Neustadt bei Coburg is set to lose a long-established toy manufacturer on December 31, 2026. Rolly Toys is ceasing production at its Upper Franconian headquarters following a failed restructuring effort. The move was triggered by the loss of the company’s second-largest customer, high energy, material, and procurement costs, competition from China, and US tariffs. Ultimately, rescue efforts failed because no investor was willing to continue manufacturing at the German site. As a result, 113 employees will lose their jobs; many of them are between the ages of 50 and 62. While the brand may survive, production is likely to shift to a different location.
Search for investor for toy manufacturer Rolly Toys ends without rescue
The company filed for debtor-in-possession insolvency in February 2026. Consequently, management and restructuring experts sought an investor while operations continued. Several interested parties examined a potential takeover, but none were willing to continue production in Neustadt. Two companies are continuing negotiations regarding the brand and manufacturing at a different location.
Image: Shutterstock
Managing Director Frank Schneider confirmed the closure of the plant in no uncertain terms. “Production in Neustadt cannot be saved. This means a piece of toy history is being lost,” he told the Fränkischer Tag newspaper. Management also plans to offer a bonus to employees who stay until the final day of production. However, finding new employment will be particularly challenging for many older staff members.
High costs and loss of customers exacerbate the crisis
The loss of its second-largest customer in 2025 dealt a severe blow to Rolly Toys. At the same time, the costs of energy, materials, and procurement rose sharply following the outbreak of the war in Ukraine. The company was unable to fully offset these additional costs through higher sales prices. Furthermore, competition from Chinese rivals and new US tariffs weighed on the business.
While potential buyers showed interest in the products and brand rights, they were not interested in the manufacturing operations in Upper Franconia. According to the company, high production costs at the German site deterred investors. Consequently, a future buyer might manufacture the children’s vehicles outside Germany. For Neustadt, this spells the definitive end of industrial production, even if the brand itself is sold.
Production in Neustadt Ends After 88 Years
Franz and Rosa Schneider founded the company in the Coburg region in 1938. From 1966 onwards, the firm also manufactured the pedal tractors for which it later became known. Most recently, around 250,000 children’s vehicles were produced annually across a facility spanning approximately 36,000 square meters. As recently as January 2026, the manufacturer exhibited at the 75th Nuremberg International Toy Fair.
The Rolly Toys brand could potentially continue after the factory closure. However, a sale would not alter the termination notices already issued to the 113 employees. At the same time, the Coburg region—with its long-standing toy-making tradition—is losing another manufacturing plant. Consequently, the family business’s history at its original location is coming to an end after 88 years.
Author: Blackout News
Sources: Welt (27.07.26) – BR24 (27.07.26) – MDR (27.07.26) – Fokus (27.07.26)