This month the Caravan Industry Association of Australia (CIAA) discusses the uncertainty the Australian caravanning sector faces due to global political factors.
The winds of change are sweeping through the global manufacturing sector, and while our industry remains resilient post-COVID, global dynamics are reshaping the way we do business. With cost-of-living pressures biting at home and geopolitical tensions stirring abroad, it’s clear that caravanners and manufacturers alike must navigate an evolving landscape. From trade policy shifts to supply chain uncertainties, these challenges demand our attention — and action — more than ever before.
The elephant in the cabin is of course recent global elections which have resulted in extremely inward-facing policies and a focus on “home-grown issues”. Irrespective of individuals’ political beliefs, no one can say these issues aren’t changing the status quo. For example, the United States looks set to have a suite of looming protectionist ‘America-first’ policies, which may seem to increase the popularity of the United States government at home but leaves significant uncertainty for the rest of the world, including Australia.
So, where do we think this leaves us and how will this new age of global trade impact the industry’s supply chains and access to new caravans? Well, in short, no one knows yet — but the longer answer leaves more questions than answers. The global market has already expressed a split in opinions with some investors expressing optimism, and other pundits reflecting on the international ramifications left by the historic track record of similar international settings.
One country closely following international developments will be China, which is by far the most likely country to be hit with tariffs from major western economies. All of this is to say, Chinese manufacturers and suppliers will be keen to diversify their target markets, and Australia is high on its list. Let’s assume Australia will not impose tariffs on China (there has been no indication that the Australian Government is considering such measures, and which would jeopardise important local export trade for which there has been extensive recent work by the Government to remove existing trade impediments). Even so, it’s likely there will be a surplus of Chinese products, allowing for cheaper componentry and finished imported goods. While this may drive down the cost for manufacturers through their supply chain, it will also make them have to fight even harder to preserve a strong sovereign manufacturing base faced with increased competition from potentially cheaper completed goods. The fact that we have so many great quality manufacturers who, for many years have been providing the most robust constructed RVs in the world specifically designed for Australian consumers and the way our audience likes to use their product, is a competitive advantage you would expect our local businesses to strongly promote.
The most realistic scenario of disruption to global trading markets through tariffs and restrictions would be what all governments globally, including the United States and Chinese governments, have been saying since the start of 2020. International economic conditions have created challenging times for the global economy, with the Euro Zone, the US and Canada all reporting increases in inflation; with new US tariffs expected to further exacerbate these impacts, in turn increasing focus on local cost of living and borrowing costs.
We understand the uncertainty the Australian caravanning sector faces caused by global political factors, and we’re committed to ensuring that all disruption to the sector and those who enjoy it are mitigated as best as we are able. Although this space continues to evolve constantly, we have confidence that our industry will continue to shine and provide great times and value for consumers, and a stable source of employment for many Australians.
Stuart Lamont
Chief Executive Officer
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