Generational shift shaking up vintage car market

I call BS on the "stuck on the phones bull"..

1. The number of people under 30.. yes young women too.. that check out the car when I have her out is impressive. Not necessarily a drool.. but a good hard glance tells me the doom and gloom for special cars like Ferrari's is overrated.
2. Notice that celebs like Kim Kardashian and Paris Hilton are glued to their phone.. Note how she tweets and doesn't know a injection coil from a gas tank. (does she even pump gas?)
What car do they get the first month they make it? Ferrari.
Yeah for a cohort that ain't driving.. it seems they know what car they want when they have the cash. And that is the rub with millennials. No cash. Wait till they get older and start having their fertility doc on speed dial. That's when they'll want the house in the burbs, the family, and the car.

 

Have you been to China? I don't see it being a car culture but it's just me (maybe?). Think of the North American passion for the original US built cars, the automotive revolution having taken place in the USA over the last century, etc., etc.

Then of course there's the felt connection to the Italian artistry and the German engineering, and so on. Do Chinese people (en masse) have the same affinity to the values that European history and tradition espouse?

 

There's a difference between admiring something unique and beautiful and wanting to spend money on it (it costs how much for an engine out? .

 

I don't know... I still haven't figured out why, as an American, I've always felt more of a connection with Italian and German cars.

(And no, haven't been to mainland China - only HK.)

 

China will not be a factor in classic cars until importation of old cars is loosened up.

At this time it is nearly impossible, even with all the connections lined up. All of the grey market imports are brand new cars.

 

I am in the auto parts manufacturing business. One of our divisions specializes in performance parts. Our largest export market for that product line is China. Top selling applications are BMW 3-series, Audi A4 and VW Golf. It is still a small percentage of our overall business (our annual sales are in the mid 9-figures) but the China enthuasiast market is growing. Give it another 10 years to break out.

 

This guy seems to think they will be and probably more in the "know" than you are. http://www.ferrarichat.com/forum/143775324-post1.html

 

My opinion: the higher tier collectible cars (based on beauty, provenance and relative rarity) will have the best chances of crossing generations, especially as long as the brands remain relevant and functionalities are maintained. For lower tier collectibles, generational shifts have a much more significant effect on the values.

Regarding China: the nouveau rich is still into the newer cars from top brands. Judging from their developing tastes for vintage wines and traditional art, I think there will be a time during the next decade in which more will jump into the vintage car market especially Ferraris.

 

The Chinese have no use for "old" cars. They have no classic car culture and taxes to import them are 110%, not to mention government regulations. Buy a 2 Million dollar car and it will cost them 4.4.

I don't see Chinese money doing anything. It hasn't to this point.

What the Chinese like are new cars as status symbols.

I have absolute proof. Chinese stand outside in long cues in Hong Kong to buy new watches and purses. They never touch the vintage market.

Magnum never ran on Chinese TV. A 308 is just another old car.

 

A few people on this board say generational shifts have nothing to do with the classic car market.

 

Yes but the $ age range to go buy your childhood dream car is usually 40-65 so we have 25 more years till those kids get there

 

Me too, got my 60 Caddy. I'd love a 76 roadster & Cadzilla

Duesy would b welcome too

 

I agree. People who say cars (in general) are going to continue to appreciate are not taking an honest long term view of the situation. I wonder if horse carriage enthusiasts were having the same conversation back in 1890.

 

Equestrian is still big business with a wide following. I'm guessing basic Camry-type cars will go away, but hobby/recreational... different story.

 

Yes I have been to China....a couple of times. There are a couple of things at play in the Chinese market. Firstly, wealthy Chinese send their kids to the US for school. There is a huge underground exotic scene of Chinese students here in California. They show up to 'Coffee and Cars' in their Aventadors, F458's etc. But drive a modest car to school to keep a low profile. The Chinese also do not look at 'classic' cars the same way we do. Classic means old and undesirable. But I would gamble that view is changing as classic is becoming more viewed as 'valuable asset'.

Lastly, Importing anything into China is a lesson in Economics. They hit imports with huge import duties. Its far cheaper to buy a home in another country and keep the vintage Ferrari there. If the Chinese government ever eases import duties on vintage or classic cars.......values will jump overnight. There are plenty of wealthy Chinese nationals who desire older exotics.

Getting back to the topic on hand....I see the earlier Japanese sports cars as the latest untapped market.

 

I was going to say exactly what you said. I live in Vancouver which is dominated by Chinese money. My son is Chinese obsessed and only dates Chinese girls. They don't like to keep a car past two years old. They have created a great used car market.

 

No offense, but there is no basis for assuming the guy is really "in the know" at all with respect to future buying trends.

His personal bias is towards assuming or stoking the market to take off (since he owns all those cars) but he is just someone who effectively inherited a position of wealth. He is likely a (very small part) of the reason for the current bubble in exotics and classics, but he won't have any particular insights regardless of his business as a lux import/exporter.

When the asset bubbles start to pop again, there will be a withdrawal from the market by speculators, Chinese or otherwise. I agree that the Chinese enthusiast market is not as well-developed -- it is even more status-oriented than the US market (which is itself becoming more status oriented for high end performance cars).

That said, you need only a very small subset, of a subset, to make the Chinese market relevant.

 

Buyers like the Japanese became big collectors and their economy transitioned much like China is doing now. Plus they have had similar car buying habits. I don't think this David Lee guy cares too much one way or another who buys his cars down the road, but he knows these people and my money would be on this being a significant market at some point.

 

I don't know enough about the classic Ferrari market but I do know about coins and currency. It's been a hobby of mine for 42 years. I can tell you there is more demand for confederate currency since any time after the civil war. There are a lot of collectors that want it. I can't tell you why but people want it young and old.

 

Historical artifacts are usually collectable. However, The Civil War has such a hold - and rightfully so - on many people in the US, especially in the southern states where the war was fought. I saw it first hand when attending college in NC (1976) and learned alot about the history of the war from some avid civil war historians, collectors and battlefield metal-detecting-enthusiasts.

 

I agree wholeheartedly so am hedged both ways.
A 512BB for me and my generation and an NSX and 450 mile RX7 twin turbo for the next.
But a timeless design like a 250GTO will always be collectable.

 

The rare and beautiful cars will always be worth big money, see: Duesenberg and Bugatti. Most of the people that lusted over them when they were new are dead but it hasn't hurt value at all.

The higher production and not in some way very special cars will be a crap shoot. A nicely restored VW van, for example, is worth some coin and going up and will probably not go down in the future as those who never saw them when they were new love them. A run of the mill Vega or Pinto, never. A comparably limited production and good looking Ferrari, even a 'mass produced' 308 will probably maintain it's value pretty well. The not so good looking ones or not in some way special ones, crap shoot (308 GT4, 365GT4/400/412).

The good looking and rare muscle cars will maintain value decently, but the run of the mill cars that saw or are seeing a run up won't. I don't think you'll ever see a cheap 327 FI or tripower 427 vette. They're beautiful, rare, and for the time, very high performance cars.

You have to put it into perspective. Ferrari made what, 12k 308's for all years for the whole world? Most muscle cars saw that kind of production (or much more) in a single year just in the US, it's only the limited production special versions that were made in lower numbers, and those limited numbers are comparable to a 308, not a lower production Daytona or BB.

 

Agree.

To "rare and beautiful", I'd add "iconic". To take an obvious example, the '68 Mustang GT 390 fastback as used in 'Bullitt', is probably famous enough to transcend the circle of Mustang enthusiasts or guys who were teens in the late '60s. The Gullwing and Speedster are probably in the same category -- you don't have to be a Mercedes or Porsche fanatic to want one.

 

The other thing that might interesting to note as well is the younger generations like "vintage"

There has been a bit of a push for Vintage clothes and vintage watches etc...

Vintage hairstyles etc... maybe they will get the vintage car thing too.

There was so much of a vintage push that almost every drinks company did a throw back label. They did it for a reason I would imagine.

 

I'm 38, and grew up like a lot of kids - buy a $500 project car and fix it up. You had to learn a lot of skills to do that, but it was common to do.

As far as I can tell, that has dried up. Younger kids like vintage but don't have the tools, space, knowledge or attention span for large projects. They're likely to buy a $5000 car that runs and drives, then add or modify stuff here and there with aftermarket parts. Jeeps, fox body mustangs, hondas/toyota/3 series bmw, etc. I have a few restoration projects down in the barn, and if its not a 60s musclecar, they're harder than ever to sell.

Younger kids also seem to be able to afford brand new enthusiast cars at a rate I can't fathom. Maybe parents are co-signing loans because the media keeps telling them how unsafe old cars are?