Face to face with Stuart Lamont, CEO of the Caravan Industry Association of Australia: the organisation’s vision is, “To lead and champion a robust, compliant and sustainable caravanning and camping industry in Australia”.
Words Antonio Mazzucchelli
Stuart Lamont has since November 2011 been the Chief Executive Officer of the Caravan Industry Association of Australia, having been with the organisation since June 2007. In his current position as CEO, he has successfully increased the profile of the sector through participation in various Government and tourism activities as well as working groups at a Federal level. Stuart has regular dealings with Federal cabinet ministers and this brings the opportunity to champion concerns on behalf of the industry.
Caravan Industry Association of Australia is the peak national body for the caravanning and camping industry in Australia. The organisation’s vision is, “To lead and champion a robust, compliant and sustainable caravanning and camping industry in Australia”, with all operation pillars – marketing; research; lobbying and advocacy; compliance, accreditation and training – working towards this vision. Caravan Industry Association of Australia operates as a not-for-profit organisation with a membership base comprising the individual state caravanning and camping associations, who the association works collaboratively with on matters concerning the caravanning and camping industry in Australia. As the peak national body for the Australian caravanning and camping industry, Caravan Industry Association of Australia represents over 3,500 businesses across the entire supply chain. Many of these industry businesses financially support the organisation by making a voluntary contribution towards a cooperative fund that aims to support the sustainability of the greater industry. In addition, the association communicates regularly with consumers who have an interest in the caravanning and camping lifestyle, through an active database of nearly 400,000 consumers supported via social media channels of over 180,000 participants.
Aboutcamp BtoB: How is the Australian RV market going at the moment, and what are your forecasts for the next few years?
Stuart Lamont: Our tourism visitor numbers are at record levels, although while we are reporting highs in manufacturing and imported numbers, this is masked by a number of macro pressures which are likely to see an upcoming correction in the market. A recent Royal Commission into financial services has tightened both consumer and business finance, and this coupled with a softening in housing prices off record highs has caused general nervousness in the economy. In Australia in recent years there has been a strong push for housing investment boosted by tax incentives, interest only loans, booming house valuations, and loose lending practices. This has seen many individuals with multiple properties develop mortgage stress with limited capacity to re-finance (or to add an RV through excess equity in property). A Federal election due in May 2019, has also seen some postponement of discretionary spending as tax reforms, potential variations to childcare and pensions, superannuation uncertainty, and a likely change of Government all weighing heavily on the market, particularly in our two biggest markets – the families and those either in or approaching retirement. For those people still in market we are seeing some substitution into used product or lower priced product as well as the emergence of new sharing business models. Add to this an already saturated number of manufacturers supplying unsustainable volumes of new product into the market, and we are starting to see some liquidations and closures in market – not unexpected. With cashflow already tight, we are in a discounting cycle causing margins to be squeezed. While we see this as being cyclical there will be some pressures in market in the short-term before returning to growth. During this period we are seeing increased promotion, money spent on research and development and the introduction of new technology, and I expect that those company’s investing now in these areas will see strong benefits when the market rebounds. With an increased focus on industry compliance, increased scrutiny with tougher consumer laws, and natural consolidation or attrition, manufacturers committed to the market will see a return to strong margins in the coming years. Fewer manufacturers / importers supplying larger volumes to market is what I expect. We remain however very buoyant to the potential in market with per capita ownership per 1000 people still well below what we see in the US. In the past two years we have seen desirability towards owning product from our industry increase from 27% to 33% of the population. Our challenge remains in turning this desirability into transactional activity.
Aboutcamp BtoB: How is the mix of camping tourists from outside Australia made up?
Stuart Lamont: A total of 385,000 international visitors went caravan and camping around Australia at Y/E September 2018. Europe represents the most important market with 16% of visitors originating from the UK, 15% from Germany and 8% from France. The USA (8%) and New Zealand (7%) round off the top five caravan and camping markets.
Aboutcamp BtoB: What are the regulations for driving licenses in relation to driving motorhomes or towing caravans in Australia? Up to what size and weight of motorhome can you drive with the standard driving license? Is it difficult to obtain a driving license for big motorhomes?
Stuart Lamont: Broadly speaking, as each state may have slightly different interpretations, any car with a single trailer under 4.5 tonne (GVM) does not require a heavy vehicle license to tow a caravan. This also applies to motorhomes and campervans. As such, a standard non-provision car license held for at least 12 months is suitable. If a motorhome or a vehicle combined with a single trailer is between 4.5 tonnes and no more than 8 tonnes (GVM), which would only be a small volume, then a light rigid license would be required in addition to a standard non-provision car license held for at least 12 months.
Aboutcamp BtoB: What are the main problems afflicting the RV sector?
Stuart Lamont: The main problems are industry businesses not respecting the consumer and legislative rules which exist, and having low compliance models competing heavily with long term industry players. This is causing pressure on markets, and risks consumer confidence and industry reputation at a time where macro economics and politics are prominent throughout the media. But the noose is tightening and the industry (major players and associations) are more determined than ever to “clean up the industry” and developing specific strategies to do so. The purchase of a RV can be a consumers second or third largest purchase in their lifetime and one which has a large amount of emotional attachment to it. When things go wrong, industry behaviour needs to improve with the relationship between the repairer, retailer, manufacturer and supplier needing some work to better service the consumer.
Aboutcamp BtoB: What is ‘the future leaders project’? Why did you develop it, and what results do you expect to achieve?
Stuart Lamont: Several years ago we identified that many of the industry future strategies were being determined by individuals who had extensive history in the industry, but failed to take into account new demographic thinking. We also saw limited youth pushing into managerial or association boards around the country. To support these up and coming leaders we have provided a forum for exchange of information, a series of networking events (including an annual one day event leading into the National Conference), and an annual award with a $10,000 professional development prize. What we have seen is increased confidence in these individuals with several now appearing on state association boards and councils. It has also generated a new enthusiasm for association events (and in particular the National Conference) with new energy, and new thinking challenging the existing norm.
Aboutcamp BtoB: What will be the highlights of the forthcoming National Caravan Conference, and why is it so successful?
Stuart Lamont: The industry conference (May 15-17 2019) brings together over 700 senior industry personnel from all sectors of the industry. As an industry we are all reliant on the success of each individual sector, and it is important that we bring the decision makers of the industry together on an annual basis. The event will showcase best practice both from within the industry and outside, the release of new research including an analysis of what is driving consumer behavior, a focus on changes to regulation and consumer laws, and expert sessions in marketing, social media, lean manufacturing and retailing. In addition we will continue with provocative workshop sessions, networking events, and three evening social functions culminating in the industry night of nights – a glittering Gala Dinner.
Aboutcamp BtoB: Which was the most effective marketing and PR promotion action in the RV sector in 2018?
Stuart Lamont: As an industry for many years we have pooled money together and reinvested this mirroring the Go RV’ing campaign from the US. While television advertising remains expensive, we have been very effective at getting national television in high rating periods (for our core markets) through great lifestyle product being supported by television ambassadors. This has included concentration on breakfast light commercial television where we have been successful at getting extended showcasing of our industry product. That being said, one of our most effective marketing and PR promotions in 2018 was a two week nationwide newspaper promotion linking a competition with a prize pool of approximately $250,000, promoted in over 2,500 point of sale locations around the country, linked with editorial, full page advertisements, and masthead advertising on every front page across 22 major metro and regional newspapers. This generated over $3 million worth of media coverage for a $40,000 association cost, producing nearly 500,000 entries with an opt-in database for all contributing partners of nearly 50,000 consumers.
Aboutcamp BtoB: The New Road Vehicle Standards Act in Australia has been welcomed by you enthusiastically. It not only guarantees safer products to users, but makes imports more difficult for non-Australian manufacturers. Is there a real danger of low-cost, low quality leisure vehicles being imported from Asian countries?
Stuart Lamont: There is no room for non-compliant product (against agreed Australian Design Rules, and Australian Standards for matters such as gas, plumbing and electrical). I have little sympathy for any manufacturer / importer who tries to supply product into the Australian market which does not meet the minimum standards.
The RVSA provides additional compliance governance, but importantly provides a very strong set of penalties available to the Australian Government. This includes not only fines and recall notices, but at the very beginning of the penalty spectrum, the removal of approval to supply to market. This will have the effect of product not being able to be registered onto the road. This is a good thing for manufacturers / importers committed to doing the right thing by their customer base, as well as consumers who can have greater confidence in dealing with our industry. At present a light touch regulatory framework exists meaning some low cost, low quality vehicles are able to enter the market. We continue to build our relationship with the Australian Government providing information regarding non-compliances coupled with increased resources to look for compliance breaches in market, and come December 2019 when the new regulations formally come into existence, we will have an expectation of regulatory adherence, and will be very aggressive towards the regulator to ensure that their enforcement powers are carried out. Industry businesses trying to do the right thing deserve equal trading conditions, and we will do everything within our power to stop any product (or group of products) getting onto the road which have non-compliance issues. Manufacturers and importers are on notice and should be ready for this.
Aboutcamp BtoB: Everyone says China will be the second largest RV market in the world. Do you think this can happen in a short time? What is you opinion?
Stuart Lamont: Not sure what you mean by being the second largest RV market in the world – for consumption or manufacturing? There are certainly opportunity within the Chinese market based on population, however given their limited history in the sector it is not culturally ingrained relative to say the European, United States or Australian markets, nor do they have the infrastructure to attract RV consumers (yet). I think it is a market to watch and is a fantastic export opportunity. That being said I see it being heavily weighted towards drive product rather than towed product as per other Asian markets and will take some time to mature. As to manufacturing, we are already seeing some volume being manufactured however the challenges associated with consistency of supply, and managing destination compliance will continue to stunt Chinese growth. With regard to Chinese tourist and how they travel – the market is of incredible importance to Australia’s tourism economy, with the segment generating $11.5 billion to the country for y/e September 2018 – of which $51 million was generated in the caravan and camping sector by the market. At present, they are the 10th largest international segment who go caravan and camping in Australia, growing 21% from 2017 (off a very small base) with 122,000 visitors. Australia is not a new market for the Chinese, however caravan and camping is, and as such, we are seeing increased demand from Chinese travellers renting out a motorhome or staying in a cabin. Challenges remain though in growing the market which includes communication and language barriers; concerns over road safety and conditions of Australian roads for a segment who may not be used to driving long distances; and product readiness to meet the high expectations of the Chinese visitor. The key focus on growing the Chinese market is to encourage dispersal them away from the urban centres and iconic products to experience the ‘real’ Australia.
Aboutcamp BtoB: What are the main characteristics that distinguish a product made in Australia compared to others, for example imported from USA or Europe?
Stuart Lamont: I think each of the markets are uniquely different although trends tend to be quickly adopted and embraced based on suppliers pushing product into a global market. The product differences therefore tend to represent how the product is used in each market. With Australians looking to adventure and getting off the beaten track, the look of our product appears more “sturdy” and “tougher” with dark exterior colours and checkerplating becoming more prevalent, and appealing to the Australian pysche, while many features encourage an outdoor lifestyle around the caravan rather than necessary contained within it. Road corrugation and 4WD’ing also means that some caravans in Australia are “harshly treated” and therefore must stand up to this usage by consumers. Manufacturers are aware of this and cater accordingly.