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Old 10-10-2008, 06:28 PM   #31
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So how long until these companies start cutting back on sponsorships?
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Old 10-10-2008, 06:53 PM   #32
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I think some people get this wrong. Racer car, luxury car doesn't mean more profit for the company. In fact, it means less profit. Why? because they can't sell hop ups. I believe but I'm sure TT01, TA05 makes more profit then 416 in Tamiya. Properly tamiya sell 100 pcs of TA05 and only one 416. Plus the meat is TA05 brings the sales for hop up parts. This is why you see real big RC companies do not focus on race car level, because the market is so small. The reason they promote race car is for the reputation not money. That's why you see Tamiya, Kyosho, Thunder Tiger has so many player level rc cars.

So, if Xray is focus on the highest racer car level. It will run in to big trouble especially the market situation now.

You may wonder why I don't mention Serpent, Mugen... as they are also race level dedicated because they do not have a manufacture. Mugen is make in Taiwan and Mugen Japan has only like 10 people working. So no problem for them even in the financial situation now as the same as Serpent.
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Old 10-10-2008, 07:33 PM   #33
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Eh, how the stock markets are doing isn't going to have a huge affect on privately held companies.

Stock markets fluctuate regularly. What really is of importance to any RC company, X-Ray or otherwise is how much operating cash do they have. If they rely on short term loans often, then yes they are in trouble. In fact, most companies are doing just fine if they have sufficient cash to cover operations. The problem arises when they have to ask the bank for a loan to cover payroll, that they then payback before the next payroll check is due.

So to worry about an RC company solely because of the stock issue is a bit simplistic. Honestly, if you are under 40 this stock market downturn is gonna be a big financial boon for you by the time you reach retirement. Remember the mantra, Buy low, sell high. Well if you buy right now... you're buying low. If you're panicking and selling. oops! Anyways, that's another discussion.

so you are suggesting that a global economic downturn is not going to affect people's expendable income?

that's wierd
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Old 10-10-2008, 08:22 PM   #34
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so you are suggesting that a global economic downturn is not going to affect people's expendable income?

that's wierd
Where did I say that?

I said it will not affect a healthy company. I never mentioned anything about consumer spending. Yes people will spend less (That's a duh!). But does that mean, X-Ray specifically is going to go out of business as the OP suggested? I don't think so.

If X-Ray is in the financial trouble that the OP is suggesting, it's going to go a lot higher than just them. That means Hudy would likely be in dire financial trouble as well, which I doubt with the new tools they are always coming out with.

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Old 10-10-2008, 10:16 PM   #35
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Where did I say that?

I said it will not affect a healthy company. I never mentioned anything about consumer spending. Yes people will spend less (That's a duh!). But does that mean, X-Ray specifically is going to go out of business as the OP suggested? I don't think so.

If X-Ray is in the financial trouble that the OP is suggesting, it's going to go a lot higher than just them. That means Hudy would likely be in dire financial trouble as well, which I doubt with the new tools they are always coming out with.

Paul
Tubybody: Please read again my first post. I have not say Xray will be out of business. All I mean is they had a bad timing on expanding the manufacture that may cause them in to financial problem.
It doesn't make too much sense to me that the financial crisis will not affect a healthy company. Maybe I'm wrong. Could you tell me which sector of business or specific company. I would like to buy some stock. thanks.
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Old 10-11-2008, 10:17 AM   #36
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ioxqq - I don't understand why you picked Xray, it's not hard to imagine that during economic downturn every manufacturer will suffer to some extend due to slower sales, so do hobby shops, race tracks etc. And referring to your earlier post above, I don't know if you've read this thread, but FYI, apparently it's Serpent who is in bankruptcy right now while restructuring and moving their manufacturing to asia. Reading some of these posts in this thread seems like you guys do book keeping for Xray

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Old 10-11-2008, 10:38 AM   #37
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ioxqq - I don't understand why you picked Xray, it's not hard to imagine that during economic downturn every manufacturer will suffer to some extend due to slower sales, so do hobby shops, race tracks etc. And referring to your earlier post above, I don't know if you've read this thread, but FYI it's Serpent who is in bankruptcy right now while restructuring and moving their manufacturing to asia. Reading some of these posts in this thread seems like you guys do book keeping for Xray
I think the reason why Xray was picked is becuase they are the most expensive cars on the market to support (my opinion). With the increase of the 15-20% increases I have seen at my LHS this extends Xray above the bar of pricing them selves out of the market.

You can disagree with me all you want but this was my personal reason that I sold my three Xrays and all of the countless parts that went along with them. When I see a single arm go from $6.00 to $7.50 I get pretty concerned. I had been running my cars a lot and over time the parts start to wear (like any car), but the cost to replace these wore out parts is getting out of hand. I am enjoying my TC5s and the cost to replace parts when they break. I am just not convinced anymore that the quality of Xray is worth double the costs of the other manufactures.

Is Xray in trouble? no I don't think so, but when people start to feel the pinch they find a way to still race with less money or they stop racing. I would hate to see us all stop racing just so that a company can maintain their level of profits. When times get tough we all have to suck it up and take a little less money if we all hope to survive financially.
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Old 10-11-2008, 10:49 AM   #38
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...With the increase of the 15-20% increases I have seen at my LHS this extends Xray above the bar of pricing them selves out of the market...
That price increase was due to US $/Euro exchange, Xray did not have a net-gain from it. In May, the exchange rate hit all time high $1.6/Euro, it's down to $1.34/Euro now, if it stays there or euro weakens even more, you never know, we may even see a price decrease...
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Old 10-11-2008, 11:04 AM   #39
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That price increase was due to US $/Euro exchange, Xray did not have a net-gain from it. In May, the exchange rate hit all time high $1.6/Euro, it's down to $1.34/Euro now, if it stays there or euro weakens even more, you never know, we may even see a price decrease...
I have heard that a few times and it might be true. In Hudy's article he also talked about the costs of bringing manufacturing in house and the costs associated with it. You are paying for that in the price increase.

To be honest I do not care the reason...it affects my personal costs to race. All markets are going to stay low and go lower for a while. The dollar continues to weaken as well. The concept of a price decrease in the R/C industry gives me a little laugh.
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Old 10-11-2008, 11:22 AM   #40
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Default Speaking of Asian Manufacturing. Its not the end all.

ioxqq: Do you represent a Taiwan or Asian firm?

I heard a recent news report from Germany about many companies who choose to move manufacturing to China, only to find out the cost was much greater than they anticipated. China is not really a third world country anymore (more like second). So its cost of living is getting higher. Which means the cost of manufacturing will grow. There was another good show that pointed out that many of the recent scares like the toy lead, and the chemical in their milk came from manufacturers who were trying to cut corners because labor costs rose.

On top of this, unless a company owns the actual plant, and has control over what comes from where. They have to rely on third parties that go out and seek a plant that can machine or mold the parts for the company. This third party seeks the cheapest he possibly can, as he can pocket more of the "inbetween" difference from the company to the plant. He has no obligation to share which plant is making the actual items for the company. This information was directly from speaking to a CEO of a small wooden toy manufacturer. She went as far as going out and finding a shop and workers in China to make her products to guarantee quality.

Don't forget as well, when you move manufacturing to China (or even Taiwan), you are opening the doors to copying. This is especially so if you rely on third parties to "gather" your parts for you. Even though if you open your own plant and hire the workers, the parts are more accessible then for others to copy. Especially with the lax copyright laws in China.

I see manufacturing shifting to India if it does at all. It may not however as since India is a democracy, the workers can form into Unions and such easier than say in authoritarian, corrupt, or dictatorship governments. So hell, some of the nasty African dictatorships may become new production centers. Look at Nigeria.

There is a major "skunk" in all this none of these companies who try to "compete" at the lower price want to listen to. (Well other than what guarantees do the workers have for a fair wage in authoritarian governments). Oil. If they are having to produce or import their items, the cost is going to be greater and greater. No and if or buts. In the long run if they can survive, they may find producing locally may be the best option not only cost wise, but keeping their local economies afloat. So in short, maybe Xray is doing the smart thing long term, while Serpent must just have stabbed themselves in the back.
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Old 10-11-2008, 12:32 PM   #41
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GK: The reason I picked Xray is they proudly announced that a new manufacture plan last year. Now facing financial crisis. Bad move for them.
Yes, I think it is truth that EURO makes the sale price of Xray higher. So as inflation in their country. I can tell that even the EURO dropped more the sale price will not drop. Remember, there is many other factors controlling the sale price. Not just Xray alone (hobby shop, distributor, driver salary....). Who doesn't want to make more money. Business man raise up the price when there is a chance. If I own Xray, I will not drop the price due to exchange rate. I will only drop price due to competition, marketing, or marketing share, must has a reason that motivate me to drop price. Drop price with no advantage, this is no way for a business.
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Old 10-11-2008, 01:03 PM   #42
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oXYnary: Your copying case is real in China. If you bring something into China for production. You really open the door for them copying. BUT this only apply on something with technical skill. Like Cisco router, memory chip technology, processor technology..... For RC car, there is NO such technical skill that people can only steal their unique skill from manufacture. You buy a rc car, you can tell how does the suspension works, and those molding plastic and CNC metal pieces are nothing skillful in China with their technology having now. It is just a matter if the want to make Xray quality or not.

You mention Xray may want to keep the local economies. I doubt it. From my understand, 99.99% of business only seek for more profit. Who care about the local economies. If they are big enough, they will just seek for other place with lower production cost. This is the duty for CEO, they need to increase the profit every year with 2 digit increasment. Anyway, that is what are the companies doing in general. It may not able be to apply on Xray as I heard Xray country's salary is as low as in China in avg. Anyone can tell me this? Also, if not xray, I think I never heard that county. What does this country do? What is it famous of? Is it true that their government is backing up Xray? If that is true, this is sad. Xray is just a small bsuiness.
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Old 10-11-2008, 01:27 PM   #43
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Even without a economic downturn the on-road market is already saturated with high-end cars from last years models. This willl lead to lower sales with on-road kits. The switch from a TC3 to a TC5 is huge just like the switch form a Pro4 to a Cylcone. But now most racers already own a high-end sedan and the switch from last years model to this years only off a small advantage in geometry.

Ask your self this question.. Where is a budget racer going to spend a yearly budget of $500.

A: Buy a Brand new Luxuary Sedan and sell the old car to buy a new body and a few spare parts.
or

B: Keep thier current car and buy a Lipo pack, 4 sets of Rubber tires, new body, more spare parts and still have $250 in the wallet.
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Old 10-11-2008, 01:33 PM   #44
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GK: The reason I picked Xray is they proudly announced that a new manufacture plan last year. Now facing financial crisis. Bad move for them...
I'm sure they will consult with you next time they're thinking about expanding their business.
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Old 10-11-2008, 01:34 PM   #45
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oXYnary: Your copying case is real in China. If you bring something into China for production. You really open the door for them copying. BUT this only apply on something with technical skill. Like Cisco router, memory chip technology, processor technology..... For RC car, there is NO such technical skill that people can only steal their unique skill from manufacture. You buy a rc car, you can tell how does the suspension works, and those molding plastic and CNC metal pieces are nothing skillful in China with their technology having now. It is just a matter if the want to make Xray quality or not.
Unfortunately completely wrong. Ever heard of FHS? There a plenty of copycats in China. Look on ebay for an example. This may actually be the same vehicle from the same factory, but someone else is marketing it. In some cases though, its a complete copy based solely on making molds of the molds.

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You mention Xray may want to keep the local economies. I doubt it. From my understand, 99.99% of business only seek for more profit. Who care about the local economies. If they are big enough, they will just seek for other place with lower production cost. This is the duty for CEO, they need to increase the profit every year with 2 digit increasment. Anyway, that is what are the companies doing in general.
This was only one of my arguments. You completely ignored the others other than copying. As it is, no your again wrong. A business is to make money yes, but your mistaking high stakes publically traded companies with privately owned companies. A CEO of a public company is tasked with making as much profit as possible for the share holders. A privately owned company can look to whats best for their own situation. The owner of the private company in a sense has more freedoms of choices. The downside is much less capital if versus they traded stock. If this interests you, the former starter and CEO of The Body Shop, Dame Anita Roddick has talked before of how taking her company public was the worse thing she ever did.
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