Is it just me...or are model kits getting dearer!

[jmwallac]

Originally Posted by chola

All you need to do is listen to a financial report on the news, usually you will find figure like wages have increase about a quarter of that of inflation inflation...combine that with the current interest rates, don't be confused that mortgage interest rates have gone up...many of you young blokes (and older ones) who have a car loan will also be feeling the pinch.

Actually, interest rates are historically quite low. Here in the US, the Fed is slashing rates in an effort to free up the log jam that is the credit market. Unfortunately, the rates are tending up lately. Why? Because the mortgages (and car loans, student loans, etc.) get packaged up into bonds and sold (CDO, CMO, etc.). Investors don't want to touch any of this stuff right now, and I'm guessing it will be some time before this passes.

I wonder if anyone has figured out how many gallons of oil it takes to manufacture and deliver one plastic kit? Refining of the plastic aside, how many trains, boats, planes, trucks does it take to get it here? I'm quite sure higher prices are here to stay. It's unfortunate that the higher cost of kits translates into fewer sales. It's a vicious cycle of raising prices and lower demand. It would be interesting to see what percentage of a kit is profit to the manufacturer, licensing and royalty fees, transportation costs, manufacturing costs dealer markup etc. I'm guessing the profit to the manufacturer is the smallest. And honestly, I can't fault someone for trying to make money. Revell, Tamiya, Fujimi, etc. aren't charities. They are the ones putting up massive amounts of capital for tooling, R&D, advertising, manufacturing, inventory, etc. Can you fault them for getting a return on their investment? I'm guessing that's why we see fewer kits from Tamiya. They are most likely making higher profit margins on the R/C cars than plastic kits. Whether they are listed on a stock exchange or a closely held private company, the object is to make a profit. Don't get me wrong...I'd still like to have cheaper, more accessible kits; even if it means curbside with decals for the dashboard!

I'm glad that I've amassed a collection of about 60 kits. I'm like my own little hobby store now. And it's going to take about 30 years to finish that many kits....

[hirofkd]

Originally Posted by chola

G'day,
how many Tamiya kits are now MADE in Japan as opposed to China? I'll bet hardly any, but I am willing to be corrected....

Well, you might be surprised, but Tamiya still manufacturers most of their kits in Japan. The first few batches that we buy from HLJ and Rainbow 10 are definitely made at Tamiya's Shizuoka plant. (I have two Enzo kits, one made in Japan and the other made in Philippines.) The tooling is eventually shipped to Philippines for later batches and also for the oversea releases.

FYI, All Fujimi kits are manufactured in Japan (except for the pre-painted resin engines and PE parts), and the company proudly boasts the business practice (hence high kit prices to keep the local manufacturing jobs). Increasing number of Aoshima kits are now made in China (therefore slow re-stocking), but some kits are still made in Japan.

One of the reasons is that the plastic manufacturing in Shizuoka is still active and healthy, and also Japanese are generally iffy about everything "made-in-China" because of geopolitical reasons.

As for the business practice, "generally speaking," Japanese companies are not shareholder-oriented, and the nation's capitalism is quite different from the west's (, making it quite an interesting study subject, actually.)

Another thing is that Tamiya, Fujimi, Hasegawa and Aoshima aren't publicly traded, so there's no shareholders to suck up to, except for the local banks, which probably respect this Japanese thing called, "social harmony." Plus, plastic model business barely reaches the breakeven (except for Bandai), so there's no higher profit to please the investors every 3 months.

[rockinanko]

Heads up gentlemen!

we're having a lesson or two on the fundamentals of economics here!
thank you all for sharing such an in-depth view on the impact from crude oil, right own to those kit boxes in my closet!

one thing's for sure, i'll treat every kit (oil) my utmost respect & caution whenever i wanna start a build from now on. i must be very sure & 100% confident that i will not screw-up the build. i must build the perfect model, at least to my own standard. i must find ways to preserve the model (oil) so it can last very very long. i must............i............must................. .


gee, modeling (oil) IS an investment!

marc
SGP

[jano11]

Originally Posted by drunken monkey

i) oil is used in pretty much every stage of the process from manufacturing of goods up until it hits the shelves; it isn't just about models being plastic.

I thought we were talking about model kits here!
Molds aren't made of oil! The injection machines aren't made of oil either! Only the kit is made of oil!
When 160 liters of crude oil cost about 120$, how much it costs 1/4 or 1/2 a liter?! You do the maths!

Originally Posted by drunken monkey

ii) internationally, oil is traded in US$. What the increase is in Euros or Yen is not relevant.

What?! Each country will pay for it with it's own currency and oil prices in EURO and YEN did not increase as much as in USD (given that USD lost 30% to the EURO in less than a year).

Originally Posted by drunken monkey

iii) because of oil price increases now, all corporations have to make assumptions about what the prices are going to be like in the future because they operate in a much longer time-frame than you and I and because oil pretty much affects everything.

Well, the prices that are thrown in the news today are usually for the stock they get in 3 or more months.
However I was talking about the price of a kit when it leaves the manufacturers building, not after it travelled all around the world!
So again, the costs involved in making a model are:
1. Licensing from the car manufacturer
2. Conception of the model
3. creating the mold
4. injecting the polystirene into the molds
5. packaging the model

Only phase 4 includes use of oil, about 1/4 to 1/2 a liter of it!
How much does that oil cost? and how much is the price difference for it since last year? Not even 50 cents!

Originally Posted by drunken monkey

While there is a certain truth to the increase in prices being simply imposed by the manufacturers, it isn't entirely arbitary which is what you are suggesting.

I didn't say it's entirely arbitrary!
I said that the increase of the price of OIL isn't the one that is driving the price of kits up by 20% right from the manufacturer!
What I said is that these manufacturers need to increase their profits every year (even every 3 months) to keep their shareholders happy. And unless they move their production to China, India or even Africa they can't do this without continualy increasing the prices!

The oil prices are just the right excuse for it but not the main reason.
That's all I'm saying.

Originally Posted by drunken monkey

Perhaps there is truth in the old saying about if you have to ask what it costs, you can't afford it?

Old sayings usualy do not apply anymore in modern times because, sadly, the philosophy of life changed.
Did you ever buy something without knowing the price?!
Maybe toothpics.

[jano11]

Originally Posted by hirofkd

Another thing is that Tamiya, Fujimi, Hasegawa and Aoshima aren't publicly traded, so there's no shareholders to suck up to, except for the local banks, which probably respect this Japanese thing called, "social harmony." Plus, plastic model business barely reaches the breakeven (except for Bandai), so there's no higher profit to please the investors every 3 months.

That's good news, I hope it stays that way.

[drunken monkey]

Every stage of production requires oil.
The power that runs the power stations that run the factories use oil. Think about that. Light, ventilation, machinary, the weird multi-purpose loos and hand basins that they have in Japan; all are powered, essentially, by oil.
The same holds true for the making of the boxes, the printing of instructions, the vehicles that transport the finished kit to the shelves; in fact, pretty much everything.

Increase in oil prices affects every stage of manufacture and the transportation.
Increase in oil prices doesn't just make the plastic more expensive, it makes everything more expensive. When you equate that simple fact into a complex process such as manufacture and subsequent transportation of those goods around the world and the percentage increase in costs adds up. That is also of course, ignoring the changes in tax on transportation, fuel and airports/ports etc that have also been introduced (i.e increased) recently.

If you're only considering the base cost of the plastic in a kit being the only relevent factor relating to oil price increase then you are simply not looking deep enough at the impact of oil price increase.

Also, considering that as of today, oils prices have gone up pretty much 20% since last year, I don't think that kit prices going up 20% over the past 2 odd years is actually that bad.

[jano11]

I would have thought that they use nuclear energy or burn gas to produce energy.
Do they actually burn oil to produce energy?! Sounds a bit far fetched to me given the financial viability of other resources.

[drunken monkey]

for the UK:
oil provides approximately 40% of our energy and coal provides approximately 30%. Again, the figures for where your energy comes from in your own country shouldn't be too hard to find.
for those interested in japan's figures: link

[jano11]

Sorry for getting of topic, I'm just impressed (not positively) how much of the energy used in Japan is coming from fosil fuel (oil+coal+gas).

[MPWR]

Originally Posted by jano11

I'm just impressed (not positively) how much of the energy used in Japan is coming from fosil fuel (oil+coal+gas).

Where is it that you thought energy came from?

[jmwallac]

Originally Posted by MPWR

Where is it that you thought energy came from?

Mr. Fusion? Political hot air? Good intentions?

[chola]

G'day again.....

Mr. Fusion? Political hot air? Good intentions? good call.

So, basically we are all aware that there is an increased cost for the raw materials, production and transport for model kits....however it is worked out, some of them still seem pretty expensive!

I certainly won't deny anyone or any company from trying to make a profit (I've been in business myself previously and that is why they exist), but there is making a profit, and there is profiteering! I still maintain that the increased costs of getting the raw materials right through to the end product appearing on the store shelves, when spread across the huge number of model kits they produce from the moulds, should still represent a minimal increase. Of course this is all speculation, as we would never really know the full figures of production (not unless you were a shareholder).

In Australia interest rates have actually risen at least 5 times in the past 12 months, wages have not (not to any great extent anyway, definitely not enough to offset the interest rate increases - does that ever happen)! Makes it a bit harder to justify the purchase of an $80 model kit unfortunately.

There just seems to be no end in sight for increased costs....

[klutz_100]

Originally Posted by chola

...but there is making a profit, and there is profiteering!

Which is nicely counterbalanced by the laws of supply and demand in a free market economy and the last time I checked the newspapers, the vast majority of us are all in living in one thank goodness.

[jano11]

Originally Posted by MPWR

Where is it that you thought energy came from?

Where I live most of the energy produced is nuclear and hydro energy based, and some gas, but little oil (only for transportation fuel)!

[klutz_100]

Originally Posted by jano11

Where I live most of the energy produced is nuclear and hydro energy based, and some gas, but little oil (only for transportation fuel)!

Andy's from the USA - their idea of alternative energy and a green planet is "gas swigging" instead of "gas guzzling" j/k

Can anyone say "Kyoto Protocol" 3 times quickly in a row with an American accent?...