Competition Works Both Ways!

David,

But I'm also wondering if Lionel's dealer "street price" for these cars in 2012 gave MTH the incentive to BOOST the price of THEIR cars a bit to the point where the difference is pretty negligible?

The only thing I can think of is why would MTH raise their price?

I would think the lower price would get them more sales, but then again maybe they're only thinking of die-hard MTH fans that would buy their product regardless of the increase.  Someone who buys all brands (or a newbie looking to getting into O scale) would almost certainly look at the price as one of the top 3 reasons to buy.

But...my mom used to work at the old Zayres store in town back in the 60s.  She said when they announced a sale they would actually increase the price on some items , because most people wouldn't notice.  Of course that's a much bigger audience than our little O scale world and most of us modelers seem to remember things like what an item cost 10 catalogs ago (and I can't remember where I put my wallet last time I laid it down).

The Lionel racks are full o scale and MTH's are not. So you are comparing apples to oranges. The MTH racks are close to scale and a great alternative of which I have. But yes the prices are going up but I have paid in the mid 50's for the MTH racks just a couple of months ago. Decent prices are out there if you look.

Don't forget that MTH Upgraded their autorack with separate wire grab rails and correct truck placement back in 2009.

Note that MANY of the Lionel Paint schemes on thier yet to be released autoracks are INCORRECT! the lionel racks seem to model older 1970's to late 1980's autoracks from paragon so paint schemes like Conrail Quality and UP "we will deliver" and BNSF Heritage 1 schemes are incorrect for an older designed rack. the MTH racks are more modern and lated from the 1980's to the turn of the century so many of their paint schemes are correct for thier rack. the only MTH issue is they seem to be fixated on the newer TTX 1992 to current logo on thier "flat cars" for those autoracks and thus not necessarily correct for some of their paint schemes.

So I guess the real answer to "why" the prices are going up is....because they can (and know folks will still pay the price).

My recommendation is: if you want an accurate model above all else, do your homework and don't pre-order anything.

To get back to the issue of "why" the price increases: the cost of doing business in China is going up, affecting both Lionel and MTH. It may well be that MTH is using Lionel's pricing as a cover to raise theirs, but both of them are facing major increases in labor and other costs in China. Also the renminbi (yuan) has appreciated about 30% against the dollar in the past five years, thereby increasing the dollar costs of all Chinese inputs. MTH may have an advantage in that they own or control their China facility, while Lionel is contracting out. 

Hardly apples to oranges... more like comparing two brands of apples.  True that MTH's version isn't 89-foot like Lionel's, but so what?  Most folks here have layouts that can't even accommodate MTH's model well much less Lionel's.

The point I was simply making is that MTH had been passing along incremental price increases every couple of years -- most likely reflecting the increased labor costs in Asia.  Then between 2012 Vol 2 and 2013 Vol 1, they pass along a $10 increase?  Just when Lionel begins offering a similarly styled product for more $$$.  Coincidence, right?  As someone else stated, MTH is probably bumping the price-point here simply because now "they can". 

As for picking up MTH auto carriers from the past couple of years in the mid-$50's... sure, most reputable dealers will still offer attractive prices for them.  Only the shadier sellers will bump prices for the older units to match the price of the latest units due for delivery in 2013.

Perhaps, this will provide an explanation folks can understand, courtesy of Arlo and Janis:

Rusty

Thank you for the illustration, Rusty!!! 

David