Japanese Car in 1/87, part 2

[Albert]

These were the last posts in part 1.

billc said:

Vito,

Yes, the talks with the Japanese automakers have been tabled for now.

The conversation with the buyer was a couple of years ago. In fact, it was when we met in 2005 at a World's Greatest Hobby Show. Of course, you have to remember this was just one distributor but I can tell you initial American distributor orders for 1/87 vehicle models are still not big compared to orders from European distributors which can hit the magic number all by themselves. Without those European orders, it's hard to make a case for a new model. Yes, we all take some risks; there are one or two models in Masterpiece's production schedule that we have questions about.

In recent years, Ricko has changed the equation somewhat. Most of its models have beaten the average and some have gone well beyond that, but the bulk of the action has come from follow-up orders. As they continue to introduce new models and colors, Ricko will get more follow-up orders and continue to be one of the favorite sources for a lot of modelers. We are hopeful that Masterpiece will also become a factor as its catalog grows.

But, even with all that, 10,000 pieces is the target for the first year; the point at which the tooling and development cost is recovered is much higher, especially for an injection-molded plastic model. In addition, to get the license at all, you have to guarantee that a certain number of models will be produced and, even if you can't sell that many, you are on the hook for the royalties for the models you guaranteed.

So when I say the Japanese cars aren't right for us at this time, I am basing that statement on numbers we worked with.

Bill C.

hovehicle said:

Bill,

Many years ago when Kato made their HO scale Nissan and Toyota I knew it was something special. Something that may not be repeated again, simply because there was barely a market for American vehicles at that time. I am fortunate to have known that those vehicles from Kato were special and bought 1 of each color. They still stand today as some of my favorites in my collection, if not right up at the top. Top-notch, quality models and very short-lived. If that is it for premium models of Japanese prototypes at least I can say I supported the cause.

Now, I hope that the Taurus SHO, Dodge Challenger and Dodge Journey do well for Masterpiece for those 3 vehicles alone make it a good year for Masterpiece. Throw in 3 new colors on the new Jeep Wrangler and possibly a Fed Ex step van and I won't need a Japanese vehicle now. Maybe the time will be right in 2009 for an announcement.

Vito L.

[only87]

Tomytecs newest models have been released a few days ago and are now available on Toyeast.com, for instance.

[ensemble187]

Mr Ricko, and Group,

On December 12th, you mentioned that Ricko may not pursue Japanese vehicles in 1:87 scale. However, based on market activity of the Furuta models on, for example, Ebay (which are of significantly lower quality than Ricko’s replicas produced to date), there is probably significant untapped demand for HO models of the high-end Japanese vehicles.

Following are some recommendations from someone who is developing marketing strategies to move housing product in the U.S. Mr. Ricko, if you’re not aware, current demand for housing in America is abysmal, yet there are companies still witnessing strong product demand, and they’re doing this with very distinctive marketing programs and product tailored to consumers’ desires to “personalize” their home. Of course, this is very different from the model industry, especially given the “limited demand-high monetary investment” equation involved in bringing 1:87 scale vehicles to market. But, some of the same strategies may be applicable.

Most of what will be mentioned is nothing new to you, or other model manufacturers, but bears repeating for Japanese replicas to be successful.

Also, Bill and Marc should be able to provide expansive insight on these, especially given Bill’s recent 10,000 unit first-year target comment.


High-Impact Details

The luxury marques tend to translate well into the miniscule replicas inherent in this scale, with design elements such as exterior chrome accents, crystal headlamps, and alloy wheels that stand out on the small models. Many of these items are not featured on lower-end Japanese prototypes like the Mazda2 and Suzukis, resulting in somewhat bland and non-descript HO models. If you can afford to enhance these details on a Japanese model (like you’ve done so well on your Maserati and Chrysler models) they will go a long way to increase their attractiveness.

One might go so far as to presume that one of the reasons why the Spark/Redline series is meeting with such phenomenal interest is because they get all of the details correct, right down to the interior dashboards and seats and photo-etched wipers. These may not be financially feasible for your endeavors, but they are stand-out facets of the models’ designs.


Make Them Shimmer

Mr Ricko, if you were to pursue making a Japanese model, you will need a strong marketing and promotional strategy up front. Explicitly stating that the model will be a “limited run”, and then pricing it appropriately, will spark immediate interest, and advance orders. Also, scheduled runs of prestigious metallic paint colors, over the life of the model, will help to keep sales fresh. Perhaps 1,000-3,000 units per color (depending on the colors available on the prototype), but, your customers need to know in advance that they will have a very limited opportunity to buy one of these color runs.


Keep the Brand Selection Simple

Mr. Ricko, as Marc has reiterated, stay far away from any prototype that does not convey a sense of “sport” or “fantastic luxury” unless you have a powerful, comprehensive marketing strategy over the life of that model. This makes the initial brand and production choices relatively simple, with LEXUS, INFINITI rising to the top. Both brands have a product portfolio that is nearly the same in the global markets…from San Francisco to St. Petersburg. Lexus is already on the market throughout Europe, and Infiniti will have most of its line available to European consumers by the end of 2008. Already, Infiniti is receiving positive marks from auto magazines in the EU, including the UK’s Top Gear. Additionally, very specific Toyotas (e.g., FJ Cruiser, etc.) hold appeal.


After-Market “Tuning” (with a Partner)

If you were to pursue a Mazda mainstream sedan, make sure you have taken great care to select the color palette over the life of the model as well as the numbers that will be produced in “limited runs”, and the models’ minute exterior details that will be readily visible. Again, if the model is conservative in real life then it will definitely be bland 87 times smaller.

You might follow up the LIMITED EDITION strategy with a series of limited edition items to augment the cars. For example, sport wheels, spoilers, etc. Or, enter a co-branding arrangement with a smaller model company to produce these after-market sports parts for you (in order to spread the development risks).


Tell Us We Can’t Have It…Because Then We’ll Want It

Then, tell the market about the limited numbers that will be produced well in advance of each model's introduction. Collectors will shell out innumerable sums to collect a model that they know will have instant value. And, human psychology coming into play, people always want what they think they might not be able to have! Limited availability of Kato’s FTO has boosted demand for the model, with 2007 Ebay auction closing prices falling within the EUR 20,00 and EUR 40,00 range.


“Out of the Box” Advertising

One of the things that I have noticed from anecdotal observations during visits to local hobby shops, and in short discussions with shop owners in both Maryland and North Carolina, is that many owners aren’t even aware that a premium 1:87 model vehicle market exists. I brought one of Ricko’s Chrysler 300s in to one owner and he said that he had never seen one before. As a result, an enhanced U.S. “1/87 Scale Premium Model Awareness” program may be needed, including:

1) Color, glossy post-cards mailed out to hobby shop owners throughout the U.S., Germany, Netherlands, Japan, etc., with particular emphasis on an upcoming series of 1:87 Japanese vehicles.
2) A hard cardboard promotional piece that would be displayed at the front counter of a hobby shop, with one of the new models attached to it (similar to how U.S. grocers use candy at front counters to attract the attention of children)
3) Coordinated, online “Preview Parties” for Walthers’ and Atlas’ (and the equivalent European wholesalers’) best retail customers to be able to view and place advance orders for the upcoming Limited Edition Japanese models.


Forbes’ Focus on Lexus

If you ever reconsider pursuing Japanese models, an article underpinning many of the recommendations that we have provided is in the following links. They tie to a December Forbes Magazine (U.S.) article identifying the Lexus IS250 as being their choice for the top of the list of “Best Luxury Cars for the Buck” on the U.S. market:

www.forbes.com/2007/12/10/cars-luxury-value-forbeslife-cx_bh_1210cars.html

www.forbes.com/2007/12/10/cars-luxury-value-forbeslife-cx_bh_1210cars_slide_2.html?thisSpeed=15000



Happy Holidays everyone!

-Tony F.

[Ricko]

Tony,

We really appreciate your detail analysis. We must seriously consider your suggestions and strategies.

10,000 pcs. for the 1st year was the figures provided by Bill. We are willing to make the models satisfying the collectors even the figures will be as less as a few hundred pieces. Making 1/87 replicas is the hobby of Ricko. Even a model can win or lose in the market, it is not a big issue. Some models can hit the market but some are not.

The most important point, as always, in Ricko is to make our collectors happy.

We need the support from the collectors in long term.

Ricko

[geco65]

Dear Mr Ricko and all,

'Even a model can win or lose in the market, it is not a big issue'. I like your thoughts here, but I think we are all realistic enough to realise that this would be a big issue, particularly if Ricko kept doing this. Have you a very rich uncle with an endless pot of money ?

It would be very nice for perhaps a 'collectors choice' model to be made which may not sell the thousands you would hope to make a profit, but you could surely not keep this going for more than one or two models, if they are 'losers' in the market place.

However, I am extremely happy to hear that Ricko is there to make 'our collectors happy' and I think not only through your excellent models are you doing this, but also by having valuable input into this forum. I think the key in your last comment about the support of collectors in the long term, is very relevant. If you make the models the collectors want, at the right price and quality, and with different colours and variations they request, then you should have that support.

I cannot imagine at the moment, that collectors will not support Ricko in the future, considering your current product range and quality of models. Keep that up with continued listening as to what collectors would want (and pick and choose those selections and put your suggestions to the collectors as well i.e this forum for one) then I think you will enjoy the continued support of the collectors.

Thanks, Gary

PS: Caution note - However, don't let Ricko leave the market because they produced one too many 'collector models' making huge losses. It is better to produce market winners, albeit may be not exactly what the collectors want in the ideal world, just to please them, then to go into bankruptcy. Ricko has done pretty well so far in producing a range of models that had limited (generic rather than specific models) customer input.

[stanhas87]

Dear All:

One of the point I want to bring is the fact that the so-called 'boring, everyday cars' seem to be popular items. First, there were the Motormax Gremlin, Pacer and Tempo (and the latter was a tough one to find) and these were been sold by the caseload; now they are found (albeit the case is half-empty) at the shelfs in different collors. The Ford Fairmont, based on Bill's figures, is another hot seller since its first run is already out. Hence, it is a bit of a thin argument against doing Nissan Bluebirds, Toyota Tercels or a Mazda sedan of some sort.

The next report comes from the three inch world. After an year, RC2 released the 1973 Caprice Wagon. I can not spot it in the stores (I did, but that was explained elsewhere) and it hit eBay and is being sold at $16.00 - 60.00 (yes, it is amazing for me as well) and this is not your usual convertible or coupe, it is a Station Wagon, for crying out loud, and it belongs to the toy world. I also see good sales for CMW's 4-door Dodge Sedan.

Based on these events, is possible that a not so sporty Japanese vehicle may make a good amount of sales. Issue one as a test base and see what happens. Based on what I stated above, I would bet that it will be sucessful.

[Marc S.]

stanhas87 said:

One of the point I want to bring is the fact that the so-called 'boring, everyday cars' seem to be popular items.

Only if they are cheap, usually diecast. For high-end collector's items, the dull, plain-vanilla cars seldom work.

Marc S.

[stanhas87]

Dear Marc:

Agreed. but it worth to mention that the Fairmont is not diecast (nor perhaps as high quality as Masterpiece, but still) and that is also disappearing from the shelfs. I even expect higher sales for the Station Wagon.

I also expect that Motormax Civic and Accord will be very sucessful and will raise some eyebrows elsewhere. Just an opinion, you know. As I always say: to be seen.


Nick K

[hovehicle]

Mr. Ricko,

It sounds like you really do want to make a high quality, premium HO scale Japanese vehicle but you are possibly worried about sales. I want you to sell as many as you possibly can so please go to Marc Schmidt's list. Vehicles that are sold in both Europe and the US give you the best chance for good sales. I think Lexus would be a sure winner but even a newer Mazda would work too.

Tony F. had an excellent post earlier and he mentioned something that I believe is true for many in the model railroading community. Some don't even know that premium exact scale HO vehicles even exist. I just went to a personal website of a noted gentlemen who has a layout set in the late 80's. He's always asking for vehicles from the 80's yet on the layout I saw Bachmann and Life-Like toys from the 1970's-1980's. Not one quality Herpa or Wiking vehicle. Hey, a few BMW's, Mercedes, Audis and Volkwagens would be a decent start! My point: Many hobby shops should have a display by the front counter with a sign that says New Releases for brand new HO vehicles. Just my 2 cents.

Vito L.

[lynn]

It is rumored that Ricko has committed to its distributors making the Toyota Tundra Pickup. It will be out there in 2008.

[Christian]

lynn said:

It is rumored that Ricko has committed to its distributors making the Toyota Tundra Pickup.

Interesting decision. Not one I would have expected, but understandable following the RPS Ford pickups.

mark said:

I think that Ricko has made up their mind and that the 50 of us writing on this board cannot change that, no matter how passionate we are about the subject.

I wouldn't go so far. We might not be many (which I think is good), but we have a lot of experts here, which makes this a very knowledgeable and diverse group. I believe that the various opinions given here do matter. We are certainly able to change the 1/87 world a bit - although slowly.

And concerning the often mentioned Kato models, two shops in the neighborhood seem to have gotten new stock of the FTO and 300 ZX, the latter even in the newer big box. Prices around 8-10 Euros - drop me a line if you want any.

[mstar]

lynn said:

It is rumored that Ricko has committed to its distributors making the Toyota Tundra Pickup. It will be out there in 2008.

This would be great news, one of the unexpected ones. Although I'd prefer Lexus or Mazda models this is a really good looking Pickup that would sell well I suppose. However, I will only believe that after hearing an official statement :-)

[DavidJohnson]

hovehicle said:

Mr. Ricko,

Tony F. had an excellent post earlier and he mentioned something that I believe is true for many in the model railroading community. Some don't even know that premium exact scale HO vehicles even exist. My point: Many hobby shops should have a display by the front counter with a sign that says New Releases for brand new HO vehicles. Just my 2 cents.

Vito L.

Very True. This is exactly the reason I do not have more Busch models in my collection. Having visited many hobby shops in my travels, I have seldom seen them displayed. I have never seen the 64 Mustang hardtop in a hobby shop. So the only way to buy one is special order and I cannot even specify the color. How many 1:1 Mustangs would Ford have sold without show room display?

Happily, my local hobby shop has new vehicle releases on display at the head of the first aisle, including Rickos, Athearns, and CMWs.

Dave

[jeffh]

Although I can understand the enthusiasm of North American members of the forum for a Ricko Toyota Tundra, the vehicle in question is unknown in Europe. I would have thought that the Nissan Frontier/Navarra would have had appeal in both the North American and European markets and thereby greater sales potential, being available in both of these markets.

If a model of the Navarra or another Japanese pickup available in Europe were produced and that model was available in neutral colours such as "white man van white", I would order a minimum of 25 to suit my specific model railroading needs.

[ensemble187]

Jeffh,

Your comment regarding the Toyota Tundra is very valid. While an exciting 1:87 prospect for those of us in North America, it's difficult to justify its production in this scale, from a business perspective, to target 1:87 collectors in Asia and Northern Europe.

Along with Lexus models, manufacturers might also consider a top-of-the-line version of the RAV4 from the Toyota portfolio, as it's somewhat novel and marketed in most of the major global markets, as well as the Land Cruiser V8 (marketed under slightly modified names in various markets, such as the "Land Cruiser" in North America and "Land Cruiser 200" in Eastern Europe), which may also hold appeal as a 1:87 replica. Additionally, the FJ Cruiser, while not on offer in all markets, has unique visual design elements. And, as you mention, if a pick-up is sought, something along the lines of the current Navarra may be a logical consideration.

Personally, I find the chance to buy a 1:87 Tundra replica extremely exciting news (if it's true), but future Japanese selections should hold much broader appeal to collectors globally.

Tony F.