What Would Be a Good Guess of Lionel's Current Production Numbers?

[Anonymous]

I am pleased with Lionel's 2004 vol I catalog. Engines and speeders in the $70 to $150 range are what I can afford. Looks like I've got some to pick from coming up. The pricing of the more detailed top of the line scale and semi-scale engines in the $500, $1000 and $1500 or so range has gotten me wondering just what the demand is. How many $1,500 engines are produced?

No complaints, or whinning from me -- just a reformed HO guy, happly playing with, learning about and sharing my toy trains.

Thanks,
Steven Crawford

[Anonymous]

I would say not many. Although I would really enjoy having one of those $1500 engines, I just can't see spending that much money. I'm geared more towards the $500 to $700 engines, depending on what's out there.

I know several people who have purchased many of these. My one friend, for like the past 5 years, his wife bought him a LionMaster($1500) engine.

I've only seen a couple hobby shops that carry the really exspensive stuff, and I'm talking like mega-dealers. So I would have to say not much is produced.

[Big_Boy_4005]

Interesting Question. I was in the hobby business back in the early 80's, when General Mills still owned Lionel.

Back then there were no single items that sold for over $500. Only the aluminum passenger sets sold for over that, and they were still under $1000. There were also "Limited Edition" sets whose production was set at 10,000 units. If I remember correctly, the passenger sets were also limited.

This was actually the beginning of the effort to market and produce new collectable trains, as a suppliment and lure to postwar collectors.

Each subsequent incarnation of Lionel, has raised the quality and variety of the offerings since then. Many collectors used to try to buy one of every piece offered in the catalog, but after a short time that became a futile goal, as the catalog ballooned in size.

I would also guess that Lionel (and the others) still take advance orders from their dealers. As the orders are received and counted the final production quantities are set. Many dealers will take advance orders from customers, and offer a discounted price, and then only buy what they have presold plus a couple for their own stock, since carrying these large items ties up valuable capital and may take time to turn over.

My guess would be 3,000 units of the highest priced items give or take, especially with all of the competition out there these days.

P.S. I have never spent over $350 for any single piece. I try to buy TMCC engines for about $250, and have 10. I don't have any steam engines and won't ever buy any, so that makes my job a lot easier.

[Anonymous]

I want the ACELA!!!!!!!!!!!!! Page 30 and 31 of the new catalog!

[Anonymous]

Now-a-days, most large companies like Lionel are trying to make money by keeping their inventories low. They think that by keeping an empty shop their manufacturing orders will fly through, and their capital wont be tied up in inventory. I don’t understand that logic, because with the World population explosion in full swing it seems to be causing a depression.

This new out-sourcing to Asia while not passing the savings on to the customers is not going to work either. I think the toy manufactures could learn a lot from Wal*Mart.

my 2 cents;

Richard

[Big_Boy_4005]

Richard, this is a business that specializes in not making the same thing from one year to the next. Lionel hasn't kept an inventory of finished product in years. There are common parts and assemblies, but they do not want finished product sitting in a warehouse. Lionel's warehouse is actually their dealer's shelves, and the money is in their bank account.

They are very much like McDonalds in the way they produce trains these days. The catalog is the menu, you order it they make it fresh, and the menu is always changing. Even McDonalds has done away with bins full of finished food, in favor of stocking components and assembling product on demand.

Lionel works on a year round production schedule, and has to carefully allocate line time to produce all of the items that they offer. That was how it was explained when I toured the factory in Michigan in 1993, and I would doubt that much has changed even though production is now done in China. If a problem arrises during the production of one item, it can effect the release of many other items. This is part of the reason certain items are listed for delivery one month, and don't show up for six more.

The money making comes in from the cost reduction of labor in China. The difference in wages paid, more than makes up for the slight increase in shipping. This isn't outsourcing, this is 100% made in China.

Finally, Walmart style manufacturing and warehousing could never work for the size market that Lionel and the others play to. If there are 250,000,000 people in this country how many do you think have not shopped at Walmart? 30%? How many do you think have not bought a Lionel train? Based on the membership of the TCA, LCCA, NMRA, and readers of CTT, OGR, and MR magazines, train buyers total at most 125,000, which translates to .05% of the population. In other words 99.95% don't buy trains.