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Collectibles: RC2 may be exiting model business
Thursday, February 01, 2007
By Don Hammonds, Pittsburgh Post-Gazette
News that RC2, a venerable company with extensive ties with the model car industry, may be getting out of the diecast and plastic car business is setting off alarms for model car hobbyists.
Company spokeswoman Sarah Meltzer said it's too early to say RC2 is pulling out. It will "continue to operate the business on a daily basis'' while it explores its options, she said.
But Tim Kubicek, who works for RC2 with model car and collectibles journalists across the country, said the company is confronting poor sales and high prices for zinc and is looking at selling all or parts of the business.
Back in the late 1990s and early part of this century, it was not unusual for the company to sell 5,000 to 10,000 copies of a single diecast model car. But RC2 is now selling about a fifth of that amount, Mr. Kubicek said.
The model maker also may be suffering because RC2 has been focusing too much energy on 1:18 scale models instead of continuing to make 1:24 products in large numbers . The problem with the larger 1:18 scale is that such models take up quite a lot of room in home displays, so many collectors, having run out of room, have stopped buying them.
Another problem may be the product mix. Because the model portfolios have been driven by older buyers who remember the muscle cars of the 1960s, many recent products have reflected that taste. But those may not be of interest to younger buyers, whose tastes may lean to 1980s and '90s products.
To be sure, RC2 over the years has developed a lot of loyalty. Its 1:18 products, while highly accurate, are in the largely affordable $20 to $40 price range. That compares to prices that can run $100 to several hundred dollars with smaller companies. And baby boomers who grew up either collecting promotional models or building kits can thank RC2's AMT brand, which provided the lion's share of those products to car-hungry kids.
If RC2 does get out of the business and is unsuccessful at selling its dies and molds to others, it could have a chilling effect on the industry as a whole. Rather than investing in a whole new set of dies, many smaller companies have made their name taking existing RC2 products and modifying them.
Moreover, because a growing number of children are focusing on video games and technology, very few new kit designs have been introduced. And plastic promotional models, once passed out by car dealers or purchased at dime stores, have all but disappeared.
But the bright side of all this -- at least for those collectors who have already acquired what they need -- is much higher prices for their model cars, whether they are kits, die cast or promotional. "Collectors know that they aren't being made anymore so prices will go up for those already out there," Mr. Kubicek said.