Changing of the Guard
Unlike some stakeholders in the industry, we have no vested interest in commenting on the market – we don’t have any stock to talk up or promote. Whilst we are actively involved in the specialist car sector and supported by an expansive dealer network, we have never subscribed to the hype in some corners of the market – after all, we’re not financial advisers.
As we are ambivalent as to whether a certain model goes up or down in price, we feel uniquely positioned to comment on the market from the side lines. In 2017 we worked on an industry-leading thought piece which exhaustively examined the next steps that we believed the sector would take as older owners began to exit the market.
One of the conclusions from the body of work was that the next generation of owners aren’t necessarily going to want to buy the same cars that those who have come before them have coveted. It’s the elephant in the room that some in the industry would rather ignore, whilst other hope that it won’t affect them – “I’ll be retired by then” was one of the comments that we heard upon beginning the conversation.
The attraction that some cars have for many of us now, simply won’t be shared by younger generations who will instead define their own iconic cars. Whilst we don’t think the full force of change will be visible on the market for another 10 years, there are early signs to suggest that the change we first spoke about four years ago is underway as a result of some key auction results over the past few weeks.
The thinking underpinning of theory is straightforward; speculators aside, we believe that people who are passionate about cars tend to buy vehicles that influenced them in their formative years. On average, a buyer who is thinking about making a special purchase to adorn their garage enters the specialist market in their early-50s and exits by their mid -70s, so on average, we would expect people born in the late 1960s to be some of the most active in the market.
To try and imagine the impact that a shifting age band has on the sector let’s wind back five years and at the same time assume that cars leave their imprint on people from the ages of 11 years old to 21 years old. That would mean that in 2016 someone he was born in 1964 would be entering the second / weekend / classic car buying phase of their life.
Based on this we’d therefore assume that those cars manufactured between 1975 and 1985 would be the ones that would set the heart racing as they flicked through the classifieds. That would provide options in the shape of a Porsche 911 Turbo, Lamborghini Countach, Ferrari 308, Ford Escort XR3i, VW Golf GTi, Ferrari Testarossa, Audi Quattro, Ford Sierra RS Cosworth, Peugeot 205 GTi and the Renault 5 Turbo. Not all of those cars have seen their values significantly increase in the past five years, but all have had their share of the limelight both in auction rooms and across the pages of the sector magazines and we believe that this underpins the theory.
We don’t think that this is a case of modern classics gaining a more than usual amount of attention, but instead reflects a generational shift in the demands of buyers and we’re watching it play out in real time. It’s already happening in America where the prices of 1940s and 1950s cars have begun to soften and we will see it here too.
The classic car market in its current form has essentially been around only since the 1980s, before this they were just old cars. Over the intervening period, classic cars have typically come from British, Italian and German manufacturers and there have been a handful of favourites in vogue for that entire period – think MGB, Stag, Spitfire, E-Type and DB5.
As a new generation of buyers emerges, so will their differing tastes. They haven’t been brought up looking at Sean Connery on the big screen, they’ve been watching Fast & Furious and playing Gran Turismo. The stark difference in opinion is present within our office, whilst some regard a blue-chip car from the 1950s or 1960s as the pinnacle, others would rather buy something a bit more left field.
The manufacturer Nissan isn’t one that gets mentioned much in our office as we typically handle brands that are considered to be slightly more exotic. However, in July at an auction in Japan a 2002 Nissan Skyline GTR V-Spec II sold for ¥60,500,001 (£400,000) inclusive of taxes, and this wasn’t a one off.
A dealer in Japan currently has a similar car up for sale at $485,000 and during Monterey car week this August a 1995 Nissan Skyline GTR R33 sold for $235,000 whilst in the UK, Silverstone auctions have just sold a 2002 VW Golf Mk4 GTI for £38,250.
For these sorts of figures the buyers could have bought some of the finest classic cars available in the market, but this new wave of buyers have very different tastes. We often hear that younger generations aren’t interested in classic cars, and whilst we understand the sentiment, we are not convinced this is the full picture. Instead, the definition of a classic car is shifting as the new guard define their own halo cars.
Published for Historic Motor Racing News, October 2021.
Continue the conversation with our article on Millennials and Classic Cars which you can read HERE!