreational vehicle manufacturers being acquired by other brands has accelerated sharply. The result is that there are basically now only few groups that have remained independent in Europe. One of these is the German brand Carthago, which has focused solely on producing motorhomes and has long been experiencing double-digit growth. Today, the company has two production plants, one in Germany and one in Slovenia, and also operates under the Malibu brand, created first to satisfy the demand in the campervan segment before expanding into the coachbuilt and integral sectors. In each market segment, the goal is to have a “best in class” offer. With this philosophy, the Carthago group has achieved success and is preparing to expand its presence in new markets with the Malibu brand. The company was founded in 1979 by Karl-Heinz Schuler, who started by offering tailor-made outfits for vans. Today Carthago is still an owner-run company and employs around 1,400 people. By comparison, to give an idea of the speed that Carthago is growing, in 2016 there were 900 employees. At the Aulendorf headquarters, where the Carthago City complex is located (R&D, production, sales, and service), we met Bernd Wuschack, Carthago CEO.
Aboutcamp BtoB: In a market that has changed radically within a few years, Carthago has remained completely independent. How have you done this?
Bernd Wuschack: I think the most important element is having an owner who lives this business daily. He does it with passion and he is still directly involved in the company. The second point is linked to the fact that we are focused on a particular market segment, the one called “premium”, and we try in each of our product families to be the “best in class”. This allows us to devote ourselves completely to the development of high-end products, avoiding distractions. We are market leaders in integrals with a range that starts at €85,000 and this is our core business. I think it is very important to focus so clearly on one segment.
Aboutcamp BtoB: What do you think about the concentration of the market? Do you think being independent is an advantage or could it become a problem in the medium term?
Bernd Wuschack: There are two sides of the coin. On the one hand, maintaining this positioning allows us to focus on the detailed development process; on the other hand, we obviously run the risk of being a smaller company surrounded by giants, and this entails some disadvantages, for example in purchasing power. However, we are convinced that maintaining this premium positioning allows us to grasp all the potential more than larger groups that operate in each market segment can do. This is where our strength is.
Aboutcamp BtoB: Carthago is concentrated in the upper part of the market, but despite this you have nine product lines. How do you differentiate them?
Bernd Wuschack: We are specialists. Carthago is the only manufacturer to offer the same internal layout on three different chassis. Our customers can choose between Fiat, Mercedes or Iveco, the latter available with one or two axles. Thanks to this, we can reach a large number of customers: we offer them many choices. Each of them has their own tastes and expectations, and we are able to satisfy them perfectly.
Aboutcamp BtoB: Speaking about engines, how do you see the future of diesel? Do you think there are alternatives?
Bernd Wuschack: The biggest problem right now is the confusion. In my opinion there is currently no alternative to diesel in our market. Electricity is not the solution as on one hand there are waiting times for recharging and on the other hand the distances usually covered by a motorhome are too big. In addition, there is the issue of the space occupied by this technology on the frame. All these things, in my opinion, lead to the conclusion that there are no alternatives in the coming years. There is a lot of buzz about electric, with a company that even claims to have a product of this type ready, but the reality is that it is only a show solution. It is okay to talk about it, but it generates confusion. For our customers, this theme is almost non-existent: sometimes we talk about the electric Ducato, but when range limits and costs emerge, they always choose diesel without any doubts. And we also have to consider that the latest Euro 6 regulations has reduced pollution by 93 percent.
Aboutcamp BtoB: What are the characteristics that distinguish your entry level product from the rest of the range? Are they just differences in chassis or also in materials and/or production processes?
Bernd Wuschack: In all our product families, from the smallest to the largest, we adopt the same philosophy, which we call “DNA Carthago”. There is no difference. We obviously have smaller vehicles, such as the c-compactline series, which satisfies the need to remain under 3.5 tonnes for those customers who do not have a license for heavier vehicles. In all cases, however, we use the same materials and the same construction techniques. And that’s why we can’t go below a certain price level. To make cheaper motorhomes, we would have to question the philosophy behind our brand, and we absolutely don’t want to.
Aboutcamp BtoB: Let’s talk about numbers. How do you view the fact that the German market continues to grow despite the economy slowdown?
Bernd Wuschack: I think there are different reasons. One is certainly linked to the normal demographic development. The average age of our customers is quite high. These are people who have finished their career, are now retired and have money available. The second element is related to how these people prefer to spend their money. Given that the interest paid by the banks is zero, and that there are very few alternatives to obtain an adequate remuneration, they choose to invest in something rewarding, something that is in front of their door to be able to say “Here is where my money is!”. In the end, it is an important motivation, which guarantees total independence when taking a holiday. Today traveling in Europe is, for political and commercial reasons, a very popular choice.
Aboutcamp BtoB: What are your main markets and where do you expect to grow more?
Bernd Wuschack: Germany is our domestic market, but we are also doing well in the Scandinavian countries where the industry has slowed down a bit, but where the passion is still very strong. We also expect to grow in markets where the spending capacity is on average lower: there are customers with good spending power even there, and we just have to convince them to choose us. In general, we see good development in the lower segments of the market and I think this will end up creating our customers of tomorrow when they look for more comfort in their vehicle.
Aboutcamp BtoB: On average, the competition level has risen, and technical solutions that were once your own assets are now being used by many other companies. How do you plan to differentiate yourself?
Bernd Wuschack: First of all, we want to stay focused on the product quality. Any change must lead to superior quality. We could produce cheaper Carthago, but we don’t want to. Our goal is to maintain or improve the levels that we have achieved both in materials and in assembly. The second aspect is that we want to stay as close as possible to our customers, listening to their requests and always trying to offer them the best possible user experience. This is why we focus on the details, as opposed to more generalist competitors who don’t. This is an important advantage for us. After all, having R&D exclusively within Carthago means being able to freely create solutions, products and user experiences. The result is that Carthago is different, Carthago has personality. Karl-Heinz Schuler, our founder, likes to say that Carthago products have a soul and therefore are not comparable with others: they have a particular personality, they are very “emotional”.
Aboutcamp BtoB: How many vehicles did you build in 2019 and how many do you plan to produce in the future?
Bernd Wuschack: In total, for the Carthago and Malibu brands we have built around 5,500 vehicles. Within the next three years, our goal is to build 7,500. We have some ideas on how to do it. One of the first steps will be to announce a new generation of Malibu motorhomes for the next season.
Aboutcamp BtoB: You are not present in all European countries, or at least not with the complete range of vehicles. What development plans do you have?
Bernd Wuschack: Our main goal is to cover the entire market, but this depends on our production capacity, which has so far been limited. We have two plants and a few bottlenecks. We have not been able to grow production hand in hand with market demands and this has led us to make the decision to expand our production and sales capacity. The next step will be to offer our Malibu motorhomes on the Italian market.
Aboutcamp BtoB: A few years ago this brand was separated, enriching it with products other than campervans. Why did you make this choice?
Bernd Wuschack: Of course, our goal is to grow, but in order to do this it is essential that this path is healthy and sustainable. This was one of the most important considerations we took to arrive at this decision. But if you look at the dawn of our business, you see how Malibu was the beginning of our history: today it is only a new business, but not a new brand. The basic idea is that in the premium segment, we can continue to grow, but only in small steps. In the over €85,000 integral area we already have a 35 percent market share. Having decided that Carthago should remain focused in this segment, we have made the Malibu brand independent. We can thus take advantage of all Carthago synergies and know-how by positioning the products on a lower price level – from seven to 10,000 Euros less – while maintaining the same approach and the same build quality. The second important reason is that the camper van market is growing very fast, and our story started right there. In the end, we have two brands that share the same philosophy: to be the best in their category.
Aboutcamp BtoB: What do you think will be the impact of the Covid-19 pandemic on the European RV market and what can be the possible scenarios from now until a vaccine is made available?
Bernd Wuschack: Despite the certainly huge impact of this crisis, we are still expecting a positive future development. The crucial question is, of course, how long it takes for the market to recover and, if possible, to return to a “normal” level. For the German market we assume a so-called “V” scenario: this means that after a steep decline and a very short dry spell, we will soon be uphill and into recovery – that’s exactly the situation that we see right now after the reopening of the dealer places. For the European export markets, we expect a different development and see more of a “U” scenario. Means the bottom after the decline will be more pronounced until the increase occurs again. Nevertheless, at the end of both scenarios, we are expecting a positive market potential for our vacation form and our industry. Furthermore we assume that the “individual vacation” will be even more trendy instead of mass tourism.