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Can Conrad Survive?
Editorial May 2004

Conrad is one of the best mass producers of construction models in the market today and has held this position for a number of years.  At the recent Nuremberg Toy Fair the CC8800 model won a coveted award for innovation.  Based in Germany they have consistently produced quality models, particularly cranes and trucks as well as a variety of other construction equipment such as excavators and concrete pumps.

So why the question, can Conrad survive?  It is simply that competition is hotting up and there is an increasing threat to Conrad's livelihood.  The main pressure is coming from the low wage economy in China which means that many more man hours can be spent on each model for the same money compared to the relatively expensive German labour market.  Conrad advertises proudly that its models are made in Germany and this has been reflected in the quality of the models.  But if other makers can produce equal or better quality for the same or less money where will the Original Equipment Manufacturers (OEMs) go to have their models made and what would collectors rather buy?

Let us look at recent history.

NZG has stopped all production in Germany and now has its models made in China or Eastern Europe.  The quality of the models has not suffered.  In fact Cranes Etc reviews consistently score their new releases highly for both detail and finish.  Also bear in mind that we may see some further improvements as China learns and perfects its skills.

The OEMs are choosing to have their models made in the new economies.  Volvo models are produced by MotorArt whereas previously Conrad produced for them.  Liebherr has given recent commissions to both Brami and NZG and the resulting models are very good.  Demag have models made by NZG.  Grove models are being produced by NZG with their largest crane model to date, the GMK 7450, being produced in China.  Future Grove and Potain models will be coming from Asia, as will the new Bauer model.

So what's the future for Conrad?  There is obvious loyalty towards Conrad from some of the German OEMs particularly.  Liebherr provides a lot of commissions as does Mercedes and MAN.  Also if you want something modelled and you want it done right then traditionally Conrad was the place to go.  Indeed their reputation is first class on some models - so far it is hard to imagine anyone other than Conrad doing a CC8800 or LR1750.  The question is how long will it be before a big diecast model is commissioned in Asia - a Manitowoc for example?

Can Conrad survive?  Well it's certainly got some tough competition and it is getting tougher.  It will continue to focus on models that others cannot do, but for how long can it continue without shifting some of its production to Asia to reduce its labour costs?  If it does not make its plans or take tough decisions, it may be too late.

Cranes Etc