Why such a large price difference between Lionel and MTH Reading T-1 locomotives?

Landsteiner posted:

"And I bet that the detail is just as good as the new Lionel tooling"

And it had PS2 and a free battery inside every loco .  The new one has PS3 and no battery, which is sad, but the realities of modern economics.

Simple enough.  If you are charmed by DCS, the MTH loco makes sense.  If not, or you are charmed by Legacy, the Lionel loco makes sense.  If you wind up amongst the 1-5% of consumers needing service, the Lionel loco makes sense as well, based upon most people's experience with post-purchase service.  Some folks think the Lionel sound system/speakers are substantially superior, some do not.  Some like MTH smoke units better.  Not worth getting all exercised about in my view.  Strictly personal preference.  Not a moral, religious, political or earth shaking issue I'd think.

I live in MD.  MTH is 30 minutes away.  I have brought one new locomotive there for service after a problem with the tether.  MTH called me the next day to say they replaced it and to come pick it up.  This was last year in 2015.  Loco perfect since.

Lionel service is also excellent in my experience.  

People like to complain but my reality is that the only problems I have experienced are with non-dealer purchases, particularly several on this forum (random, I know).  New in box Lionel and MTH is pretty good in my experience, and in the rare instance there is an issue I have little doubt either firm would rectify the issue promptly.

Go with what you like.  For me, I don't understand the hand wringing about Lionel's pricing.  Like a bunch of grouchy old ladies.  (With the caveat that I enjoy David's commentary as insightful re the business; much of the bickering we could do without.)  A long way of saying like it and can afford it?  Buy it and enjoy.  Think MTH is better deal?  Order that.  Better yet, enjoy what you have and work on the layout rather than reducing the hobby to binge consumption /hoarding.   This forum is a questionable influence in that regard.  Having grown up in the hobby in the 1970s and 1980s, I am blown away by the choice we have today and I am thankful for it.

phillyreading posted:

Mikado 4501 posted:

Paul,

Judging by Lionel's shipping pattern in the past 2 years, expect it to be out during the Thanksgiving or Christmas season this year.

Judging from Lionel's past catalog issuing of items, I would give this engine a 50% chance of ever being produced! I don't pre-order because you never know if it will be made!!

Lee Fritz

Lee,

     What exactly are you referring to? In my opinion Lionel seems to be producing every engine they have put in their recent catalogs since the introduction of the BTO program and most within a year of being introduced in the catalog. I could have missed something but don't recall any major cancellations.

JohnB

What I love about the beginning of this post is how some folks know what molds are being used, when they were made, who owns them, how much they cost and how much they contribute to the cost of the engine.  I wish I knew where I could read all this information to get educated.

I also love how one specific MTH basher even alluded that maybe MTH mold is from 1990.  WOW!  You do realize these dies wear out right?

Wouldn't it be funny if these molds where actually used by both manufactures, with minor tweaks?  We already know other smaller manufactures share facilities in China.

If you repair enough of both manufacturer's engines you start to wonder... some parts or components are so similar/same.  G

Its really anyone's guess whether the new Lionel T1 will be more detailed than the Premier version...the features are what's important in my price comparison. I actually prefer the DCS handheld controller over the Legacy Cab II (thumbwheel and readout over dial and speed graph) but whistle steam effect and kinematic drawbar are selling points for the Lionel model. The fact remains that the street price of $1,399 for a non-articulated steam locomotive is a new all-time high in die-cast O-gauge, it gives me a sinking feeling in my stomach paying that much.

I noticed the T1 is NOT a BTO item...although from the Milw. Rd. S-3 experience I suppose if we want one we should pre-order.

Paul Kallus posted:

...

I noticed the T1 is NOT a BTO item...although from the Milw. Rd. S-3 experience I suppose if we want one we should pre-order.

Paul, if you're referring to Lionel's new T1, it IS a BTO item according to the 2016 Signature Catalog.

As for the $1350+ street-price for a non-articulated locomotive, I agree it'll leave more and more of us just observing from the sidelines.  OTOH, we'll also hear from folks who plan to order one of each road-number.    And the latter group will give Lionel all the reason it needs to do this all over again in the next catalog. 

David

 How quickly folks forget. I recall the lowest preorder price on the VL hudsons to be at $1367 from JT, everyone else was higher , that was what, 6 years ago?. IMO, the 100 year old tooling left much to be desired, swinging bell or not.

It certainly isn't cheap, but if Lionel pulls out all the stops on the tooling and sound package it should be a better buy than the VL hudson.

 FWIW Lionel is sponsoring the Fire up 2100 campaign : Lionel Teams With American Steam Railroad

It probably doesnt justify the cost, but its certainly a positive thing that Lionel is helping to promote the restortation of the prototype.

If you can't sell 1000 customers a $400.00 item, then sell 400 customers a $1,000.00 item. Works for me. Tulip bulbs anyone?

GGG posted:

... Wouldn't it be funny if these molds where actually used by both manufactures, with minor tweaks?  We already know other smaller manufactures share facilities in China.

If you repair enough of both manufacturer's engines you start to wonder...

I forget when I originally posted this thought.  But long before we heard the sordid details of today's toy train manufacutring landscape, I often joked tongue-in-cheek that there was only ONE Chinese factory pumping all this stuff into the market.  And each week, that factory would hang a different "Welcome" sign for the importer visiting town that week.  

Perhaps that was much closer to reality than we all wanted to believe!  

David

Rocky Mountaineer posted:

MTN posted:

...  I'm pretty sure you'll soon receive a lecture on Lionel's pricing structure - I hope I'm wrong, but it seems to be a pretty dependable phenomenon.  ...

Paul -- nor anyone else here -- needs to be "lectured" on Lionel's pricing structure.    It is what it is.  Lionel prices things with pride up in the stratosphere because they can, and enthusiasts pay the prices anyway.

The new Vision Line GG-1 has a $1190 MAP with a $1399 MSRP.  Today I visited a large LHS in Southeast PA, and they had 3 Lionel JLC-class GG-1's on display:  two at $610 (pre-owned but otherwise in Mint/LN condition), and one brand new at $650.   I also saw  a brand new MTH premier single-stripe GG-1 w/PS3 "on sale" for $450.

Are folks gonna order the new VL GG-1 at $1190?  You bet. 

That exact same scenario will play out repeatedly for every other big ticket item as well.  And those items all make the exact same journey starting roughly 9,000 miles away on the other side of the world. 

David

Why the eye roll?  The fact is, there's a steady stream of threads started or steered toward that very subject concerning Lionel and how they choose to price their trains.  I think we all agree Lionel makes a very expensive product - they always have, and most likely will continue to do so.  I find their pricing mighty high, and I choose not to purchase their products.  MTH makes toy trains I find overpriced, and 3rd Rail is too much for me to justify buying as well.  All trains are an expensive purchase - someone will inevitably cost the most, and that has traditionally been Lionel.  It may eventually bite them in the buttocks, but that point evidently hasn't been attained.

Wellspring holds onto Lionel - they must be making money at a rate that justifies their continued ownership of the brand.  They'll dump Lionel if the profits don't meet projections/expectations.  As noted in a post above, Lionel seems to be the only brand spending significant money on cutting new dies across their entire product line - O scale, traditional toy sized O, S scale and traditional Ameican Flyer.  No other brand is doing that at this time on the level Lionel is spending on product development.

In this particular instance,  the Reading T-1 is a one railroad engine that affords an opportunity to receive different paint jobs that are reality based because of fan trip operations.  First run sales will in theory cover the costs to cut the dies, then the hope is that a later 2nd run will make some profit years down the road.  They are paying more (probably a lot more) than MTH did for their molds from 5-10-15 years ago. MTH seems to be holding pat on new US steam - they have the good fortune of being in the profitable 2nd and 3rd runs of their models.  

For the asking price, I fully expect Lionel's new model will be a more realistic representation of the Reading engine.  Lionel has folks in product development that have been responsive to suggestions to make their models as accurately as possible - additional research to make models as realistic as possible adds costs to the final product.  Could MTH cut dies today and not have to raise their pricing closer to Lionel's pricing due to the higher cost of labor in China?  3rd Rail is bringing in brass steam engines that are one shot items; Scott Mann has related the troubles he faces finding reliable builders who don't change the rules and jack up their pricing with every project he wants to have produced. He has to sweat every project as he doesn't have a full line to cushion the blow of a deal that loses money, or turns out not being produced to his standards.

Lionel drives the market; they are the most consistent innovators in the O gauge field.  It would be hard to argue that they don't have prices that are climbing at rates that don't make sense to many of us here.  It's very possible they're reaching price points that folks will draw the line at and stop buying Lionel products.  If that occurs, Wellspring will reassess their strategy and determine if they keep or sell the Lionel brand.  They're pumping money into Lionel, and that keeps the O gauge market moving forward as far as variety and scope of product is concerned.  None of us has any idea what Wellsprings' long range strategy for Lionel is, but it's doubtful they're tying up capital in a company that's not making them a good return on its investment.  That's the end of my Reading Ramble - I promise to put a choker collar on my thoughts on the subject of pricing strategy from this point forward...  ��

Paul Kallus posted:

.... The fact remains that the street price of $1,399 for a non-articulated steam locomotive is a new all-time high in die-cast O-gauge....

 

Yep...they're in brass territory.  A lot of die-cast steam has been for some time. 

My dollars will go to my brass collection.  I won't be buying any more die-cast and I know the manfs won't be affected by that decision-reality/opinion. 

Just remember most of the time you get what you pay for.

Lionel Vs MTH price wise, you will always pay more for Lionel, they don't make as many top of the line engines. MTH makes a lot more, and that's one reason why you can always find MTH for less.

I think Legacy is worth the extra money, how much extra, well that depends on how bad you like it and how bad you want it. 

If you got the cash go with the best if you don't got the cash go with the second best!

maint posted:

Just remember most of the time you get what you pay for.

Lionel Vs MTH price wise, you will always pay more for Lionel, they don't make as many top of the line engines. MTH makes a lot more, and that's one reason why you can always find MTH for less.

I think Legacy is worth the extra money, how much extra, well that depends on how bad you like it and how bad you want it. 

If you got the cash go with the best if you don't got the cash go with the second best!

LOL,  There are some who think otherwise...

Joe

MTN posted:

Wellspring will reassess their strategy and determine if they keep or sell the Lionel brand.  They're pumping money into Lionel, and that keeps the O gauge market moving forward as far as variety and scope of product is concerned.  None of us has any idea what Wellsprings' long range strategy for Lionel is, but it's doubtful they're tying up capital in a company that's not making them a good return on its investment.  That's the end of my Reading Ramble - I promise to put a choker collar on my thoughts on the subject of pricing strategy from this point forward...  ��

Last I heard Lionel is owned by Guggenheim Associates., not Wellspring.   They're a brutally tough investment company that could eat Wellspring for lunch..

Joe

Joe, you are of course correct:

"Last I heard Lionel is owned by Guggenheim Associates., not Wellspring.   They're a brutally tough investment company that could eat Wellspring for lunch.."

Which made me think, maybe Lionel is doing better than we expected. With a company like Guggenheim pulling the strings, if Lionel was on the ropes, as a few people on this forum believe, than Guggenheim would have certainly made changes (marketing, pricing, operations, manufacturing etc.) by now. No changes, so they must not be doing poorly.

Maybe the whole "Lionel prices things with pride up in the stratosphere because they can, and enthusiasts pay the prices anyway" is just a bunch of BS... but we all knew that.

Charlie

Rocky Mountaineer posted:

Paul Kallus posted:

...

I noticed the T1 is NOT a BTO item...although from the Milw. Rd. S-3 experience I suppose if we want one we should pre-order.

Paul, if you're referring to Lionel's new T1, it IS a BTO item according to the 2016 Signature Catalog.

As for the $1350+ street-price for a non-articulated locomotive, I agree it'll leave more and more of us just observing from the sidelines.  OTOH, we'll also hear from folks who plan to order one of each road-number.    And the latter group will give Lionel all the reason it needs to do this all over again in the next catalog. 

David

Dave, I didn't the see the "BTO" for the T1...whereas the diesels and select other steamers have it...didn't notice it on the GG1's either.

JC642 posted:

Last I heard Lionel is owned by Guggenheim Associates., not Wellspring.   They're a brutally tough investment company that could eat Wellspring for lunch..

...

That's the one area I gotta give Lionel's C-level executives much credit and kudos.  If you've never had to deal with investment personalities , let me just say they can be a real bear to work with.  EVERYTHING is bottom line dollars and cents, and that's what makes them tick.  Most of them probably wouldn't know the difference between a Vision Line ES44 and a LionChief switcher -- at least not in the sense that we as model train enthusiasts "live and breathe" this stuff.  Most of us here would struggle immensely to find common ground over topics to discuss during a lunch or happy hour with these guys.  It's the one part of Corporate America I don't miss in the very least.  It takes a special skill for somebody to walk the middle ground between the one-track-mind business/investment type(s) and the consumers who are passionate about products they want to purchase.  Very few folks could probably do that job justice.  So my hat is off to anyone who can -- much less anyone who even enjoys doing it. 

David

86TA355SR posted:

Paul Kallus posted:

.... The fact remains that the street price of $1,399 for a non-articulated steam locomotive is a new all-time high in die-cast O-gauge....

 

Yep...they're in brass territory.  A lot of die-cast steam has been for some time. 

My dollars will go to my brass collection.  I won't be buying any more die-cast and I know the manfs won't be affected by that decision-reality/opinion. 

And custom-made brass steam locomotive models have details better than die-cast and are hand-made and equipped with sprung drivers.

I just checked the Lionel catalog - the latest SP GS-4 also has a MSRP of $1,699. At least I don't feel like us Reading fans are getting hosed, LOL.

Paul Kallus posted:

...

Dave, I didn't the see the "BTO" for the T1...whereas the diesels and select other steamers have it...didn't notice it on the GG1's either.

Paul, look closely... Sometimes the BTO banner is on the facing page of the product page-spread.  And it's there for an increasing number of big-ticket items this year.  Most of the dealer price-lists also have the BTO products flagged as such too.

David

RickO posted:

 How quickly folks forget. I recall the lowest preorder price on the VL hudsons to be at $1367 from JT, everyone else was higher , that was what, 6 years ago?. IMO, the 100 year old tooling left much to be desired, swinging bell or not.

It certainly isn't cheap, but if Lionel pulls out all the stops on the tooling and sound package it should be a better buy than the VL hudson.

 FWIW Lionel is sponsoring the Fire up 2100 campaign : Lionel Teams With American Steam Railroad

It probably doesnt justify the cost, but its certainly a positive thing that Lionel is helping to promote the restortation of the prototype.

Wow, I didn't know that. I recall the VL Hudson came out when I was working a contract job and traveling quite a bit for work, so I was out of the game for that one. Did they really use the old tooling - I've only seen 2nd-hand pictures of the model, and if recollection is right it wasn't as crisp as some of the new die-cast models. I would like to see it in person, and would love to get a state-of-the-art Hudson some day, but the T1 is on the radar for the foreseeable future.

Paul Kallus posted:

Wow, I didn't know that. I recall the VL Hudson came out when I was working a contract job and traveling quite a bit for work, so I was out of the game for that one. Did they really use the old tooling - I've only seen 2nd-hand pictures of the model, and if recollection is right it wasn't as crisp as some of the new die-cast models. I would like to see it in person, and would love to get a state-of-the-art Hudson some day, but the T1 is on the radar for the foreseeable future.

I seems most here have a different definition of "State of the Art". To me, given the current state of the art, that Hudson would be built by Kohs and have all the Vision features that could be crammed in there. Unlikely to come down the pike anytime soon so pick your compromises.

Pete

JC642 posted:

maint posted:

...

If you got the cash go with the best if you don't got the cash go with the second best!

LOL,  There are some who think otherwise...

I'd say there are LOT of folks who think otherwise. 

maint posted:

Just remember most of the time you get what you pay for.

Lionel ... they don't make as many top of the line engines. ...

You've obviously missed the whole front section of the 2016 Signature Catalog.  It's ALL top-of-the-line stuff... GG1's, Allegheny's, GS-4's, T-1's, SD90MAC's, etc... -- and that's just off the top-of-my head.  Not to mention Lionel is offering multiple roadnames and/or road-numbers for just about all of those locomotives.  Years ago, we'd see ONE GS-4 offered.  Now there's FOUR, plus a FIFTH for the AFT! 

David

Paul Kallus posted:  Did they really use the old tooling - I've only seen 2nd-hand pictures of the model, and if recollection is right it wasn't as crisp as some of the new die-cast models. I would like to see it in person, and would love to get a state-of-the-art Hudson some day, but the T1 is on the radar for the foreseeable future.

Yes, it was discussed at great length on the forum if you do a search.

While a great sounding and great running locomotive, it could have been far more impressive had Lionel used their unstreamlined J3a tooling.

Not nearly the loco and tender detail you wouild expect, basically an old casting with extra piping added. Kind of a "retro Lionel hudson tribute" thing

JohnB posted:

phillyreading posted:

Mikado 4501 posted:

Paul,

Judging by Lionel's shipping pattern in the past 2 years, expect it to be out during the Thanksgiving or Christmas season this year.

Judging from Lionel's past catalog issuing of items, I would give this engine a 50% chance of ever being produced! I don't pre-order because you never know if it will be made!!

Lee Fritz

Lee,

     What exactly are you referring to? In my opinion Lionel seems to be producing every engine they have put in their recent catalogs since the introduction of the BTO program and most within a year of being introduced in the catalog. I could have missed something but don't recall any major cancellations.

JohnB

 

It was a few years back, maybe even up to 10 years ago, but Lionel was putting things in their catalog and then they never made them, like some steam engines. Lionel is not the only company to do that but I remember them doing it.

Lee

Paul Kallus posted:

86TA355SR posted:

Paul Kallus posted:

.... The fact remains that the street price of $1,399 for a non-articulated steam locomotive is a new all-time high in die-cast O-gauge....

 

Yep...they're in brass territory.  A lot of die-cast steam has been for some time. 

My dollars will go to my brass collection.  I won't be buying any more die-cast and I know the manfs won't be affected by that decision-reality/opinion. 

And custom-made brass steam locomotive models have details better than die-cast and are hand-made and equipped with sprung drivers......

 

You've saw the Light my friend!  Welcome to a new world.

Rocky Mountaineer posted:

Paul Kallus posted:

...

Dave, I didn't the see the "BTO" for the T1...whereas the diesels and select other steamers have it...didn't notice it on the GG1's either.

Paul, look closely... Sometimes the BTO banner is on the facing page of the product page-spread.  And it's there for an increasing number of big-ticket items this year.  Most of the dealer price-lists also have the BTO products flagged as such too.

David

Dave - I don't see the BTO banner in my hard-copy, but I'll take your word for it that is BTO!

phillyreading posted:

JohnB posted:

phillyreading posted:

Mikado 4501 posted:

Paul,

Judging by Lionel's shipping pattern in the past 2 years, expect it to be out during the Thanksgiving or Christmas season this year.

Judging from Lionel's past catalog issuing of items, I would give this engine a 50% chance of ever being produced! I don't pre-order because you never know if it will be made!!

Lee Fritz

Lee,

     What exactly are you referring to? In my opinion Lionel seems to be producing every engine they have put in their recent catalogs since the introduction of the BTO program and most within a year of being introduced in the catalog. I could have missed something but don't recall any major cancellations.

JohnB

 

It was a few years back, maybe even up to 10 years ago, but Lionel was putting things in their catalog and then they never made them, like some steam engines. Lionel is not the only company to do that but I remember them doing it.

Lee

Lee,

     Thanks for the insight. I think if you go through the last four Lionel catalogs and check off what has been produced they have a pretty good batting average.

JohnB

Paul,

Some dealers like CT McCormick Hardware and TrainWorld indicate that the T-1's are BTO. Guess it slipped or something.

Manufacturers make money, that 's the job. They build state of the art product. Simply supply and demand and BTO economics allows them to know the demand, manage the supply chain. Then they set price. You as the consumer make the choice. Your money talks.

Stop the constant complaining about price, if you don't like it don't buy it. If you like is buy it. If you don't want to buy it then wait and see what happens in 2 years when you really want it - Could be a better price or higher - a crap shoot. I like BTO and am willing to pay for it why? It's not a car that depreciates the second you sign the papers. This is a hobby and most folks that are in it that pay premium prices like the fact that their are limited units produced. The effort is to retain value, keep dealers in business and not have the same result of what many CCI & CCII club members experience - Instant devaluation of premier products when thy flooded the market with different road numbers.

Cost structure at Lionel is completely different than MTH. You forget that warranty, people, facilities, design, development,  non reoccurring engineering costs, new tooling which is clearly indicated drive up price. New tooling requires investment that is packed into each unit as they need to amortize that cost over the expected number of units sold.

David has it correct. Price is Price is Price. 

Paul Kallus posted:

Rocky Mountaineer posted:

Paul Kallus posted:

...

Dave, I didn't the see the "BTO" for the T1...whereas the diesels and select other steamers have it...didn't notice it on the GG1's either.

Paul, look closely... Sometimes the BTO banner is on the facing page of the product page-spread.  And it's there for an increasing number of big-ticket items this year.  Most of the dealer price-lists also have the BTO products flagged as such too.

David

Dave - I don't see the BTO banner in my hard-copy, but I'll take your word for it that is BTO!

Paul, that's interesting... good catch.  My hard-copy doesn't have the BTO banner either for the T-1's.  But it's there in the online copy on page 43 -- right between the whistle-steam banner and the listing of different T-1 models.  And all the dealer price-lists have it marked as BTO also.  So that's what I was going on.

David

There are two factors that always present when a manufacturer determines the cost of their product.

1) Cost of manufacturing?

2)What will the market bear?

Scott Smith

My question would be more like:

If I were going to strip out all of the electronics and smoke, and convert it to 2-rail, which would be the more accurate model?  Does Lionel make round boilers under those skirts, or is it empty in there after I remove the goodies?

I did that with the FEF, and indeed with the exception of a strange front boiler mounting arrangement, (and of course the side rods) the locomotive meets my standards for accuracy.

Looks a lot like a Ford vs Chevy vs Dodge argument.  Most of their supplier parts/components come from the same auto industry suppliers.

Bill Cantrell posted:

Looks a lot like a Ford vs Chevy vs Dodge argument.  Most of their supplier parts/components come from the same auto industry suppliers.

Yeah, this topic has brought out the brand loyalists and grouches...and you make a good analogy on the auto industry - although I wouldn't buy a Dodge, LOL. Only a few people were able to offer rational replies, which is what I asked for in the original post.

Given my experience running both Legacy and Premier steamers it comes down to the two innovative features I cited earlier and whether am I willing to pay handsomely for them. I am glad we have both MTH and Lionel though - if there wasn't competition we could be looking at $2,000 rigid-framed steamers, and the hobby would shrink even more to an ever-decreasing demographic.

bob2 posted:

My question would be more like:

 Does Lionel make round boilers under those skirts, or is it empty in there after I remove the goodies?

 

On a few like the JLC's, yes.    On most others no.   The one engine that has been a point of contention on this thread,  the newly cataloged reissue of the 0-8-0 switcher does have a fully enclosed boiler with piping detail on the underside..   Its a beautiful well detailed model..   Except & unfortunately, Lionel's decision to take a step back to the 90's and replace the wireless tether with an ugly wired snake takes away every visual advantage the enclosed boiler brings to the party..    At $900.00 , IMO, they should rethink that bad decision. 

Joe  

MTH works just fine for me....I think that Lionel is simply over-priced