Victorian caravan maker Essential Caravans enters voluntary administration - ABC News & Headlines – Australian Broadcasting Corporation

Essential Caravans closed its factory in Melbourne's north as part of a restructure. (ABC News)

Victorian caravan manufacturer Essential Caravans has entered voluntary administration, joining a string of caravan companies to have collapsed amid financial pressure in recent years.

The company had also closed a factory in Melbourne's outer north as part of a restructure before it was placed in administration.

Essential Caravans intends for all current orders to be filled, as administrators and managers review caravan builds and delivery schedules.

Victorian caravan manufacturer Essential Caravans has entered voluntary administration, with at least 80 jobs lost in a restructure before administrators were called in.

The Melbourne-based business appointed administrators on October 21, joining a string of Australian caravan manufacturers to have collapsed within recent months.

It followed a restructure that saw the company close its factory in Somerton, in Melbourne's outer north, and consolidate operations with its sister company, Design RV, in Pakenham.

Jamie Johnson, the director of both companies, said economic conditions could not sustain two Melbourne-based factories.

Essential Caravans director Jamie Johnson said it was a sad day for the company. (ABC News: Kyle Harley)

"I had to make some very hard decisions to make sure that we stabilised the other parts of the business by going into importing ... and lowering the cost by moving to one facility," he told the ABC on Wednesday.

"It is a sad day, but to think that it's not going to continue on the trend that it's continuing on now is naive.

A spokesperson for Essential Caravans said 92 employees were directly affected by the closure of the Somerton factory, of which 12 workers chose to transition to roles at the Pakenham facility.

Dozens of other regular contractors lost work due to the collapse.

They said the company intended to fulfil all current orders, and that administrators were reviewing current builds and delivery schedules to minimise disruption to buyers and dealership partners.

Mr Johnson said he intended to continue trading Essential Caravans and sell imported Chinese vans after entering into a deed of company arrangement to restructure the business.

He said he was "fully committed" to ensuring customers who paid deposits were not affected by the administration process.

"There's no customer that won't get their van that's on order," Mr Johnson said.

"There's no customer that's got a van in for warranty with us currently that won't get their van back."

The company has manufactured more than 5,000 caravans since 2015. (ABC News)

He said it was too early to determine how much money creditors were owed, an issue he said was "in the hands of administrators".

Mr Johnson said the two Victorian factories were producing a third of the caravans they were once capable of making, and the volume was insufficient to maintain both sites.

Essential Caravans has built more than 5,000 caravans since 2015, according to its website, and moved into its Somerton factory in 2021.

More than 90 per cent of Australia's caravans and RVs are produced in Victoria, according to Caravan Industry Victoria (CIV).

CIV's latest State of the Industry Statement said the Australian caravanning industry was navigating one of the most significant periods of economic and structural change in recent years. 

More Australian businesses were entering administration or ceasing to trade, while international imports were up 16 per cent from the previous year.

Essential Caravans's membership with CIV is on hold as a result of the administration process.

"While it is not appropriate to comment on individual circumstances, Caravan Industry Victoria continues to support a strong, sustainable and resilient industry and will work with members as they navigate evolving market conditions," CIV CEO Daniel Sahlberg said.

"Our focus remains on supporting consumers, exhibitors, manufacturers, dealers and industry stakeholders, while respecting the administration process."

Mr Johnson previously brokered a deal to purchase Zone RV, a Queensland-based luxury caravan manufacturer, after it collapsed owing $42 million in December.

On its website, Zone RV emphasised that its new parent company, Adventure Zone RV, was a separate company to Essential Caravans and that the company’s administration did not change its plans.

Essential Caravans bought collapsed caravan company Zone RV earlier this year. (ABC Sunshine Coast: Josh Dye)

Mr Johnson is not a director of Zone RV, but said his family was involved in the company.

“It operates in a different market segment which seems to be largely unaffected by the current economic climate, unlike that sub-$120,000 sector, which has been heavily affected,” he said.

Design RV last week posted a statement saying it was also unaffected by the Essential Caravans administration.