Should Models be Brands?

 

The subject of should models become brands has been relevant and important lately. I have had conversations with family and friends about the subject since some have texted me wondering why certain car manufacturers are doing certain business decisions. So, here is my take on should car models become brands.

In 2009, Dodge/Chrysler/Daimler/FCA split off the Ram pickup truck from Dodge and created their own brand from that model. That has been a very successful decision. Hyundai has split Genesis off into its own luxury brand, copying a page from Lexus, Acura, and Infiniti recipe, but also making a brand from a model. Chevrolet has rumored that they might consider making the Corvette a brand in itself. Manufacturers have split models into brands in the past, some have success and some were a failure.

Now, Ford wants to make a Mustang a brand, starting with the all-electric SUV, the Mach E. There is also a rumor that they want to make the Bronco a brand as well. Although, what doesn’t make sense is how they use the Raptor nameplate. They utilize that name for the F-150 Raptor, and Ranger Raptor, but apparently that name will not be utilized to distinguish a more powerful Bronco. A beefy Bronco is rumored to be called a Warthog. Confusing, but whatever.

What Ford should learn though, is they have almost been in this situation before. They had Mercury, that they closed because they couldn’t seem to explain to buyers why they should pay more for a car that is identical to the Ford equivalent. Lincoln almost had the same fate. Hopefully, they have learned from those experiences and don’t mess up a new Mustang or Bronco brand. Toyota and Subaru are also the same boat. They had the Toyota 86, the Subaru BRZ, and the Scion FRS all on the market at one time. And now they are almost doing the same thing, but instead of the Scion available, the Supra has taken that slot. We will have to see how this goes. 

I wouldn’t be surprised if Nissan does this with their Z car. Especially with the launch of the new 400Z. The Z name is known by people both with and without automotive knowledge so that would be a good start for them.

What do you think? Should auto manufacturers start making separate brands from their successful models?

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Dyson Ditched Car Making

2 and a half years later, my shirt is the same but my prediction was completely wrong.

Two and a half years ago, there were reports that Dyson was going to be working on an electric vehicle. I made a video and a blog on September 28th, 2017 where I covered the topic briefly and predicted that Dyson would have a concept on the road before a Tesla semi would be on the road. That was one terrible prediction on my part. Tesla 1, Brentton 0.

Autoweek ran an article recently that explained how the founder of Dyson spent $609 million of his own money on the electric car project, only to find out that in order to simply break even, the car would have to be sold for $180,000. If this isn’t proof that profitability in transportation and mobility services is almost near impossible, I don’t know what more you could ask for.

While I am sad that Dyson abandoned the project, and let me down on my prediction, I can also understand and respect the choice. I want to step out of the auto industry for just a moment to provide an example of high cost, low profit projects. Recently, my wife has been looking into creating a point and click video game for PC and mobile. When you add up the cost of software, talent (if you can’t do everything yourself), time, materials, a somewhat simple game can start off anywhere from 3 to 5 thousand dollars to make. People pay for quality games. In order to turn a profit, we would most likely have to sell the game for $10 which might price out our audience. If we sold it at a $1, we would need to sell over 10,000 copies to turn some small profit. We don’t know if we have an audience that large. So, after counting up all the associated costs, and estimating and understanding the industry a little more, it is not surprising that large game studios spend hundreds of thousands of dollars to produce a top tier game, like The Last of Us or Forza or Fifa. Then, in order to make any sort of profit, there is a reason those games are nearly $80 at launch, even with the quantities they sell them in. The cost to produce video games is an upfront, staggering cost.

Hopefully that will help shed light on just how hard it is for these EV automotive start-up companies to produce a product. The industry is cut throat and expensive. No one works for free. If you can’t turn a profit you won’t stay in business. And for what it is worth, Tesla is barely profitable. Elon can get an Eskimo to buy ice in the arctic and has had investors pour millions into Tesla. If everyone wanted their return on investment right now, the company would cease to exist.

The Hardest Part about being a Hunter

I’m a quarantined car collector. These are some cars I found before everything went down.

A hobby that I have had my entire life is collecting Hot Wheels. It is something that I have always done and while at certain points of my life I collected less cars than at other points, I have never gotten out of the hobby. There have been times I’ve thought about it, but just can’t bring myself to. One of the most fulfilling thrills is going from store to store to hunt down those little 97 cent cars.

That has been the hardest part about this worldwide virus pandemic. I have not left my house in over 5 weeks. In order to hunt, one has to be able to go out and do it. Now, my self quarantine is exactly that. My wife and I have chosen not to go anywhere during this time. So, maybe those of you reading this might not have pity or empathy or sympathy for me. I understand and accept that. In some regard, I’m not seeking that.

While it is hard to watch fellow collectors out and about soaking up all the fresh cars off the pegs, I have to accept that I have not chosen to go out and hunt. I want to be safe and keep my wife safe. In the long run, I’d rather be alive to hunt another day than to risk getting sick. Plus, in this day and age, I can always have cars shipped right to my door. So once this subsides, maybe I’ll hunt online for all the cars I missed. It’s not as thrilling, but it keeps the collection complete.

Collecting Influence

Economics teaches us about the law of supply and demand and how they affect one another. I have found that to be true in the real life collector car world and it’s influence on diecast cars. Lately, I have been following the trend of the Ferrari F40 and the McLaren F1. These two cars in real life have skyrocketed in value, and that spike in popularity and prestige has carried over into the diecast collector world. It is hard to find a good Hot Wheels Ferrari F40 or McLaren F1 for a price below $10.

A few years ago I experienced the same thing with the Hot Wheels versions of the Tesla Roadster, Lamborghini Murcielago, and the Bugatti Veyron. I ended up spending far more than I care to admit to purchase a 2009 Dream Garage series Murcielago in green on eBay. Asking prices for that car are still quite high.

That situation plagues my mind while Hot Wheel hunting in stores now days. Often times when I find something on the pegs, I will tell myself, “It is only a dollar now. If you want it later, it is going to cost you.” Sometimes I still put it back on the shelf and walk out empty handed. I am trying to be a responsible adult. I am also hoping I’ll find it again to solidify that I should in fact purchase it.

One similarity between the two collector car markets is that the real life collector car world has concourse condition. Diecast car collecting conditions are in the package or not. This topic alone could lead to so many other discussion points. In real life, actual completely “original” vehicles are becoming very rare as age and limited replacement parts slowly take away from factory original condition. I think diecast has the same type of issue going on. The “DLM” or diecast liberation movement is a sweeping craze right now. That movement simply means that the cars are being opened and removed from their packaging. That might not be a big deal for diecast cars produced from 2000 on because of such a large number produced and records of those numbers. But, for cars produced in the 70’s, 80’s, and 90’s, that can be alarming. The amount of still packaged cars from that time is dwindling and the unknown amount of produced versions is certainly going to factor in. The more cars that get opened from that time frame, the higher the demand and higher the price for an unopened original model will be.

A second similarity is that the real life collector car world has rare limited edition models and trims. Diecast has both limited edition production numbers in some cases as well as wheel and paint variations. Diecast has an advantage in this area because not only can they produce the real life car models with special trims, they can also customize them further. This can produce even greater demand for such limited models.

All collecting for both markets boils down to what are people willing to pay for what they want. Perception is important and closely following trends in both real life car collecting and diecast collecting will certainly be beneficial. With all this in mind, know what you want, know how much you want to pay for it, and go enjoy the things you purchase.