A Model Maker Responds - Thoughts from Autocult Co-founder Thomas Roschmann

For collectors, a scale model may look like a relatively simple product. It's a carefully researched miniature, produced in limited quantities, and shipped to enthusiasts around the world. Behind each model, however, is an increasingly complicated manufacturing process shaped by scarce specialist skills, rising costs, shifting trade policies, and a growing administrative burden.

For small manufacturers such as AutoCult, those pressures are becoming harder to absorb. The challenge is not any single problem. It is the accumulation of many of them, all affecting businesses that operate in a very narrow market and have little room to spread additional costs across large production volumes.

AutoCult co-founder Thomas Roschmann says that reality is important to understand—not as an excuse for higher prices or longer development times, but as an explanation of what it now takes to produce highly specialized collector models.

Moving production closer to home is not as simple as it sounds

One suggestion frequently raised by collectors is to move production from China to Europe. On the surface, the idea has obvious appeal. Shorter supply chains could reduce transportation concerns, provide manufacturers with more direct oversight and potentially lessen exposure to geopolitical uncertainty.

The difficulty is that the European manufacturing infrastructure needed for this particular type of product largely does not exist.

Europe certainly has a long history of model car production, but much of that history was rooted in toys rather than the highly detailed, limited-production collector models made by companies such as AutoCult today. As manufacturing migrated to Asia, the network of specialized suppliers, craftspeople, and production expertise developed there as well.

That creates a practical obstacle for a company the size of AutoCult.

“You cannot simply decide to produce somewhere in Europe if the people, skills, and suppliers for this kind of product are not already there,” Roschmann says.

Countries in Eastern Europe or the Baltic region may offer competitive manufacturing costs, but establishing production would require considerably more than finding factory space. Workers would have to be trained in specialized mold-making, resin casting, painting, assembly, and quality-control processes. For a small company, building that capability virtually from scratch is difficult to justify financially.

AutoCult has experimented with European production and has begun having some prototypes developed closer to home. That has produced encouraging results. European-made prototypes can give the company greater flexibility during development, while manufacturers in China can use those prototypes as the basis for production.

But even prototype work illustrates another problem facing the industry. Experienced model makers are increasingly difficult to find.

Highly skilled prototype builders are a limited resource, and their availability can become a bottleneck long before a model reaches the production line.

Cost and quality remain inseparable

AutoCult has also examined what full European production might look like. The economics, at least today, remain difficult.

Based on the company's experience, producing a comparable model in Europe could result in a retail price roughly 50 percent higher while potentially delivering somewhat lower quality than the established Chinese production network.

One experimental project reached that point and was ultimately abandoned.

The question then becomes one every manufacturer has to ask. Would collectors accept a dramatically higher price for a model that does not represent an improvement in quality?

Roschmann does not believe they would and he does not think manufacturers should expect them to.

That illustrates the balancing act confronting small model companies. Collectors understandably expect increasingly sophisticated models, but manufacturers must deliver that quality at prices enthusiasts are still willing and able to pay.

Unlike food, housing or transportation, collector models are discretionary purchases. Manufacturers know they are competing for money that customers do not have to spend.

“We make products nobody needs,” Roschmann says. “But for some people, they mean the world.”

That distinction matters. Passion creates the market, but passion does not make collectors insensitive to price.

There is little room left to simply raise prices

Manufacturers are being hit by many of the same inflationary pressures affecting other businesses, but small-volume producers have fewer ways to absorb them.

Transportation costs remain unpredictable. Trade and tariff policies can change quickly. Political uncertainty affects manufacturing and logistics. Meanwhile, new regulatory requirements continue to add costs that have little to do with designing or building a model.

Roschmann is particularly concerned about the industry's ability to continue passing those costs on to collectors.

In his view, stabilizing prices may become as important as introducing new products.

That does not mean prices will never increase. In some cases, increases are unavoidable. But continually raising retail prices risks shrinking an already specialized customer base.

For a manufacturer producing thousands—or sometimes only hundreds—of a particular model rather than hundreds of thousands, even relatively small increases in overhead must be distributed across very few units.

Regulation is becoming a surprisingly large part of the job

One of the least visible pressures facing small manufacturers is administration.

European packaging and recycling regulations are becoming more extensive. Germany is introducing additional digital invoicing requirements for business-to-business transactions. Companies are being required to exchange more information electronically with government agencies. Existing accounting and enterprise systems may need to be modified or replaced to comply.

Even infrastructure changes can become expensive distractions. Roschmann points to Germany's transition toward fiber-optic telecommunications as another example. Once service reaches AutoCult's location, the company may need new routers, telephone equipment and related systems.

For a multinational corporation, projects like these are handled by dedicated legal, compliance, IT and administrative departments.

At a small manufacturer, they often land on the desks of the same few people responsible for developing the products.

That opportunity cost can be substantial.

Roschmann says there are periods when administrative responsibilities leave him almost no time for the part of the business that originally motivated him: researching automotive history and developing new models.

That may be one of the most important challenges facing small specialty manufacturers today. The people who understand the product best increasingly spend their time on work that has nothing to do with the product itself.

Some traditional concerns are less significant than they appear

Not every perceived supply-chain risk is equally serious.

For example, collectors sometimes worry about resin models being exposed to high temperatures during ocean transportation. Roschmann says properly manufactured resin should tolerate those conditions without difficulty.

AutoCult has displayed models in showcases exposed to direct sunlight for several hours each day without seeing deformation or other effects. Models are also protected inside shipping cartons during transportation.

“If the resin work is done correctly, heat during transportation should not be a problem,” he says.

For AutoCult, therefore, the larger concerns surrounding overseas manufacturing are not temperature but economics, available expertise, capacity, and the long-term stability of the production environment.

A niche industry trying to remain a niche industry

There is an understandable tendency to look at these problems from outside the business and see seemingly straightforward solutions: move production, change suppliers, increase prices, or manufacture locally.

In practice, every option involves tradeoffs.

Small model manufacturers cannot command the production volumes of mainstream toy companies. They cannot easily build new manufacturing ecosystems themselves. They cannot indefinitely absorb higher costs, but neither can they assume collectors will tolerate unlimited price increases.

The companies most likely to endure may therefore be the ones that resist trying to become something they are not.

For AutoCult, that means remaining focused on unusual vehicles, limited-production models, and the automotive stories behind them.

Roschmann says the company's priority remains history. The models are the means through which those stories are preserved.

That passion does not eliminate the commercial realities surrounding the business. If anything, it makes them more frustrating. Every hour spent navigating a new regulation, replacing an IT system, or recalculating transportation costs is an hour not spent researching the next vehicle.

Still, Roschmann has no interest in presenting AutoCult as a company with all the answers.

The objective is considerably simpler: continue making the models the company believes deserve to exist, maintain the quality collectors expect, and keep them affordable enough that enthusiasts can continue enjoying them.

In today's environment, accomplishing those three things at the same time is becoming one of the industry's greatest challenges.