Clas­sic cars: Mark Hay­bit­tle Driv­ing amaz­ing re­turns

Val­ues can dou­ble in as lit­tle as 12 months if you choose the right ve­hi­cle

Money Magazine Australia - - CONTENTS - MARK HAY­BIT­TLE

An in­creas­ing num­ber of in­vestors are join­ing the clas­sic car in­dus­try in Aus­tralia. And it’s not sur­pris­ing given clas­sic cars have seen a jump in value of 467% over the past 10 years. This per­for­mance is high­lighted by re­cent record sales of cars in the Aus­tralian clas­sic car mar­ket, as well as ma­jor ac­qui­si­tions of im­por­tant clas­sic car deal­er­ships.

It is a sig­nif­i­cant marker of this new trend that Champ Pri­vate Eq­uity se­cured the pur­chase of one of the two main clas­sic car re­tail­ers last year, when it ac­quired Dut­ton Garage in Mel­bourne. Champ is now about to pur­chase the other op­er­a­tion, the well-known Clas­sic Throt­tle Shop in North Syd­ney.

Now that there is real mo­men­tum in the mar­ket, more than $1 mil­lion was re­cently achieved for a 1967 Ford Fal­con (GT-HO Phase III), which would not have been worth more than $300,000 two years ago. This is a record for Aus­tralia. Sev­eral Holden To­rana A9Xs have also been sold for well in ex­cess of $300,000 re­cently, as well as many other mus­cle cars.

While all of this ac­tiv­ity is great for our mar­ket, cau­tion is re­quired as Aus­tralian mus­cle cars ap­peal to only a small per­cent­age of 25 mil­lion peo­ple, whereas Euro­pean clas­sics ap­peal to a per­cent­age of the en­tire world and so val­ues rise ev­ery year.

On the lo­cal scene, the Ford Fal­con GT-HO Phase III was built in lim­ited num­bers and had great per­for­mance and rea­son­able han­dling, giv­ing it a few of the hall­marks of a true clas­sic, although few peo­ple out­side Aus­tralia even know it ex­ists. By way of con­trast, ev­ery­one in the in­dus­try in Eu­rope and the US knows that a Fer­rari 250 GTO changed hands for $70 mil­lion ear­lier this year and that an As­ton Martin DB4 GT Za­gato (2 VEV) was auc­tioned in July, 2018 for £10.1 mil­lion ($18.8 mil­lion).

While we al­ways know which cars are about to ex­plode in value six to 12 months be­fore they ac­tu­ally do, it is al­ways good to re­flect on our pre­dic­tions from 12 months ago, and what ac­tu­ally hap­pened.

The real ris­ers over the past 12 months have been the Ja­panese clas­sic and modern clas­sic cars, and this will con­tinue for the next 12 months un­abated – for the right cars. We dis­cussed the Nis­san Sky­line GT-R R34 V-Spec II last year, when the av­er­age sale price was $200,000. These cars have con­tin­ued their rise into 2018, with sev­eral ex­am­ples cur­rently for sale at be­tween $230,000 and $250,000, show­ing a gain of up to $50,000 in 12 months.

We also men­tioned Toy­ota Supra twin tur­bos (JZA80), which have con­tin­ued to do amaz­ingly well, with two hav­ing just sold for $150,000, al­beit with very low kilo­me­tres. These cars were plen­ti­ful in 2016 and 2017 for just $28,000–$34,000.

Porsche 930 Tur­bos have con­tin­ued to rise, as we pre­dicted, with a red Cabri­o­let RUF-bod­ied ex­am­ple on the mar­ket to­day for a stag­ger­ing $695,000. The av­er­age price for one in our last re­port in Money was $340,700. Porsche 911 SCs have now fi­nally lev­elled out, and did not ex­pe­ri­ence any growth in 2017-18, which is com­pletely in align­ment with our 2017 pre­dic­tion.

Fer­rari 308 GTBs have also plateaued, fol­low­ing a tripling in value over the ear­lier pe­riod. This is pri­mar­ily due to the very poor drive ex­pe­ri­ence that this car of­fers com­pared with many of its coun­ter­parts.

For ex­am­ple, a Lo­tus Esprit from the same era is far ahead in so many ways, such as with steer­ing re­sponse, brake feel, power de­liv­ery and over­all han­dling. It is sim­ply a case of no­body

else want­ing to pur­chase 308 GTBs, partly due to the age of the in­ter­ested par­ties.

The clas­sic car mar­ket is be­gin­ning to ma­ture in Aus­tralia, and so is start­ing to repli­cate more of what oc­curs in Eu­rope, save for the Ja­panese modern clas­sics, which were never hugely pop­u­lar in the north­ern hemi­sphere. That said, Dat­sun 240Zs and Toy­ota 2000GTs are now gain­ing ma­jor trac­tion in Eu­rope, as are Nis­san GT-Rs and Honda NSXs.

Clearly, spe­cial­ist knowl­edge is re­quired, which is fine for us: we have built them, bought them, sold them and raced them. As these cars rise in value as­tro­nom­i­cally, at­ten­tion to specifics is ab­so­lutely crit­i­cal. We deal di­rectly with ex­pert col­lec­tors in the US and the UK as well as Aus­tralia, and so have ex­ten­sive ex­pe­ri­ence in the clas­sic car world’s key mar­kets. When a car rises more sharply in one mar­ket than an­other, we sim­ply move the car there, which can­not be done with prop­erty.

There are now eight ma­jor weekly news­pa­pers of over 85 pages on the in­dus­try in the UK, as well as 13 monthly full-colour mag­a­zines. Each year there are 47 ma­jor clas­sic car shows in the UK, each with over 1600 cars for sale. There are now 12 tele­vi­sion shows there on the sub­ject. The web­site carand­clas­sic.co.uk fea­tures a feast of clas­sic and col­lectable cars.

All of these things will hap­pen in Aus­tralia shortly, with new auc­tion houses such as Lloyds on­line lead­ing the way.

THE NEXT BOOMERS

There are now an­other 52 makes and mod­els that are just be­gin­ning their growth path (up from 16 in 2016), one of which is the Mit­subishi 3000GT. In the sec­ond week of Fe­bru­ary 2017, there were 17 Mit­subishi 3000GTs and GTOs on carsales.com.au for an av­er­age of $8298. To­day the av­er­age price is $17,382, and these cars have only just started their ap­pre­ci­a­tion, which is why we pur­chased nine ex­am­ples from Jan­uary 2017 on­wards. These cars will rapidly rise to $40,000, and then con­tinue well be­yond, sim­ply due to rar­ity and their high specs as the first Ja­panese su­per­car.

An­other ex­am­ple is the amaz­ing 1970-75 Range Rover Clas­sic twodoor, of which we now have a large num­ber. The growth in these ve­hi­cles (which were the first SUV) is sim­ply stag­ger­ing: very few good ones are avail­able and even fewer are for sale. There were just nine Range Rover Clas­sic two-doors for sale in the same week in Fe­bru­ary 2017, and that num­ber is down to just four to­day. While one could be bought for un­der $5000 in 2016 and into last year, they are now for sale at up to $100,000 in Aus­tralia, and over $300,000 in Eu­rope for a Jaguar Land Rover (JLR) fully re­stored Suf­fix A (1970-71) 355 chas­sis num­ber ve­hi­cle, which is why we are restor­ing 23 of them for our in­vestors.

There are plenty more cars to cash in on, although of course ev­ery one has to tick all the boxes with re­gard to her­itage, con­di­tion, chas­sis and en­gine num­bers, trim, colour, en­gine, trans­mis­sion and fi­nal drive ra­tio op­tions, build num­bers, year of assem­bly, coun­try of assem­bly and so on through an­other 20 or so items.

For ex­am­ple, an Aus­tralian-de­liv­ered 356 chas­sis num­ber Range Rover Clas­sic two-door is worth about 40% less than a UK-de­liv­ered 355 chas­sis num­ber ve­hi­cle with a UK V5 (sim­i­lar to our reg­is­tra­tion pa­pers) when sold into the UK.

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