Design
Matchbox brand toy cars are modeled after real and existing car models that are or were on the market; one can theorize that the brand's name came from the fact that the toys were originally matchbox-sized models of real vehicles. Hot Wheels cars were designed for flair--not to resemble real cars but to inspire imagination with cars that appear exaggerated for coolness and may even seem out of this world in appearance.
History
Mattel originally marketed the Hot Wheels cars in 1968 as a follow-up to their popular Barbie dolls. The Hot Wheels cars were originally aimed at young male consumers but would eventually come to be collector's items. Matchbox cars have been sold in England since 1953; at first, the two were first viewed as competitors. In 1996, Mattel gained ownership of both brands of cars after purchasing the Matchbox brand from Tyco.
Real Life
Hot Wheels cars, though extravagant in design, have inspired scale-car designers to create life-size working models of the cars to market to consumers. The "Whatta Drag" and "Twin Mill" models are examples of Hot Wheels cars that designers turned into working vehicles. Matchbox cars are still inspired by real working vehicles.
Hot Wheel Specialties
Because the Hot Wheels cars are not based on real cars, they can often be made for a company's special promotions. McDonald's and General Mills are examples of companies that Hot Wheels has made cars for.
Matchbox
Considering all the imaginative cars the designers of Hot Wheels have created, Matchbox cars may seem boring in comparison; but when realism is needed, Matchbox cars are readily available. Because these cars are based on actual cars, they may have more of a value as collector's items.