Mattel Inc., the world's largest toy-maker, has begun selling a miniature version of a Tesla Motors Inc. Model S as part of its Hot Wheels brand.
The toy car retails for $1.09, compared to about $100,000 for a fully loaded all-wheel-drive Model S P85D. The Hot Wheels version of Tesla's first car, the Roadster, is now a collector's item that can sell for $30 to $50. Investment potential aside, the die-cast models help introduce America's smallest and youngest publicly traded automaker to a generation of future car buyers.
"Tesla is a brand that resonates across a range of consumers, from collectors to kids," Chris Down, Hot Wheels senior vice president and general manager, said in an interview. "Everyone relates to the vehicles."
Mattel will take any sales boost it can get. The world's largest toy-maker is in turnaround mode after declining revenue and a sagging stock price led to the dismissal of Chief Executive Officer Bryan Stockton in January. He was then replaced by longtime board member Christopher Sinclair.
Of the company's major brands, Hot Wheels has been the only one growing. While sales of Barbie products, its largest business, tumbled 16 percent, Hot Wheels revenue rose 3 percent last year.
Founded in 1968, Hot Wheels has grown to become one of Mattel's most successful brands, with 300 million units sold in 2014. Down said the typical customer -- which he refers to as a "vehicle kid" -- is 3- to 7-year-old boys in the U.S., but Latin America and Asia now make up about half of the Hot Wheels market.
Mattel, based in El Segundo, Calif., also owns Matchbox, which is also offering a version of the Model S. Much like General Motors Co. has its mainstream Chevrolet brand and luxury Cadillac brands, Matchbox is seen as Mattel's utility line, while Hot Wheels is about pushing the limits of design and customization, Down said.
Mattel worked closely with designers from Tesla to develop the 1/64th scale Model S, which currently comes in two colors -- silver and red -- and is based on the P85D, Tesla's top-of-the-line, dual-motor performance version, complete with red-lined rims.
"Tesla designers came into our studio," Down said. "To a kid, it has to look like 'Wow, that is like a life-size Tesla Model S.'"
Hot Wheels produced around 1 million Roadsters in 2008, and fans of the Palo Alto, Calif.-based automaker have been angling for a toy version of the all-electric sedan for years. Phil Stillman, a Model S owner, asked Tesla Chief Executive Officer Elon Musk when there would be a Model S Hot Wheels at a Tesla users conference two years ago.
"I actually was wondering that myself," Musk replied.
The all-electric Model S is Tesla's second vehicle. Tesla will begin selling the Model X, a sport utility vehicle, in the next few months and is working on the more-affordable Model 3 sedan, scheduled for 2017.
Mattel doesn't have plans to produce a Model X or Model 3, but Down said it hopes to forge a "deeper, broader relationship" with Tesla.
SundayMonday Business on 06/22/2015