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Saito2

Cost to manufacture

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There's been some talk on the forums about the price of Tamiya products. Tamiya manufactures kits in Japan and the Philippines to the best of my knowledge. Can anyone with knowledge on the subject enlighten me on the factors like cost of living, average wage, cost to manufacture, etc. that would affect the price of Tamiya products vs the majority of RC products that seem to come out of China or Taiwan?

I've had it in my mind that Tamiya is unique in that they still manufacture some of their product in their native Japan. Correct me if I'm wrong, but I imagine this isn't the cheapest method as other manufactures from Japan no longer produce there. In a sense, I'm curious if we should be questioning Tamiya's higher prices (but with high quality) but rather question why companies like Traxxas or Associated, who don't manufacture in their native countries, shouldn't be cheaper? Whether I like the situation or not, I always felt (outside of the earlier MAP pricing mess) that Tamiya charges what they want/can/need to for good quality products and if they are unaffordable, its not Tamiya's responsibility to make them so. They are still a profit driven company like any other. If the market won't accept what they charge, then they will have to lower prices (which I imagine is what occurred with the earlier MAP pricing experiment.)

There was once a great push in the US to "buy American". In that scenario, many US products had begun to decline in quality, making cheaper and gradually better quality (and eventually superior) products from overseas (Japan mostly at the time) become increasingly attractive. I can't fault that. That's competition. But...I would feel entirely different if an overseas company ripped off a good US design verbatim and made it cheaper with lesser materials and the use of a cheaper labor force. That's seems like thievery to me. Just my opinion.

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my take is very simple. Tamiya demands prices that they are knowingly aware will work.  i am in the USA. so that means i have to deal with a manufacture that does not worry about my market. they worry about the asian market. the conversion is money and how they can best sell goods to make a profit. Tamiya knows a 500 dollar bruiser is going to sell. because we will buy it. other tamiya goods are affordable, so kits at 120 usd are out there but they still take us for whatever we will buy. the rere thing is what it is but shouldnt be 200 or more over the reasonable cost. i personably keep buyingn dn01 at 110 usd because its almost a 201. i can upgrade it. but, tamiya preys on us as a way to way upcharge on certain things. the difference between a tt02b ms and a tt02b is astronomical.  everything about tamiya is difficult. why?/ because we are not living in tamiya land. we all live outside of where tamiya is based. i havent seen a asian member here? or a member that is in the heart of tamiya production. we are outsiders. we have no say in what tamiya does. hence the argument of replacement parts or why is this part so hard to get. tamiya doesnt worry aout us. we are not their market.

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Hello

Im a Indonesia native, allow me to share my point of view.

I believe that in general, Tamiya priority product is not RC anymore nowadays, compared to 20-30 year ago.

Here, RC is a exclusive hobby, and not many people doing it, due to economy factor mostly, and i think Tamiya knows it along time ago. Tamiya then choose quantity ( cheaper products, more buys).

Thats why they push other products like static kits and "mini 4wds", which is cheaper and have easier access to most of people, especially kids.

Every year we have mini4wd championships, and the local winner goes to japan for the final. I never hear that kind of thing  with their rc line.

One other thing about rc is they break and need maintenance and (sometimes) its not cheap. Mini 4wd breaks too , but with $13, u can buy a new one. Static kits break too, mostly because of my cat pushing them off the table XD.

Most of people i know buying rc is just for curiosity, after it break, they sold it or shelf it, and turns to another hobby. 

Considering tamiya price, which is more expensive compared to other products, i think its about quality and copyright issue.

I dont know about rc alot, but let me give you a example with mini4wds.

U can get knockoffs for half price of tamiya mini4wds, but for even local racing (prize tourney) , they always use tamiya.

With knockoffs, u will find bad molding, unprecision screw hole, easily break plastic, strange gearing, etc. U rarely found these problems with tamiya kit.

I think tamiya RC market is only for hardcore tamiya lovers that have a attachment for it, nostalgia maybe, or found that it have unique machinery, or other things.

I dont know about their cost of manufacturing, but i hope that they can lower their price so that my future kids/ grandkids can have fun building/tinkering/running a beautiful kit like my boomerang or other tamiya kits.

I think ive rambling enough, XD. Cheers.

 

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@Saito2, you're asking a very complex question in that it has a lot of variables to it.  I don't work for a hobby or toy manufacturer, but I have worked for a company that sourced product from southeast Asia, and this resulted in me traveling to several countries including Singapore, Indonesia, Taiwan, and the Philippines.

A lot of our electronic assemblies were specified and architected in the USA with low-level design completed in Singapore and sourcing/assembly/testing occurring in Indonesia.  We were a USA-based company creating products for the USA market, so we knew the customer needs, the key specifications, and the best solution to meet all the requirements.  We were also paid the best out of the three locations and had the highest cost of living.  The next step in the chain was the company in Singapore who kept their business development, sales people, manager, engineers, and designers local to Singapore.  They did the  low-level design work, process documentation, and test programming for the factory.  They weren't paid as well as us, but they were paid better than the factory workers in Indonesia, and they had commensurate cost of living.  In Indonesia this is where the product was actually assembled, programmed, tested, boxed, and shipped to us in the USA.  They had the usual manufacturing cell arrangements that were similar to our prototype lines in the USA, just scaled up for more volume.  When I visited that factory in 2004/2005, the typical factory worker was making $0.30 per hour in wages with a fully burdened labor cost of $0.60 per hour to the main company in Singapore.  This is where I was riding in a microbus down dirt roads watching families of four or five (a mom and dad and 2-3 small babies) all riding barefoot on mopeds with no protection whatsoever.  The pay was low, and the cost of living / standard of living was low too.

When we fully specified, architected, designed, manufactured, tested, and shipped products completely in the USA, we would sweat all the details down to the number of fasteners used in the assembly, the thickness of foam gaskets, how many copper layers in the circuit board, EMC mitigation measures like shielding and conductive paint, etc.  Every piece of material and every process step had to be fully justified.  We were running lots of simulations and calculations to optimize everything.  Every person in factory was making at least double minimum wage (over $10 per hour) if not more.  Process engineers and test engineers could have been making triple to quadruple that.  So the cost of the product was higher because the process steps were the same in the USA as they were in Indonesia, but we're talking about a 30x difference in labor rate.  It was interesting when our company started outsourcing production to Singapore/Indonesia; I once asked about labor costs and fastener count, and they (the CM) just laughed and said labor cost is not an issue.  Whether the assembly has six screws or eight, it doesn't really matter because the cost of that person's time is so low.  Consequently we were still diligent with our specifications and architecture, but the low-level engineering got a little more conservative/sloppy/expedient/take your pick.  There was less simulating and calculating, and there was just a little more material and not too much concern over labor cost anymore.  Yet we still came out ahead because a lot of that raw material came from component suppliers in southeast Asia, so it didn't have to travel as far and it didn't have the markup through distributors that we saw in the USA.

The percentage markup varied quite a bit between in-house manufacturing and contract manufacturing, too.  When the product was completely made in the USA, our in-house manufacturing division built and internally sold a finished product to our division, a marketing and engineering group.  Since both groups were held to the same overarching profit and loss expectations, essentially there were two large margins applied to the material and labor used in the assembly; hence the focus on design optimization.  When we dissolved the in-house manufacturing division and moved it all to a contract manufacturer, the material costs stayed about the same, the labor rate substantially dropped, and the margins the CM charged were much lower as we were simply one of many customers they serviced.

One other short story is I visited a Japanese component supplier manufacturing their product in the Philippines.  There was a small core group of Japanese salesmen, managers, and engineers at this plant location filled with a substantial number of Filipinos running the machinery and completing the process steps.  As were driving through the small town on the way to the factory, I was struck again by the dirt roads, families on mopeds, and housing that consisted of lean-tos with corrugated steel roofing and patchwork for walls.  There were children sitting on the curbs of the streets, people urinating on poles, lots of people aimlessly wandering around.  There were several automotive shops breaking vehicles apart and welding parts together to make all sorts of hybrid creations.  It was a bit intimidating and eye-opening coming from a comfortable USA existence.  It felt like the most basic of existence over there.

So, taking a step back and thinking about Tamiya again...

  • Tamiya positions itself as a premium brand through their brand mark ("passion and precision") and has a reputation coming from their legacy of static plastic models.  In Tamiya's book there is a letter from a UK distributor apologizing to Tamiya for daring to weigh the plastic sprues and suggest a price based on the amount of resin.  That event made Tamiya-san erupt with anger as it showed the difference in how Tamiya perceives its own products versus how the distributor was treating them (premium quality vs. commodity).  To be treated as a commodity was insulting to him.  So a component of a Tamiya kit's pricing is their belief in it.
  • Due to their background in toolmaking and plastic injection molding, Tamiya has a bias towards using these techniques in many of their designs.  All the entry-level and mid-level kits have a substantial amount of molded parts which in turn drives tools.  There's a capital cost for these tools and a finite lifetime for them.  In comparison, you'll see a company like 3Racing minimize how many plastic tools it has to invest in by producing more chassis with cut FRP or carbon fiber.  It's easier to buy sheet material and run a CNC cutter to make those parts than it is to make a tool for a chassis tub, and it's wise to reuse suspension arms and bulkheads across several chassis.  If you look at a TT02 First Try kit for $80 versus a Sakura XI Sport Ver. NU for $80, the differences in construction and standard features are amazing.  I think 3Racing's tool savings translate into more budget for better standard equipment (turnbuckles, ball bearings, oil dampers).
  • Since Tamiya manufactures in both Japan and the Philippines, it's worth noting there should be a labor cost difference between both locations.  There was a thread some time ago about which Tamiya kits are made in Japan, and I think we noted that many of the TRF cars and mid-level products are made in Japan while the entry-level stuff seems to come from the Philippines.  The cost of living in Japan is higher, so they have to pay factory workers more there, and that adds cost to a product.  It probably doesn't work very well for low-margin, low-cost kits like a TT02.  Therefore, opening an operation in the Philippines/Indonesia makes some sense to control costs.

So if we compare Tamiya to Traxxas or Associated, I think you have to look at:

  • Brand positioning and what the market will bear.
  • Construction technique and tooling/material/process implications.
  • Location of the labor force, their standard of living, and how low the wages can be to make the factory more attractive than working in the fields.
  • Currency exchange rates
  • Shipping costs
  • Race team sponsorship
  • Marketing and cost of sales
  • R&D expenses (engineering)
  • Capital costs
  • Real estate and costs associated with it
  • Other costs I can't think of right now...

You know that Associated is owned by Thunder Tiger, and I've often wondered how Associated can afford to still be in business.  Racers are a small percentage of the market, so it doesn't seem like that many RC10s, SC10s, RC8s, etc. will be sold.  I suspect the R&D expenses are minimized as much as possible (basic incremental changes to models) and the kits are produced in the same factories in China that make Thunder Tiger's mainstream products (same low-cost labor force).  For Thunder Tiger, there is some value in the legacy brand recognition in the USA and it gives them a channel for pushing all those relabeled 1/12, 1/18, and 1/28 Thunder Tiger products.

Traxxas has clearly staked out their position as the basher's brand, and they are getting a premium for it.  A lot of their designs reuse components between them, so the tooling costs are spread across all of them.  Labor costs are cheap in Taiwan, but maybe not as cheap as Indonesia or the Philippines.

The brand that really fascinates me is RJ Speed.  Here's a company that started as BoLink, and they still manufacture in the USA 40+ years later.  You can see how the designs use a lot of cut FRP, aluminum extrusions, and very simple molded parts.  They're tied into the RC race track scene with road cars, drag cars, oval cars, spec series cars, etc.  It's all very American and very traditional.  When the constraint is the design/manufacturing location and an expectation of an American product, the materials and designs are simplified so the owner can still make a living from it.  They stand in stark contrast to Tamiya and Traxxas.

Not sure that I'm really answering anything, but I hope the rambling gives you some perspective and food for thought as you think about the question more.  I suppose it's brand positioning, willingness to pay by the market, and cost control that all come together to make these businesses work.

 

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Also keep in mind manufacturing costs rarely translate to MSRP.  I remember when Nike and Reebok sent their shoes overseas to be manufactured for cents on the dollar in sweat shops.  Did the price go down?  Heck no.  If anything it went up because demand went up.

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As far as I've experienced in manufacturing, (sub sea valves, automotive parts, glass ,textiles and now, wood panels) , production location is based on labour costs, production costs, transportation/distribution cost and time. 

When I was made redundant from the textile industry, production was moved to Sri Lanka, what we where paid an hour, they where paid a month (and I think the Sri Lankan government where giving large manufacturers free/very low cost, factories to bring work to the country), and of course with alot of garments being seasonal, the huge cheap transport, cargo ships, could be sent months in advance. 

The only real benefits, of manufacturing in an 'expensive' location ,are a skilled workforce and being able to react quickly to current trends. Can you imagine how much more profit tamiya could have made, if they could have reacted to the massive surge in sales over the past few months! Instead, everything is , out of stock.

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I'm from the Philippines and the Tamiya plant is based in the island of Cebu (305 nautical miles from Manila). Although the factory is here, none of the locals or direct buyers are allowed to purchase from the factory which is good to avoid counterfeiting and reselling. The local/official Tamiya distributor, Lil's Hobby Center has direct access to the factory but only for inspection and tour visits which is also limited. In that way, the products' value hold as well as the quality. 

However, I'm not all for Tamiya parts to be honest. I really find their hop-up parts expensive as compared to aftermarket brands which cost almost half the price only. Some are even designed better to be honest. I buy Tamiya parts that I could justify while I buy aftermarket parts that are just equal to quality, looks and performance altogether. Of course I'm also picky. If I were to get something for "bling", I'll make sure it doesn't look cheap nor cheesy. The reason why I still use  a lot of genuine Tamiya parts. But for aluminum screws for example, Tamiya sells them in 5-packs while Yeah Racing sells them in 10-packs for half the price and just about the same quality and color. Same goes for many other parts like motor mounts, servo mounts, carbon fiber parts, and the list goes on.

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@speedy_w_beans wow bro. dont disagree with that synopsis but id like to offer a more " laymans" argument. we (the USA) are not the market. Tamiya is not producing kits for  us. We get to pull the fun bu t it isnt geared for us, tTamiya is producing many things for the "asian" market we are an after thought. But we are not realized within the marketing plan of tamiya. we are a secondary sourrce of income. 

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I have a very limited knowledge of manufacturing, but as a large volume hobby buyer from distributors and manufacturers, the production costs determine the quality of the product.

Japan is very expensive, so the very best product is made there. If makes sense; why spend a bunch of money to make junk? Fit, finish, instructions, box art, packaging, quality control are all exceptional, and I'm of the opinion that they're the best hobby products you can buy. My customer return rate is essentially zero, and I've never had a bad experience, personally. But, ouch, that pricetag.

Taiwan is very good, too. Nowhere near Japanese, often cheaply packaged, but not terrible. Decent quality control, really good materials, not as "finished" as Japanese, but still very nice. Unless an English speaker writes the instructions, they can be confusing.

Chinese is literally all over the place. They must pay nothing over there for labor. Consistency between product runs is insane. You could have five perfect runs , zero defects, then the sixth run has a 40% return rate. From the same factory. Everything is to spec, so they'll do whatever the buyer wants. I've seen some beautiful stuff from China, very pricy, marketed as of exceptional quality, with the best packaging I've ever seen that was made with such poor materials that it wasn't able to function as designed without breaking immediately. You'd never see that from Taiwan or Japan.

I really don't know what the deal is in Japan. They must really take things very seriously. 

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1 hour ago, Big Jon said:

They must really take things very seriously

Hah yes that's largely it. They don't muck about. And they don't need to engage in making a quick buck. They are an outlier when thinking about asian producers; nominal democracy, universally highly advanced society, very long life expectancy, excellent health care. Korea is on a similar trajectory. 

10 hours ago, Saito2 said:

question why companies like Traxxas or Associated, who don't manufacture in their native countries, shouldn't be cheaper?

I suspect nobody is getting really rich from designing and selling RC car kits. The market is small. Development is expensive. There's a minimum they can charge before it becomes completely unattractive. And unlike Tamiya they can't subsidise their RC lines through profit from higher volume mass produced items like the statics and minis Speedy mentions upthread. If they don't make a good amount on every kit, one bad year will kill them. Yep there's a big margin on the Asian produced stuff, but they need that margin to engage in the market. Ultimately, I suspect they would produce in their home market if they could, but they cannot. 

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9 hours ago, speedy_w_beans said:

The brand that really fascinates me is RJ Speed.  Here's a company that started as BoLink, and they still manufacture in the USA 40+ years later.  You can see how the designs use a lot of cut FRP, aluminum extrusions, and very simple molded parts.  They're tied into the RC race track scene with road cars, drag cars, oval cars, spec series cars, etc.  It's all very American and very traditional

For the UK this would translate as Mardave, simple designs and been around for years - started in 1971. I think in part it comes down to not wanting a 6 figure salary and having a real passion. The same mentality that used to be your local model shop owner, happy to just be a part of the hobby. 

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15 hours ago, Finnsllc said:

we are an after thought

Not that this deals with manufacturing cost, but I don't think a company the size of Tamiya has completely ignored the US market over the years. While I agree their domestic market would have more pull in their marketing decisions I don't think other counties (particularly the US) just get the scraps and are left to deal with it. While a re-re like the Fire Dragon was pretty much geared to their home market, the Frog wasn't. The rumor was they weren't considering the Frog for rerelease but it was so popular abroad, they went forward with it. Supposedly the High Lift was developed from a US prototype that came about because there was such a high demand for the Bruiser to return here in the US. Eventually we did get the Bruiser back too. Was it highly popular in Japan as well? The TXT-1 was developed with US support and the TXT-2 had a basis in one of the Bigfoot trucks before the licensing agreement fell through. The Blackfoot was wildly popular here in the US but again, was in so in Japan? Perhaps I'm wrong, but I don't think a company gets as big and successful as Tamiya by ignoring the world and only catering directly to their home market (even if they do show preference to it at times.).

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Not sure they ignore the US but we aren’t at the top of the list.  The hobby seems to be on life support here and since the divorce with MRC other companies have eaten Tamiya’s lunch especially in the racing and truck market.  Very few lhs carry Tamiya.  Can’t even buy spares here, have to get them from HK or Tony’s.  Tower is ok.  Their prices are decent but parts and aftermarket support for a Tamiya is nonexistent.

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On 8/4/2020 at 1:15 AM, speedy_w_beans said:

Due to their background in toolmaking and plastic injection molding, Tamiya has a bias towards using these techniques in many of their designs.  All the entry-level and mid-level kits have a substantial amount of molded parts which in turn drives tools.  There's a capital cost for these tools and a finite lifetime for them.  In comparison, you'll see a company like 3Racing minimize how many plastic tools it has to invest in by producing more chassis with cut FRP or carbon fiber.  It's easier to buy sheet material and run a CNC cutter to make those parts than it is to make a tool for a chassis tub, and it's wise to reuse suspension arms and bulkheads across several chassis.  If you look at a TT02 First Try kit for $80 versus a Sakura XI Sport Ver. NU for $80, the differences in construction and standard features are amazing.  I think 3Racing's tool savings translate into more budget for better standard equipment (turnbuckles, ball bearings, oil dampers).

Depending on the level of injection mould tool you can be looking at between 100,000 to millions of shots before it has had it. Aluminium tool regularly last 100,000 shots, a fully hardened all singing and dancing tool can be well in the millions. From the pictures I have seen Tamiya tools are steel, probably pre-hardened P20 for general stuff which should last 100,000's if treated correctly.

It all get's murky though when we move onto the glass filled and carbon filled mouldings. Adding a filler like that wears the tool and the mould machine barrel/screw. The tools have got to be fully hardened and therefore are very expensive.

But basically yeah there is a high investment. I do wonder if this is what drives the Tamiya ReRe program? Some maintenance on old tools + re-polish and they are good to go again.

The problem with CNC routing a flat sheet is that it's flat and that is the limit of your design - within reason you can mould any shape. But for sure it simplifies the design process and initial outlay.

There is one thing generally speaking RC car aluminium parts should generally be considered inferior to high carbon fibre filled polymers - obviously a reasonable grade of aluminium is better for not stripping thread and probably does better at not wearing when ground against concrete but given that the strength is probably as high or higher in a high carbon filled polymer there is a massive weight saving.

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5 hours ago, Manix92 said:

Depending on the level of injection mould tool you can be looking at between 100,000 to millions of shots before it has had it. Aluminium tool regularly last 100,000 shots, a fully hardened all singing and dancing tool can be well in the millions. From the pictures I have seen Tamiya tools are steel, probably pre-hardened P20 for general stuff which should last 100,000's if treated correctly.

It all get's murky though when we move onto the glass filled and carbon filled mouldings. Adding a filler like that wears the tool and the mould machine barrel/screw. The tools have got to be fully hardened and therefore are very expensive.

I think I read here that Tamiya still has lots of the original moulds in usable condition because of the plastics they use.  Tamiya gets some stick (both here and in racing circles) for not using tougher plastics in their models, but the trade-off is they are still using old moulds and don't have to re-tool.  Other manufacturers using different plastics don't keep their models (or spares) in production for as long because the mould wear.

These manufacturers would have to suffer the cost of reconditioning their moulds in order to continue production of an existing model.  Maybe that cost is offset against the cost of designing all new moulded parts for an all new model.

Perhaps this is why we now see more new models and innovation from other manufacturers, while Tamiya continue to churn out alternate bodies and pain schemes on the same old platforms.

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8 hours ago, A-Baum said:

The hobby seems to be on life support here and since the divorce with MRC other companies have eaten Tamiya’s lunch especially in the racing and truck market.

Tamiya was king of the general-use RC car back in the 80's for various reasons but changing taste, the decline of the hobby and other viable competitors more attuned to the US market among other factors changed that.

8 hours ago, A-Baum said:

 Can’t even buy spares here, have to get them from HK or Tony’s.  Tower is ok.  Their prices are decent but parts and aftermarket support for a Tamiya is nonexistent.

IIRC, MRC required any store selling Tamiya RC to buy Tamiya spares which were re-bagged in those yellow and red MRC spare parts bags. Tamiya, being as popular at the time as they were, was a big draw so the hobby shops had to go along with this. MRC even issued their own part's books with exploded diagrams to make parts identification and ordering easier along with a crossreference between MRC and Tamiya part numbers.

Picture 4 of 5

Picture 2 of 5

I miss catalogs...

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3 minutes ago, Mad Ax said:

I think I read here that Tamiya still has lots of the original moulds in usable condition because of the plastics they use.  Tamiya gets some stick (both here and in racing circles) for not using tougher plastics in their models, but the trade-off is they are still using old moulds and don't have to re-tool.  Other manufacturers using different plastics don't keep their models (or spares) in production for as long because the mould wear.

True. This is a trade off. For the restorer, Tamiya plastics can be a gamble. A old Tamiya car may be ok or a crumbling mess depending mostly on plasticizer loss while RC10 plastics and some Kyosho plastics seem to last forever. The plus side is Tamiya's molds are still usable, like you said. I wonder if this is part of the reason Kyosho has re-tooled most of their models from scratch. Rumors generally revolve around lost molds, but they could have been tossed due to wear from the higher quality glass fiber plastics Kyosho generally used in their better offerings. Good point @Mad Ax.

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1 hour ago, Saito2 said:

True. This is a trade off. For the restorer, Tamiya plastics can be a gamble. A old Tamiya car may be ok or a crumbling mess depending mostly on plasticizer loss while RC10 plastics and some Kyosho plastics seem to last forever. The plus side is Tamiya's molds are still usable, like you said. I wonder if this is part of the reason Kyosho has re-tooled most of their models from scratch. Rumors generally revolve around lost molds, but they could have been tossed due to wear from the higher quality glass fiber plastics Kyosho generally used in their better offerings. Good point @Mad Ax.

Not proof, but when Ultima parts were (re-)used for the vast Sandmaster/Outrage series of Kyosho cars in the late 90's, the poor quality indicated extensive mold wear. The parts were originally (Ultima) and in their second life (Sandmaster/Outrage series) made of fibre reinforced plastics. As stated by Manix92, also plasic specialists in our company have emphasized the increased mold wear when using fibre reinforced plastics.

By the way, the Super Ten Sports series, which was a derivative of the Sandmaster/Outrage series, had shorter suspension arms of a new design, so flash, mold separation lines, mold alignment and so on, were clearly better than in the old Ultima parts used for the same models.

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On 8/3/2020 at 3:49 PM, Saito2 said:

There was once a great push in the US to "buy American". In that scenario, many US products had begun to decline in quality, making cheaper and gradually better quality (and eventually superior) products from overseas (Japan mostly at the time) become increasingly attractive. I can't fault that. That's competition. But...I would feel entirely different if an overseas company ripped off a good US design verbatim and made it cheaper with lesser materials and the use of a cheaper labor force. That's seems like thievery to me. Just my opinion.

100% agreed.  

British kit maker, Airfix almost died when it was being produced in England.  Then it got revived by moving the factories to India.  In this age of world trade, insisting on domestic production only is a suicide.  If Canada can make steel cheaper than USA, we should buy Canadian steel.  Our cars will be cheaper and easier to sell.  If Bangladesh people can make Levis jeans for $40, that's better than Americans making them for $100.  I wish we supported job training better, so the stitchers and miners who lost jobs would become MRI technicians and get paid twice more (and live longer than mining).  

Also if somebody copies a US design, that IS Thievery.  Designing takes money and effort.  That's why there are intellectual property rights like copyrights, trademarks, patents, etc.  China has not been very respective of those rights.  But in recent years, as their products reach better qualities, there had been few cases where the Chinese court had upheld foreign claims.   If some other country like Vietnam or India steals the exact design of Hobbywing 1060 or iMax B6, and make them cheaper, China wouldn't he happy, would they?  (though there are plenty of clones within China)  

As for the cost, I don't know much about it (except that molds are ridiculously expensive).  

I found this article below.  XB kits are build by hand, shells are also manually masked and spray painted.  

https://visor.ph/culture/inside-the-tamiya-factory-in-the-philippines/

 

P.S. As mentioned already, manufacturing costs don't necessarily reflect retail prices.  In the 90's, I knew an optometrist in Seattle area.  She visited a small factory in South Korea where they could make any kind of frame she wanted.  Just show them what you want, they can make a frame for 50 cents to $3 USD.  They wouldn't copy directly, something would have to be different.  But they could make them better than world-famous brands.  So yeah... $2 frame would sell for $200, if they are better quality and cheaper than $300 brand-name glasses.  

In this regard, I'm glad that cheap Chinese glasses are lowering the prices in general.  Another optometrist (in Oregon) said that some of the Chinese mail order glasses his patients bring to him to check, have gotten very good in quality control.  While I condemn thievery, if Chinese sellers can make prescription glasses for $50 instead of $300, I'm all for it.  

 

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Copying a design is infringement (not thievery) only if the design is a trademark or copyrighted.

Otherwise, there would be no non-OEM auto parts, for instance. 

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11 hours ago, Juggular said:

British kit maker, Airfix almost died when it was being produced in England.  Then it got revived by moving the factories to India.  In this age of world trade, insisting on domestic production only is a suicide.

There is another edge to the coin, though.  We might think the current pandemic is an edge-case, but it's an edge-case the experts warned us about for years and despite some significant scares, we collectively ignored it.  An unintended consequence of Britain outsourcing the majority of its manufacturing is that at the start of the pandemic, we completely lacked the infrastructure to make PPE, ventilators and other equipment.  During a national epidemic we could have bought it in from abroad, but with the rest of the world already diverting manufacturing capacity to domestic, we struggled to get what we needed.  We even had issues with shipments coming in across foreign territories being delayed with threat of confiscation because they wanted it for themselves.  At one point (I heard anecdotally but from a source I trust) we were shipping our test samples to the US on cargo planes because we didn't have sufficient testing capacity here.

Every nation has a responsibility to maintain at least some domestic manufacturing capacity.

Another factor that has been overlooked in this thread is the conditions of workers in Eastern factories.  Now admittedly, some companies take their social responsibilities very seriously but I've had literally a 3-minute Google to try to find some solid info and I can't find anything about a UK, US or EU law that specifies any regulations about working conditions for outsourced manufacture or labour.  But let's not forget the Nike factory scandal and the shadow that hangs over the clothing industry.  I recently watched a documentary about car tyre production in Asia which had some hidden-camera footage of the factories and the farms where rubber is grown.  Several major tyre manufacturers "declined to comment."

Outsourcing may be cheaper for geographical reasons - for example, ready availability of raw materials.  But often as not it is social and geopolitical: labour is expensive in the West because the cost of living is high.  But the cost of living is high at least in part because we in the West have collectively created an economy run on strict regulation.  We demand a minimum wage, minimum health and safety standards, minimum living standards such as insulated homes, drinkable tap water and clean sewage treatment.  We would not allow Eastern-style factories to exist in the West, but we are still happy to buy cheaper products from the East.  I suspect because we are (deliberately or accidentally) ignorant of what is happening there.

Obviously not all factories are sweat-shops - Tamiya's videos show the Cebu factory to look as good as anything in the West.  I work for a company that has a large team in India, and they work in a modern air-conditioned building as good as any of our UK offices (or at least they did, before they all had to work from home #becausepandemic).  But the tyre documentary and the Nike factory scandal show that it's not just cut-price outlets like Primark who can be caught cutting corners on safety and conditions.

That's not to say this is entirely an Eastern problem either - in May 2018, the Financial Times ran an article on sweat shops in the English city of Leicester.  Large numbers of eastern immigrants work in unsafe conditions in close proximity for low wages.  This is illegal in Britain and the EU, and yet it happens.  In July 2020, as factories re-opened, Leicester was the first English region to go back into lockdown due to a localised coronavirus spike.  Largely, it is believed, due to unsafe conditions in these sweat shops.

The peril with buying at a discount is that high-ticket items can't compete and must either close down or reduce costs to suit.  Before we know it, it is no longer possible to buy any product that does not exploit somebody somewhere in its chain.

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10 hours ago, Mrowka said:

Otherwise, there would be no non-OEM auto parts, for instance. 

I can assure you after spending many years in the motor trade fixing cars, that pattern parts are not the same as OE ones made under licence. They never ever fit quite right, and require various amounts of bending and sometimes even cutting to fit properly. Which puts the labour cost up.

So while they may be pattern parts, they aren't using the same pattern as the OE parts.

I'm with Juggular on this. If you're copying someone else's design as near to exactly as makes no difference in order to profit from it, then it is indeed thievery.

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1 hour ago, Fuijo said:

So while they may be pattern parts, they aren't using the same pattern as the OE parts.

I've made some experience with this too. I worked as a quality engineer for the OEM automotive supplier Denso from 2008 to 2012. I supported various  OEMs  and never handled any quality claims related to non-OEM parts, but a colleague had one especially terrifying case.

A German OEM raised a claim for a car still covered by warranty that had been in an accident in China, resulting from an A/C-compressor malfuncture. The A/C-compressor and the servo steering pump were driven by the same belt, so in the case the A/C-compressor should seize, the pulley had an predertermined breaking point that would ensure that the pulley would break the connection to the shaft. As the pulley was still supported by a bearing on the outside, it would continue to rotate and not throw the belt, thereby ensuring that the steering servo would still be powered. In the mentioned case, the compressor had seized, but the pulley hadn't broken loose from the shaft as it should have, so the belt had come off and servo assistance for the steeering was lost. You may argue that a car is still possible to drive safely when power steering is lost, but in many cases, when it happens suddenly and is totally unexpected, that's not the case. I've handled many cases of lost power steering that resulted in accidents. In the mentioned case, the driver couldn't cope and an accident happened. 

The OEM was furious, so the A/C-compressor was returned to us for investigation. As soon as my colleague unpacked the part, it was clear to him that it wasn't an original part. The cast housing was much rougher and stickers not correct though with our company name. It turned out to be a Chinese copy, where a lot of shortcuts had been made. Among other things, they had used a different material for the pulley and hadn't cared to incorporate the specified predertermined breaking point. So the low quality compressor had seized, pulley hadn't broken loose from the shaft, belt had come off and the accident was the result.  It turned out that a Chinese authorized dealer had replaced an original A/C-compressor with a copy they had sourced locally instead of sourcing it from the OEM like they were obliged to do. 

This case made it even clearer to me that I will never replace a safety-related OEM part with a non-OEM part on my own cars. And parts that may not seem to be safety-related, like an A/C-compressor, often are after all.

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2 hours ago, Fuijo said:

I can assure you after spending many years in the motor trade fixing cars, that pattern parts are not the same as OE ones made under licence. They never ever fit quite right, and require various amounts of bending and sometimes even cutting to fit properly. Which puts the labour cost up.

So while they may be pattern parts, they aren't using the same pattern as the OE parts.

I'm with Juggular on this. If you're copying someone else's design as near to exactly as makes no difference in order to profit from it, then it is indeed thievery.

Those parts may or may not fit the same, but that doesn't mean that the OE has a claim for infringement.

BTW, intellectual property rights are not considered "natural" property rights, in that the only reason IP exists at all is because the law says so, and not only that, but the law also states that those property rights don't last forever.

Otherwise, we'd have to pay royalties to whoever it was that invented the wheel, fire, etc..

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1 hour ago, Mrowka said:

Otherwise, we'd have to pay royalties to whoever it was that invented the wheel, fire, etc..

No we wouldn't. The wheel is an engineering concept. There have many many different designs of wheel since the concept was invented. But if you copy someone else's specific design of wheel in every way, then you are stealing that person's design.

Try making some Porsche cup design wheels or Fuchs identical to the originals, and selling them, and in the UK at least, you'll be in trouble.

Fire is naturally occuring. There were forest fires before there were humans, so probably not subject to copyright.

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