Hot Wheels Immediate Success and Impact on Matchbox

The Matchbox brand of cars dominated the die-cast toy car industry for decades. In fact, they had no real competitors during their reign as the only prominent die-cast toy car maker. That is until Mattel introduced their line of Hot Wheels in 1968 and had immediate success. Matchbox’s sales in America dropped from $28 million to $6 million following the introduction of Hot Wheels. There are a number of reasons why Hot Wheels had such an immediate success.

                The first and primary reason for Hot Wheel’s overnight success was the wheels. Co-Founder of Mattel, Elliot Handler, had created new wheels that are described as ‘friction-less.’ These new wheels allowed Hot Wheels cars to race at up to 200 mph (for the scale of the car). These ‘hot’ wheels allowed Mattel’s line to quickly surpass all competitors, both car to car and sales to sales. Children simply enjoyed having a toy car that ran much faster down the plastic track.

                Hot Wheels also had a great advantage starting out. The Lesney company (forerunner to Matchbox) started from scratch with a condemned building, limited funding, and grew out of a die-casting company’s slow season. Hot Wheels came from already well established Mattel. Mattel was the leading company in many toy categories and had highly successful lines of toys like ‘Barbie’ and ‘See N Say’. In fact, when Mattel introduce Hot Wheels, they did so with a $10 million advertising campaign. Hot Wheels also had an advantage in the production of their cars. They had their models build in places like China and the Far East, where labor costs were significantly less than in England, where Matchbox originated.

                Another huge factor that led to Hot Wheels success in America was the fact that it was an American company. Hot Wheels initial success was limited to the United States and sent Matchbox sales in America plummeting as stated earlier. Matchbox was able to maintain a foothold in the die-cast toy car industry due to its worldwide sales.

                Hot Wheels also became widely popular immediately because of the models they chose to produce. Matchbox had primarily produced their cars years after the actual car or vehicle was produced. Hot Wheels primarily used the designs of the American made muscle cars and hot rods of the fifties and sixties. They also tended to customize the cars the way many car enthusiasts did in Southern California, with the rear end jacked up and flames or other graphics painted on the body. These design characteristics helped Hot Wheels succeed in America because kids could now race around the living room with the cars they saw on the streets and their older siblings drove.

                In 1969, a year and a half after Hot Wheels were introduced, Matchbox themselves came out with faster wheels and more contemporary models. Matchbox and Hot Wheels then remained neck and neck in the toy car world for many years. It wasn’t until the 1990’s the Hot Wheels began to pull away from Matchbox and become the clear industry leader.