15 December 2022
15 December 2022, Comments Comments Off on M. Kern, B. Wuschack – Carthago
M. Kern, B. Wuschack - Carthago

How to deal with change

Markus Kern and Bernd Wuschack have the task of managing the current complex situation and guiding the Carthago group towards gradual change

Words Antonio Mazzucchelli photo Enrico Bona

Will Carthago be able to maintain its leading position in the premium segment of the European market, despite the supply chain crisis? And what role will the Malibu brand play at a time of great change also in the camper van segment? We discussed this with CEO Markus Kern and Bernd Wuschack, managing director of the Carthago group.

Aboutcamp BtoB: What factors led Carthago to decide to reorganise its top management, and what consequences will this have on its corporate governance?
Markus Kern: The decision was not a sudden one. It came after I’d been at Carthago for six years. I always worked closely with Mr. Schuler and we discussed all things – from the sales department or the R&D department. We discussed everything together. Mr. Schuler said he wanted to step back a little bit and make sure that Mr. Wuschack, Mr. Fetscher, Mr. Stumpp and myself were in the executive four. We made that decision in the middle of 2021.

Aboutcamp BtoB: When did you take this role?
Markus Kern: I took over the role as CEO of the Carthago group in the fourth quarter last year. In general my understanding of managing the company is that we are a team and Mr. Schuler is the owner. He is absolutely an R&D man, and he likes to develop products. Now, at his age, he prefers not to be involved with areas like human resources, sales or other operational topics. He likes to be creative on our products. When he is involved with design challenges, he can focus on this and find a solution. We’d like to have a great Carthago group and a long term strategy. We have our headquarters in Aulendorf, and we made the decision together that we need a new production in Slovenia.

Aboutcamp BtoB: What is your background? But you already were in the company so…
Markus Kern: I have already been at Carthago for six years and I am a board member. I work very closely with my colleagues, very close, and we always discuss things together.

Aboutcamp BtoB: How much has the lack of supply of chassis, that has affected the whole market in recent months, impacted your business?
Bernd Wuschack: We had a slightly different strategy to everyone else because we decided our first goal was to take every possible chassis to build a motorhome on. The dealers needed to replace the earnings lost from the reduced amounts, and us too. In Germany, for example, the market in the last 12 months was going down by 15%, and we were going down 23%. That’s very important for us, so the reduction of the motorhomes, the half integrated and integrated ones, was much less than the average of the market, but the reduction we had on camper vans was where we had the biggest lack of chassis so we lost 1/3 of our production and we now have to catch up again. We were limited on our production line for the camper vans, and we had no information, that was our biggest problem. We had ordered the amounts we needed and then after the Caravan Salon in Düsseldorf came the information that we might not get all these numbers we ordered. There was no clear plan, and every month several hundred chassis were missing until now, and the end result is that we got much less than we ordered.

Aboutcamp BtoB: How did you change your production, or did you solve the problem by working with other brands, and other chassis?
Bernd Wuschack: It’s not so easy to change production because we are in a special segment concerning the weights. Another issue is flexibility, as we need the caps for the AL-KO low frames because of the total weight and for that there are not so many basic vehicles that are suitable. In our size of company, we need the synergy with the chassis, and the Stellantis Fiat Ducato is really excellent and suits our needs. There is also the Mercedes chassis, and, of course, we are talking about the possibility of using that in future but we especially know the situation also consider the situation that we need a possibility for our motorhomes and also for the vans. Many manufacturers have a solution, for example, for half integrated vehicles for 3.5 tonnes, no problem, or especially for a van, also no problem, but we are in between and for that it’s a little bit more complex.

Aboutcamp BtoB: Did you change not only the production class but also the way in which you manufacture? Did you just stop production, or did you find other solutions?
Markus Kern: We had several stops of our production lines in Germany and also in Slovenia, because we did not get any chassis. I can’t remember how many weeks we closed production, but it was significant. We handled it very carefully and stayed flexible so every week we decided what we are doing in the following two weeks, every week. We couldn’t plan the next quarter, so we tried to do the best we could every week – the best we could do at that moment. It was not plannable, we lost productivity but we wanted to make sure that our customers or dealers got at as much as possible. And the second thing was that before this lack of basic vehicles, we were really at the limit of our capacity so we changed things. The plant in Slovenia is not as it was, we changed it totally and we started to build a new plant in Slovenia especially for camper vans. That is the important change, so in the future, we will have the existing plant for the production of motorhomes only. There we have changed lots of things to be more efficient in the future as now, for example we optimized the whole logistics systems. Additionally we will have another plant for camper vans only so we have much more possibilities in future to be flexible and to have enough capacity if the growth is starting again.

Aboutcamp BtoB: Do you know when these changes will happen?
Markus Kern: We are very close. We started building this plant almost 40 km south from our other plant. The factory should start production at least in the end of the second quarter next year. And, as Mr. Wuschack said, we will only produce camper vans there, our Malibu camper vans. The next thing is that we rebuilt Odranci plant in Slovenia, it was a complete restructuring with two production lines: the motorhome and the camper van. It was an effort, and a one and a half year project. It’s totally changed and it took a lot of money because we lost productivity too.

Aboutcamp BtoB: So your suppliers also had to change everything, and reconfigure their logistics?
Bernd Wuschack: Yes, that’s right, but we see the possibility for the future, although at this moment it’s very tough because all the things are coming together at the same time.

Aboutcamp BtoB: Will the increase in the price of materials, components and mechanics have a negative impact on your sales, or do you think that this won’t be a problem in the premium market segment?
Bernd Wuschack: We are convinced that it will have an impact, but in the premium segment perhaps it’s a little bit less than in the entry-level or in the mainstream; but there are two big issues at the moment, one is delivery times and the other is pricing. For both things, all we can say to customers is, “Dear customer, we can’t promise you anything,”. This is the biggest challenge at the moment. We also have the experience of our dealers, when there is a customer looking for a vehicle and the dealer can’t say, “ok, look and take it, and this is the price,”.
When it comes to the delivery time and pricing, some customers say :”ok, we have to think about it, let’s see what’s going on until then.” I’m sure it has an impact in their behavior. The situation is that people will still wait, but it’s the insecurity that’s the biggest thing and it’s not only our brands. That’s the next point: nobody knows what’s coming up with the war in Ukraine, inflation, etc, in the next short or middle term. I think there is much potential in the future, we are sure that having a vacation on four wheels is still a good trend. Will demand decrease now or stabilize? We hope it gets stabilized and then see a small increase. The question is when will delivery of chassis increase again? That’s the most important question you could answer at this moment. Nobody knows the answer.

Aboutcamp BtoB: For your market positioning, you are constantly developing your products without being revolutionary: do you plan any radical innovations for the future?
Bernd Wuschack: We have to satisfy the customers who have ordered a motorhome from our company. That is our first goal, and this will continue for the next one and a half years. Therefore, we decided not to make any big evolution or changes, and we are convinced that this is the right decision. Of course, in the future, we will have challenges, e-mobility or whatever, this will be a dramatic change in the development of the dimensions and the weight. For a long-term future we have to think about this, of course, and the next new things we will present in the model year 2025. To make an impact on the market, of course we have ideas, and they are developed, but at this moment it makes no sense for us. That’s our strategy: to keep changes to a minimum so the price of the model they bought is stable. That was the old strategy of Carthago and Malibu and it works very well for our customers and we are satisfied with that strategy and situation.

Aboutcamp BtoB: You have camper vans only on the Malibu brand at the moment; will we ever see a Carthago branded camper van in the future? And also are you planning to take on the urban vehicle minivan segment as well?
Bernd Wuschack: At this moment it makes no sense for us, because of our DNA’s personality. It has a personal design language and let’s describe it very simply – the smaller a car is, the less you can do in terms of individualization and personalization, etc, so I think it’s not our main segment. We couldn’t be successful at least with this strategy, because these vehicles are not our focus at the moment.
Markus Kern: We are following the premium strategy as our core business and we are focusing it very strictly. For that reason we want to be Carthago as in its own style. At least we are quite a lot smaller than other competitors, but on the other hand we are premium, with a high-quality product and a more individual profile.
Bernd Wuschack: We have a clear focus and this is one of the reasons for our success, and you can’t do everything with this philosophy. At this moment, this strategy is the right one for us, but we know also that we have to think about it in future, and the big picture is changing. In the end, this is more a question of the sales strategy behind the product because the Malibu van today is the absolute premium van segment, not an individual segment but the premium segment of the serial produced vehicles, so it’s more a question which dealers are handling this product, the Carthago dealer network or the Malibu one? We see the advantage in the Malibu dealer network because they are focused on the van business. Carthago dealers are successful in selling the motorhomes, the van sometimes is a secondary business and this is not the best solution in the end. Malibu dealers are doing their business as good as the Carthago dealers. So at this moment, we are very happy with the Malibu brand even on the Malibu premium vans.

Aboutcamp BtoB: What is your positioning in the European markets today, and which are the most important markets for you? Do you see any growth opportunities in markets where you are currently under-performing or not present that you can do better?
Markus Kern: Right now, we can’t answer that very clearly because the market shares are not clear enough, depending on the chassis supply, but at least in our premium market, we are market leader and we want to keep that position.