is the bubble due to burst?

Yes and this makes for a healthy market. Healthy markets have wide range buyers in any age groups. Art and coin markets are very healthy and have this characteristic while the stamp and 18th century furniture market has an older demographic and is not as healthy.

I remember the late 80's bubble and made some money at the top of that market. This time it may be different with a slower decline as fewer younger buyers enter the market. Keep in mind that this market is a very thinly traded market with 100 or less important cars selling each year.

 

Looking at the Amelia Island auctions these words ring true.
The Dinos have pulled back and pricing is a third down from the highs

 

I believe none of the Dinos at Amilia were flairs and chairs that were breaking the bank as of late. A GT sold for $230K, a GTS for just over $300K and another GTS at $363K. Hardly a pull back.

Geno

 

My point is that when the crash comes, it will come with Dino's first. $363K is getting to Daytona territory. IMO -- nutty.

 

Yes, the rocket-like trajectory of the modern art market is seemingly fueled by new money and young buyers. The fascinating socio-cultural question is: will today's 20-30 yr olds be into cars or not? I seriously doubt many investors buy Ferraris for 100% purely financial reasons. Investment return may be the 'accelerant' but I'm betting most have some latent car passion burning somewhere inside. Cars are just too much hassle to own vs other assets.

So is Car enthusiasm is on the wane? look at how slim your monthly copy of Road & Track has gotten, and sorry, the Euro Tuner/Drift crowd won't ever be a factor.

Guys like Sheehan have observed there is little vintage car fervor in China; their nouveau-riche want the latest model.

So I wonder what is driving demand here; is this the last hurrah as the last baby boomer enthusiasts see their last chance to own the dream car of their youth? Feels more like that than a broad based swelling of demand, but auctioneers who know the bidders would know, I guess.

I bought my GTC in my 40's and wimped out after making a deposit on a 330GT when I was in my 20's, but I was born in 1960 so don't count as representative of the next generation.

 

The Gooding GTS that sold was in fact a chairs and flares car. The other Gooding GTS apparently fell well short of the reserve and the lower estimate. Of the RM Dinos none sold in auction. The GTS sold post auction at 302.5k.

 

One of the problems with cars is the functional utility issue. The older these cars get the less utility use they have. In the 80's I used my Lusso and OSCA as daily drivers in NYC and North Jersey. I like to drive my cars and when they got to be worth too much to drive and I was worried every time I took them out. At the time there was some vintage racing but due to certain factors it was not very safe so I sold the cars. ( Vintage racing is much safer these days) For me the utility factor was gone. I will say a recent drive in FL traffic with a Daytona was not so much fun either.

So with the marginal utility of mostly taking the car to car shows and the occasional rally there is not that much bang for the buck out side pride of ownership. I am kind of out of the vintage market and do not think I will come back. I keep thinking about getting a 166 or 212 Inter but at these prices I do not think so even though I can afford the car now a lot more than I could in 1983.

 

The yellow 275GTB/4 was apparently bought by a HK Chinese collector. Unsighted !

 

I made a run at the black Dino GT. Steve Cantera and I discussed it at the event. I liked it but the black paint was bad - a lot of checking, lines and spot blobs visible under direct sun. The headlight covers weren't that good, either, as were some of the panel fits (rear decklid especially). All of that said, the car has a lot of charisma and it was something that really made me smile. I made an offer after the auction (I did bid on it) and was well short of what the seller needed. Fine with me.

 

The former British colony's collector car laws still apply to Hong Kong these days, which means freedom of import and export. The 275 GTB will have no problem to stay in HK as her new home. The Mainland China import and export of collect car is very different.

 

And it was just said that: " little vintage car fervor in China; their nouveau-riche want the latest model".
I guess when you have a lot of **ck-you money, like many of the newly minted Chinese millionaires and billionaires have, your fervor tends to transform and one begins to indulge in the finer things in life that include a Ferrari collection with one from each decade. These emerging markets is the wild card IMO in the equation. It will be interesting to see which one of these markets (China, Brazil or Middle East) will drive the demand in the next 20 years...

Geno

 

What is not functional about them? I drive my 365GT back and forth to work in the summer quite regularly, and it does the job as well as any of my other cars.

I think the "worth too much" argument is interesting-- assuming you have insurance, it's really a matter of psychology. After all, if it's worth $1 million, you (or your insurance company) will probably have no issue with spending $250k or so to fix it if you wreck it. Of course, your premiums will probably go up...

My 365, on the other hand, would most likely be an immediate total after even a parking lot collision, due to it's relatively low value and the diminished value factor.

That reminds me-- does previous accident history really do anything to the value of any 250? After all, they're all so old that they've all been shunted at some point... as long as properly fixed. I'm curious what the wisdom is on this?

 

Hong Kong is not China for purposes of these discussions. The former's collecting fervor and tendencies in most (if not all) of the "Western" collector markets is well-known and not new. According to most market experts in the collectible car, art or related markets, the participation by Hong Kong buyers has tended not to influence or encourage any similar interest from mainland buyers, to any significant extent. Whether this interest may ever spread to mainland China in the future is still open to debate, but for now, that market has no significant impact on our discussion.

Michael

 

I agree with the above.

Forget emerging markets as a possible soft landing for classics.

China has no history of car ownership. If you ever go there, you know that classics have no purpose there on the road. There is no nostalgia or previous culture for them.

What they want are new cars. A Classic means nothing but "old". And, with no resale market, they mean nothing as investments.

Just like China's wealth has meant nothing to the collector art market, it will mean nothing to the collector car market.

 

I never seem to hear of many classic Ferraris going to or coming from Arab countries where they have been available as new cars for many years.

 

So nobody remembers how much this car was worth ten years ago? If you really want to see if there is a bubble shouldn't you run the inflation-adjusted numbers to see how big the bubble is in the first place?

Dale

 

Seems like the lack of appreciation for Ferrari's heritage in China is true given the apparent equal sales that Ferrari and Lamborghini post in that market.


Meet The Guys Who Paid $4 Million For The Lamborghini Veneno Before Seeing It

from the article on the Veneno

 

Having been categorized when buying at auction alternatively and indifferently as Chinese, Polish, French, English, Hungarian and Swiss collector - a consequence of being truly international and people mixing citizenship, country of residence and genome- I would not take this information as a sign of a new trend. Furthermore some of the biggest Ferrari collectors are HK based and some of them are Chinese, indeed. I can remember at least 3 GTO being owned at some point by HK residents.

 

I think the utility issue depends on where you live or store the car. If you live or store the car in a city or a densely populated suburban area, agreed it isn't much fun to drive in traffic. However, if you live or store the car in a suburban or rural area, there are many opportunities to drive a vintage car. I live in Greenwich, CT (45 minutes from NYC) and regularly during the spring, summer, fall and on nice sunny days during the winter, I see vintage sports cars being used - Daytonas, 275 GTBs, Boxers, Lamborghinis, Lotuses - along with lots of more modern exotica. Last weekend, I saw a very nice Maserati Ghibli parked on the street in Soho and watched the owner come out of a store with some bags and drive away.

 

The Chinese want to be known for when they crash the most expensive Lambo and are financially well of enough to walk away from it and brag about how they aren't monetarily affected by the loss.
The ulitimate consumer

 

A Fiat Jolly went for $110,000.00 at Amelia.

 

About the same price as a decent Boxer.

Do I sense something a little out of whack here?

I think it's time to buy every remaining decent non-rusted through Fiat X 1/9 that is still running and corner the market. Buying them all up can't cost more than 10 or 20 grand.

 

You might be on to something. Better yet Lancia Montecarlos. (Nee Fiat X1/20)

When serious money goes after "cute" something's wrong.

 

I've been thinking that about Isettas for years now, which is almost totally unusable in modern traffic. But they keep selling them for $35k a pop, so what do I know.

 

Going back to the age argument, I'm in my mid 30's and see a lot of people in my generation who can also afford top shelf classic cars going after great cars of the 60's, 70's, and 80's. I have to say that I think that pop culture plays a strong role too. Classic films and TV shows like 007 movies and TV shows like Miami Vice, Magnum, and The Persuaders do a lot to make these cars cool years later to a new generation of kids.

Personally, I'm doing my part to keep the next generation into the classic cars. My 6 year old loves this as its the same as Sonny Crockett's. I have a feeling that these guys will appreciate cars like this long after I'm gone.
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