[DADoser]

Will corgi Stay on top of the diecast Market?

[This question was asked on the fL diecast forum a while back – below was my reply BEFORE I read this discussion.]

I think it depends on if the Diecast market is truly represented by folks like us - people who frequent diecast forums.

I can see parallels to the soda industry here. I think Corgi and Dragon in the diecast airplane market are like Coke aand Pepsi in the soda market. (With HM, Gemini, etc. representing 7Up, Dr. Pepper, Faygo, Snapple, etc.)

People in the market usually develop a taste/loyalty to one. (However there are also people drink/buy whatever is "on sale.")

I think Corgi (and Dragon) are the kings of the diecast market. For whatever reason, folks tend to have developed a taste for either of these products.

Just like Coke/Pepsi - I think Corgi/dragon have to do much less work to stay on top. Additionally, both have to make much greater mistakes to fall from the top positions.

I think HM, Witty, and others have the potential to knock Corgi/Dragon off the top of the diecast mountain - but they will have to work much harder to do this than both of these 2 major players have to work to stay on top.
Also - any major mistake by the up and comers in diecast will cost those companies much more (regarding their climb to be King of the diecast market) than a similiar mistake by Corgi/Dragon.

On a personal note - I've really developed a "taste" for Corgi. I've put the only Dragon I had on display back in the box and the only other Dragon I had (Fw 190), I just sold. I love the HM Dauntless (execution and price) - bought 2. But...I prefer pilots. And I'm developing a very loyalist preference for Corgi. For me to ditch Corgi - they would have to make mistake after mistake on every model I bought from them. I don't buy every model. For every Corgi "mistake, there are several other models released at around the same time that are GREAT. I just avoid the Corgi mistake - i.e. Nose Art Fw 190 - and then spend my $$ on a model corgi did well.

The variety and the other factors I mentioned (I believe) will keep Corgi/Dragon on top of the diecast airplane world for awhile. HM seems to be the best potential challenger - but to knock Corgi off, they will have to build a variety of molds, keep consumer costs down, avoid mistakes, and (for the future market), probably have to compete with Corgi head to head on P-51's; Spitfires; Me's; and Fw's.

And again - it depends on who the world diecast market truly consists of. That I really don't know.
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As for as diecast market growth and development, here are my questions:

Who is buying the 21st Century stuff at Wal-Mart? (1:48; 1:32; 1:18 scale planes)
Who is buying the Corgi Showcase at Wal-Mart?
Also, who is buying the FOV stuff at Target?
And...How long does this stuff stay on the major retailers' shelves before selling??????????????????????????????????????????? ?


As far as Hobby Master “perched” to be the new “king” of diecast:
(First I REALLY like HM’s product(s) – Dauntless.)
If HM would have started their line with a P-51 and a Spitfire, how fast would they have sold (compared to the Dauntless/Stuka)? (Are the HM Stukas selling as fast as the Dauntlesses?)
HM can do the rare/unique planes that a small group of collectors want – but will that sustain them in the market AND allow them to keep their prices competitive? (Think Carousel’s Neiuports – I can’t/won't collect diecast at $70 a fighter. ) How many of the following: P-61; Skyraider; etc. in 1:72 – could HM actually sell? What is the true market demand for these? Who would buy a 1:72 P-61 no matter what the price?

Can a company become the king of the diecast market by making small runs of a unique (possibly low demand) aircraft? What particular models of planes are left - in which a company could produce in large enough runs to be profitable while keeping the list price reasonable?


On the “lighter” side –
Think of the Corgi 'wave" (I mean tsunami) that would hit Tuesday Morning stores if Corgi ever went under.
(I would prefer this not to happen.)

[Tyler109]

Originally Posted by JETFAN

One thing that probably will deter the younger generation is the rising cost of AAs, especially the bigger aircraft. So perhaps the "Warbird" strategy is a good marketing ploy to get them hooked early in life.

Another negative effect is that the WW2 generation is declining, so they no longer have the direct link via their parents and grand-parents to that era. Ergo, we should see more of the Korea, Vietnam etc period aircraft in the future.

Very good point. In my line of work I've met several WWII vets as clients so it's pushed me more into WWII stuff over the early jets I always had a love for. Hearing the stories first hand from the men who flew these things did add a great interest to me.

[JC Woodman]

Originally Posted by admin

The problem is very simple, Market saturation. No more no less. There are more and more manufacturers and very little growth in the collector base.

It's great for prices in the short term but it will cause the manufactures to cut out the dealer and sell direct to the collector to make up for margin loss. eventually that margin will disappear too and the market will dry up. What will kill the market for the collector is that the lack of exclusivity of the models will make them uncollectable. These things have to be able to maintain a minimum value of the retail purchase price, and really need to appreciate.

The way to combat this for the manufacturer is to decrease production numbers and increase quality. A lot easier said than done as both increase the bottom line.

You nailed that one A! As a collector who values lower production numbers and higher quality, I am completely willing to pay more for products which meet these criteria. Not so much for the "Warbirds" angle. This Corgi line is a good place to go after the "entry" level collector and market through mass quantity buyers like W-mart etc. Hook 'em on those and let the interest level move buyers like us onto the more selective AA type lines. If Corgi does continue w/ subjects like the Gladiator, Swordfish (both of which must be spendy to produce), I will surely pay more. The Gladiator is a good example of what I will pay a premium for.

[hworth18]

Originally Posted by admin

The problem is very simple, Market saturation. No more no less. There are more and more manufacturers and very little growth in the collector base.

It's great for prices in the short term but it will cause the manufactures to cut out the dealer and sell direct to the collector to make up for margin loss. eventually that margin will disappear too and the market will dry up. What will kill the market for the collector is that the lack of exclusivity of the models will make them uncollectable. These things have to be able to maintain a minimum value of the retail purchase price, and really need to appreciate.

The way to combat this for the manufacturer is to decrease production numbers and increase quality. A lot easier said than done as both increase the bottom line.

Agreed...
This is something I have preached about for over a year now.. With multiple manufacturers producing as many planes as they can, pretty soon, the market will be so saturated and prices will fall to the point that we won't even be able to give a plane away, even at "garage sale" prices... We may be praising these new manufacturers now, but in the long run, it may be the end of the hobby as we know it..

[djjeffhall]

Harry,
Hey there.

While it's true that this may be the end of the diecast market as we know it, what we end up with after everything "falls apart" (My words) will be a much better market. While the average cost per plane may be higher, the planes that come out will be fewer and better. I cannot see Corgi competing in this market if the quality of their moulds doesn't drastically increase.

I've purchased quite a few Corgi'sin the past, have a couple on pre-order, and will order more in the future. However, other than picking up one each of newer types that I don't see anyone else doing anytime soon (Catalina, Lysander, Typhoon) I will pass on Corgi. If the sentiments of folks on this list are a reflection of the hobby in general, Corgi will continue to decline. Should Corgi announce a ME-110 next year, well, I'm getting the announced Hobby Master plane instead. Their moulds don't match up in quality to those from Hobby Master. (And Gemini if they match the generated hype.)

The question to ask yourself is this? Is the thing holding Corgi up in the eyes of collectors the numbers on the stand or collectors card? (Before and after market values included.) Remove the number, take away the illusion of "collectibilty" and I think their values would plummet. (Not to the level of valueness, but also not hold the commanding prices they now are at.)

Perhaps Corgi's value will never fall to the level of IXO, but I do not think they would be viewed in the same way. they would be looked on as a second tier player with lots of diverse moulds that appeal to folks who don't have access to the better companies planes that have since sold out. Who here would buy a Corgi P-51 is they can get a Dragon P-51 instead? Will anyone purchase a Johnnie Johnson Spitfire given a choice between Corgi and Gemini? (Presuming, once again, that Gemini matches the hype.)

In my opinion, should Hobby Master include collector cards with their planes, we would see the Lexington Dauntless's demanding "Donald Duck" Spitfire prices.

Will Corgi collapse as a company? Of course not. I'm sure they make more in one day on their Batman licensed products than they make on their AA line in a year. Will they decide to discontinue their AA line? Perhaps? As Harry pointed out, we are likely seeing the peak of the diecast market. Enjoy it while you can.

[hworth18]

I am mostly basing my opinion on the collapsed NASCAR market in which I was a huge collector.. In the beginning, Cars retailed for around $25.00 each with many of the true collectable cars fetching a few hundred dollars + each.. Within a few years, cars were going for about $50 each, and the demand for the rare cars dropped when new manufacturers came into the market, introducing similar models at a bargain price.. Within a few years, the market was saturated with cars of all scales and price ranges.. Now, 9 years later, I have about 50 cars that I originally paid $25-$50 or more for and I can't sell at $5.00 each if I had to.. This unfortunate pattern is now being repeated by the 1/72 military plane market, much to my dismay.....

I hope this market doesn't collapse, believe me, I have WAY too much invested...

[Spinnaker]

Originally Posted by djjeffhall

... I cannot see Corgi competing in this market if the quality of their moulds doesn't drastically increase.... Their moulds don't match up in quality to those from Hobby Master. (And Gemini if they match the generated hype.)

I beg to differ on the comment regarding the quality of Corgi's moulds. Some of their older moulds are showing signs of tiredness (eg. Spitfire), but their more recent efforts are as good as anything on the market. The P-40, B-25, Me 262 and Gladiators are all very nice pieces.

Where Corgi have let themselves down is quality control. Within a particular model there can be big variations of quality. For example, my Norway Gladiator is close to perfect, but others have complained of ill-fitting engines, and there have been reports of glue-marks on the paint, or finger marks etc. If Corgi can get on top of these problems, their models will stand up nicely against anything else in the market.

The other issue they need to address is pricing as Corgi's models are significantly more expensive than comparative models from other manufacturers. I believe they rely on the "limited numbers" of their models to justify the additional cost, but I suspect that may in the long-run prove to be a fallacy.

[Tyler109]

Originally Posted by hworth18

I am mostly basing my opinion on the collapsed NASCAR market in which I was a huge collector.. In the beginning, Cars retailed for around $25.00 each with many of the true collectable cars fetching a few hundred dollars + each.. Within a few years, cars were going for about $50 each, and the demand for the rare cars dropped when new manufacturers came into the market, introducing similar models at a bargain price.. Within a few years, the market was saturated with cars of all scales and price ranges.. Now, 9 years later, I have about 50 cars that I originally paid $25-$50 or more for and I can't sell at $5.00 each if I had to.. This unfortunate pattern is now being repeated by the 1/72 military plane market, much to my dismay.....

I hope this market doesn't collapse, believe me, I have WAY too much invested...

That is very true and I'm already begining to see that trend with diecast aircraft. Before NASCAR ran me out as a fan I would always just wait for the season to end to get that $69.95 car for $25.00 on ebay (hence your deals at Tuesday Mornings) I'm begining to wonder what will happen if another manufactuer gets involved what will happen. The good news for us is that we the collectors in all reality decides who goes and who stays

[SkyBuffalo]

[quote=djjeffhall;3198] Perhaps Corgi's value will never fall to the level of IXO .quote]

From the few Corgis I've bought compared to large group of IXOs, I'd say IXO is already the winner, on average. The Corgi Short Sunderland was a dissapointment. I'm still hoping for good things on the Bong P-38, though. Wish me luck!

[Tri-motor]

If you're basing Corgi on the Short Sunderland, Corgi fails the test! And deservedly so, the Legends is the worse Corgi ever! In fact I hope they have a re-call of these someday!