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Russell Sheldon
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Discussion Starter · #1 ·
This interesting but all too brief article was published in the 11th April 2004 edition of the Spanish daily newspaper El Pais:-



Free translation, kindly done by David Lahoz Martin, editor of Slotcenter.

FROM "SCALEXTRIC" TO THE SHOWCASE

Rafael Barrios produces approximately 300,000 miniature cars a year, exporting 80% of the production.

Rafael Barrios' passion for cars has led him from the racing circuits, where he used to compete, to "Scalextric" tracks, for which he now produces his own miniature cars at his factory in Ibi (Alicante). He sells his models around the world, where they are proudly displayed by hundreds of thousands of collectors. 300,000 units are sold every year, netting 9,5 million euros in revenue.

Rafael Barrios' modern and brightly lit office is located in a residential area on the outskirts of Madrid. However, if it were not for his desk and chair, one would wonder if it was an automobile club or perhaps a toyshop. Behind him, the trophies he won as a racing driver are displayed, including that of the Spanish National Championship, while the rest of the walls are completely covered by shelves stuffed with scale reproductions of cars and trucks. These are the miniatures that are manufactured by FlyCarModel, the company he founded in 1994 out of his passion for motor sport and which has become recognised worldwide.

Barrios started racing at the age of 16 and since then has never abandoned his passion - cars - that has finally become his business. Modelling was one of his hobbies, so when he wasn't competing he played with his Scalextric, spread throughout the corridors of his house. And he discovered the key to his success; he patented a system that consisted of placing a magnet in a particular part of the chassis that prevented the cars from continuously coming off the track. Together with his partner, who left the company in 2000, and a model of a BMW M3 in his pocket, he went to Ibi (Alicante) looking for someone to produce the car. He contacted numerous companies and eventually started a business, which has grown way beyond his expectations. In 2002 he sold 315,000 units and last year, due mainly to the strength of the euro, sales were 290,000 units.

The small companies, which produced his first orders, have now become a 3.000 square metre factory of his own, with a personnel strength that has grown from initially four to 104 employees.

Barrios places the use of technology and care for quality as the basis for the growth of his company. "We are the only slot car manufacturers who do not produce in China, to be able to control things better," he says, "and we decorate our cars with tampo printing and not with stickers". "China would reduce our costs up to a 50% but we would not be able to attend to our clients expectations". This quality has resulted in his cars - up to seven or eight new models per year - being sold not only as toys, but also considered to be collectors item. "Up to 1,5 million Pesetas have been paid for one of our cars". The average price is around 54 euros.

FlyCarModel has 497 different models in the market and Barrios calculates that almost half of the sales go directly from the store to the collector's shelf. "There are clients who buy two units of the same car, one to play with and the other to collect". There are also companies that order their own versions for commercial reasons. Approximately 25% of sales correspond to these special orders.

Racing Trucks

It takes almost ten months to produce a new car, starting from the initial design, the production of the mould and the tests, until it leaves the factory. And during the life of each model, around 50.000 to 70.000 units can be sold. The company is the only one in the market to produce racing trucks.

Barrios does not want to exceed production by much more than 300.000 units per year but does want to increase production of other components, such as spare parts.
 

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Scott Brownlee
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Very interesting, thanks for posting.

Now, anyone from Hornby, Techitoys or Carrera care to list similar data for comparison? I hope so.

Scott
 

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Phil B.
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I know we`ve been here before but- "care for quality" and "attending to clients expectations" Maybe if Mr Barrios moved Fly to China we would get better quality control and he could do us a more affordable price .
Cheers Phil B.
 

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Thank you for sharing, interesting stuff indeed.

My biggest beef with Fly is Tampo quality (it's the collector in me, I know... I should get me priorities right
) no but seriously, on certain car's it's great, others there appears to be some silly issues.

Personally, I couldn't envisage the problems if the car was produced by a rival (based in China) just like Phil B mentioned in his previous post.

Take the recent Red, White, Blue Daytona, on the particular example I viewed, the stripes overlapped and were badly misaligned, giving a car a rather shabby finish compared to Tampo print on rival products.

Pity, nor is this the first time either, may be its me just being too finicky, but when Fly are marketed/priced as a premier mainstream slot car product, this sort of sloppiness is harder to excuse.

I just can't help thinking, they get so much right, if they were to just go the extra yard.

Ah well, despite the above observation, they produce some wonderful products and are still a firm favourite.


Jamie
 

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Russell Sheldon
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Discussion Starter · #5 ·
What I find fascinating is that the journalist calls slot racing "Scalextric" and this appears in the headline. Bear in mind that this is a daily newspaper with a mass readership. I therefore assume that slot racing in Spain is generally referred to as "Scalextric".

No wonder therefore that SCX aren't likely to give up the "Scalextric" brand name in Spain!

Kind regards

Russell
 

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DT
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Barrios says:QUOTE "China would reduce our costs up to a 50% but we would not be able to attend to our clients expectations"
It is well known that moving production to China is tricky for us 'Westerners', and quite often there is upheaval, job-losses and initial quality issues.

But as can be seen by Scalextric with the fantastic quality of their recent cars, the quality is there.

On a business level, it would be very wise to reduce costs by 50%. One could be more competitive back home in an ever-more aggressive market.
 

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Russell Sheldon
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Discussion Starter · #7 ·
Given the ballpark figures, if 300.000 units generates 9.5 million euros, the approximate average price per unit is 31.66 euro. Presumably this covers the cost of production, the overheads of the 3.000 sq metre factory, the salaries for the 104 employees, other costs, and also includes a margin for a contribution to profit.

It makes it even harder to justify the RRP.....

Kind regards

Russell
 

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This is certainly an interesting article, but the same goes for this as if you were reading any newspaper as far as figures go - don't believe everything you read.

However, this figure per car that Russell has stated does not include:

Shipping costs to distributors
Distributors markup
VAT
Shipping from Distributors to retailers
Retailers mark up
Retailers (if mail order) shipping costs

All these have to be taken into account

Aaron
 

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QUOTE (Russell Sheldon @ 9 May 2004, 17:26)"We are the only slot car manufacturers who do not produce in China, to be able to control things better,".................... "China would reduce our costs up to a 50% but we would not be able to attend to our clients expectations". This quality has resulted in his cars - up to seven or eight new models per year - being sold not only as toys, but also considered to be collectors item.

Excuse me while I pick my self up off the floor.


Only slot car company to NOT to outsource manufacture to China?
Quality?

About the only thing right here is the admission that FLY purposly builds shelf queens


I want some of the drugs this bloke is obviously on.

Cheers

Steve


PS. The story says the average car sells for 54 Euros. Assuming Russell has calculated the wholesale return of 31 Euros which would include all costs, that allows for an average mark up of 23 Euros.

PPS: Hey Aaron, do you have an alert set to pick up every post that mentions the word FLY?
(only jokin' sunshine)
 

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Cheers Russel for locating and sharing such an interesting article!

I can see socialistic advantages of not moving to china, and such a move might add complexity to the business structure required to maintain/improve QC and QA, and also a big upfront investment on training and new factories, redundancy pay for current fasctory workers etc, but the quality of product itself is not a reason.

Also - my new ninco porsche 911 says that it is made in spain, so the claim they are the only manufacturer not producing in china may not be quite true.

On the other hand - for the long term future of slot cars, its probably better that they are not all made in the same place - if in the future there is a diplomatic incident and a trade embargo with china, our slot car source would dry up! (and of course that is more important an issue than the ensuing 3rd world war or whatever)

PS - if the manufacturing cost is 31 euros, then the markup for retail to 54 is relatively small. A lot of industries have a manufacturing/retail ratio of 1:2 or more, here it is only 2:3.
 

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Try and imagine the slot racing world without Fly. Personaly I still remember the excitement of discovering the brand and pleasure of running my first Fly purchase.

On the issue of quality. If a car has a fault then I return it to the retailer. If it`s too exspensive then I don`t buy it. If it`s limited I try and get to see it in the flesh before I spend my hard earned. Overall Fly have done a cracking job and released cars that are not covered by other manufacturers and I race a fair few of mine and love them.
 

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A very interesting article - thank you Russell
Some interesting figures too

QUOTE 300,000 units are sold every year, netting 9,5 million euros in revenue.
later
QUOTE The average price is around 54 euros.

The first statement calculates out to €31.7 per car, approx 22.2 of the venerable British quids.
I really don't know what to make of the two sets of figures.

There are problems with words like 'netting' which could easily be taken to mean 'net profit to Fly' but could mean almost anything at all. Ability to mean almost anything is equivalent to ability to mean almost nothing, rather as wisely suggested by Gaugemaster!

300,000 units sold per year is a somewhat ambivalent figure.
Calculates to around 820 per DAY on a 365 day year.
Around 1,000 per day, allowing for a day off and a bit of a holiday occasionally.
But, are they numbers ex Fly factory gate or numbers actually sold by retailers?
These are not necessarily the same thing and are highly unlikely to take account of some massive price cuts that have been used to shift huge amounts of surplus stock that was discovered to be unsaleable at the original recommended price.

One casually wonders what proportion of these numbers are slot cars and what are the other miniature cars that Fly also makes.
No mention of the 1/43 statics - do they still make them?

QUOTE In 2002 he sold 315,000 units and last year, due mainly to the strength of the euro, sales were 290,000 units.
So, down by 8%, admitted.
Was it really due entirely to the strength of the Euro or some other form of sales resistance? High prices, already mentioned? Anything to do with the new Spanish cpmpetition from VMG and Spirit? Don't they manufacture in Spain too?
This year's figures (2004) will be interesting reading when they become available.

QUOTE he patented a system that consisted of placing a magnet in a particular part of the chassis that prevented the cars from continuously coming off the track.
Sorry, but I point blank do NOT believe that!

I don't expect answers to the points raised and would doubt the wisdom of believing them even if they were offered. They are just points to ponder and all rather interesting.
 

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Allan Wakefield
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QUOTE Try and imagine the slot racing world without Fly. Personaly I still remember the excitement of discovering the brand and pleasure of running my first Fly purchase.

I absolutely agree with jonnys here, I still remember the car that got me hooked (rather than just interested) it was a Fly Lister Storm and the detail and quality blew me away. Sure I have been one of the most prolific 'have a go at Fly' writers and still object to the wild pricing system. But lately they HAVE increased quality and out of the box readiness so all respect to them for listening. I am amazed at the numbers quoted - a lot higher than I assumed.

QUOTE QUOTE
he patented a system that consisted of placing a magnet in a particular part of the chassis that prevented the cars from continuously coming off the track.

Sorry, but I point blank do NOT believe that!

Patenting is alot different from inventing remember, for sure Scalextric for one (and maybe Carrera - thomas?) were using magnets in their cars before FLy hit the scene albeit much weaker ones
 

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DT
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I should add to Swissracer's text. I got back into the hobby only a couple of years ago with a Scalextric GT set with RMS, but it was the Fly Dodge Vipers and Chevy Corvettes that got me really hooked. So much so that I went out and bought a 1:1 Corvette just like my little 1:32 one. Fly are great (in general), but seem to annoy quite a few folk with issues that I'm sure could be addressed if they listened a little more with their ears instead of their accountant's calculators.
 

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Excellent article. Thanks for sharing this, Russell.

QUOTE There are also companies that order their own versions for commercial reasons. Approximately 25% of sales correspond to these special orders.
Approximately 75,000 cars each year are from special orders? Now I know why there are so many Special Editions from Fly...
 

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I can`t say that any of ther figures etc interests me. No not at all, I`m a slot racer and I enjoy the product and think that Fly have made a great contribution to the hobby.

I reckon it should be noted too that SF members certainly have benefited from the growing cooperation between SF and Aaron at Gaugemaster and points to an area in which we can benefit in the future with other brands. I would say stick to what we know about and let the `suits` concern themselves with the business of it all. Like somebody who ought to know said, `don`t believe everything you read`.
 

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QUOTE he patented a system that consisted of placing a magnet in a particular part of the chassis that prevented the cars from continuously coming off the track.

Of course this is laughable since many slot cars used a traction magnet before FLY, and the first such production slot car was made in 1973 by COX in California. The car was patented and my name is on the patent.
The truth is, Barrios got a Spanish design patent for this, and another about the 908 separate motor box that are not worth the paper they are printed on, because it would be very easy to defeat them in court in a simple pre-hearing. These patents are purely for design protection against a 100% knock-off or another company having the same idea and then suing FLY for infringement.
This reminds me of the German BBS wheel manufacturing patent on their 3-piece wheel design, which they stole fro the Chaparral when they saw the car in 1966 at the Nurburgring, and promptly made replicas. Later they tried to defend the patent in a Belgian court against a company called BHS that copied the BBS design, and they promptly lost when pictures of the old Chaparral wheel were introduced as evidence, The judge laughing them out of the court after a brown envelope mailed from the USA and containing said pictures suddenly showed up. Ooops.

So excuse me if I am smiling, and keeping a little COX car and a copy of the patents as future evidence in case FLY would go harass some poor small SOB just trying to milk the cow like everybody else.

For the rest, the article is pure media propaganda written by a typically ignorant journalist who had a choice in life between being a paper-filler at a local rag or a carabiniero. He made the wrong choice and should have trained in beating people with a stick instead, he might have been more successful.

However, the article will please the sheep out there.
Bee-hee-heeeeh!
I guess talking thrash about slot cars is better than not talking at all, so more power to Barrios, eh.

Dr. Pea
 

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mr pea - I find the facts in your reply about copyrights very interesting, but the tone is unfairly down on fly and mr barios. This is a NEWSPAPER article, and one on a slot car manufacturer which from the papers point of view is probably not thought of as the most serious topic or needed to be the most accurate.

Journalists want their articles to be interesting and sensational, words get rearranged, sometimes even stuff gets made up. I think the bigging up of the company has been done by the journalist rather than mr barios, or at least this is a massive possibility, so dont have a go at fly for stuff they havent said!

cheers

Dave
 

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QUOTE so dont have a go at fly for stuff they havent said!

I did not, please read again. I think that Barrios did a great job to kick Scalextric's butt and force them to improve their product, starting a revival of the hobby between 1997 and 2002. It's back to a down cycle now, but it has been like this for over 45 years so have no fear it will survive.
I think the journalist who wrote the story missed a good opportunity to show his brilliance. Ooops, he probably does not have any.
Best regards,

Dr. Pea
 
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