“Boom and Bust”
Older collectors will remember the way that the collectors’ market suddenly contracted in the 1980s, when large quantities of unsold stock from Minichamps, Vitesse, Matchbox, Corgi and other ranges were sold very cheaply to general wholesalers and piles of ‘collectors models’ could be found selling for a couple of UK Pounds each in small retail outlets around the country. This ‘dumping’ hit specialist model shops hard, because it devalued the stock of the same items they already on their shelves, for which had paid full price, while at the same time it lured away their buyers.
I wonder if history is repeating itself? We have seen a large growth in the number of firms offering us collectors’ models and a steady increase in the cost of models. At the same time we have had Atlas and others offering many different partworks across Europe, and even in South America, which has kept PCT Industries busy making lots of models which have also been sold under other brands later, such as Ixo, Ist, Whitebox et al. Questions that I often ask myself at the moment are “how stable is the model car industry?” and “what is a reasonable price to pay for a model?”. Clearly the stability of the market for collectors cars could be at threat with the substantial volume of diecast models being sold to wholesalers by Atlas at low prices. It would appear that a glut of Atlas models will appear on eBay and at Toy fairs, and this will absorb quite a lot of collectors money that might have been spent elsewhere. At the same time, what will happen to PCT and other Chinese contractors if no-one wants to buy the large production runs they need to produce to survive? Will PCT switch to more general diecasting activities, and cut back their model mastering capacity as other brands like Whitebox do not generate big enough volumes to develop new moulds? If the Chinese diecast industry shrinks, then many other ranges may find that the Chinese firms lose interest in doing small runs for them at an economic price and this could affect some of the budget ranges of 1:18 scale diecast metal models we have seen coming from China.
At the other end of the market we see a continual rise in the prices of quality collectors ranges in 1:43, even though new players are still optimistically entering the market. Most ranges offering quality collectors models to 1:43 scale now seem to have a retail price which is approaching the weekly state pension payment in the UK, so as collectors retire, this must limit their number of purchases. 1:18 scale resin models can still be had at bargain prices, but even there the trend of the quality producers has been for significant price rises over the last year. Will the growth in 1:18 scale output be sustainable, especially as new Chinese players like iScale and others are now entering the market at a still-lower price point? 1:18 scale collectors can surely display and store far fewer models than collectors of smaller scale models?
In the US Greenlight, M2 and others are producing large numbers of 1:64 scale models, which sell in substantial volumes alongside the cheaper Hot Wheels ranges. At some point they may saturate the market, unless they can keep on attracting new customers. Greenlight has been at the forefront of doing just that, with TV and Film related models and themes designed to appeal to different collectors segments like police cars and trailers.
In 1:76 scale and 1:148 scale Oxford have kept price rises moderate, and demand is high especially for many of their commercial vehicles and I think that this segment of the modelling scene will continue to grow, because the models appeal to a different market place, often younger people and those with less money and space available.
1:87 scale will again remain generally buoyant, as there are many established collectors and prices have not risen as quickly as in some other sectors. I think that more expensive 1:87 models will struggle to sell in sufficient volumes, however. CMW, one of the few active participants in this scale in the USA, has been taken over after a reduction in the numbers of new models released. 1:87 scale resin models seem very expensive and the quality does not seem to me to compare with that of Herpa, Brekina or Wiking at their best .
Obsolete prices at auction also seem to be wavering at present. The very scarce items still seem to command high prices, especially when two or more collectors are determined to own a rarity but there has been a softening of the prices of “ordinary” models in some cases. Modern classic models, even from some well-known firms, seldom even reach their original sales price unless they were produced in small numbers.
All is not doom and gloom, however! Serious model collectors will simply adjust their collecting habit to match the market conditions. We will need to be careful not to pay too much for models that could turn out to be cheaper later. We may see a few “investor types” selling up and moving on, as we have seen at similar times before, but that would be no loss. We will buy more where prices are cheaper, or less if prices continue to increase. In any event few of us will stop collecting. For makers of models though, and those earning a living selling them, I think that the next year or two may be harder. A flood of cheap models from the Atlas sell-offs will have to be moved on very cheaply with a small margin, which will make it more difficult to sell Corgi, Maxichamps and other models of a similar quality with much higher prices. Sales of more expensive specialist models may offer a bigger margin, but buyers might cut back on the number of models they buy, because prices have risen so much.
It will be interesting to see how the market place unfolds over the course of this year and whether my predictions are correct.
As ever many thanks to those contributing articles recently I think that you would agree we have had a fascinating range of features. And a reminder that you too can write for MAR Online with a few photographs and words about models you are interested in. We can make it into an article that others will enjoy reading – so why not share your passion?