Classic Car Report Classic Cars: New insights on a unique market

Transcription

1 Classic Car Report 217 Classic Cars: New insights on a unique market

2 Nothing is too beautiful, nothing is too expensive. Ettore Bugatti Photo: ADEMY Classic car insurance with AXA ART The world s number one art insurance specialist, AXA ART operates in 26 countries and brings over 5 years experience to the responsibility of insuring works of art and collectibles. Being art lovers and experts first and foremost, we know in the fullest sense how precious possessions can be. We understand that complete financial peace of mind doesn t begin to cover emotional attachment. We approach classic car insurance exactly how we would the most valuable works of art. We take time to understand your individual circumstances and create personalized coverage that exactly matches your needs, and we dedicate ourselves to protecting your collection in every way we can. AXA ART s Classic Car insurance provides first class cover against physical loss and damage to your classic and vintage vehicle collection. Cover is provided on an agreed value basis and extends to temporary locations and transits worldwide. Defective title cover is also included as standard. We do not offer third party liability coverage. We recognize that your investment is far more than just another asset; so much of our guidance is preventative. But should you need to make a claim, our expert staff will personally help you every step of the way, through a claims process that is as simplified and sympathetic as it can be. 2 3

3 Classic cars: a truly high-performance investment? Like all true collectors, classic car enthusiasts are not purely driven by financial considerations. In the main, they are passionate devotees, with an aesthetic appreciation of their objects of desire that rivals that of any fine art connoisseur. Yet however romantic the allure, the market can be subject to fluctuations like any other. It s good to have an accurate picture of what your investment might be worth. At AXA ART, we have in recent years come to realize that analysis of the collector car market is comparatively scarce. Of the many thousands of sales worldwide, only few researchs existed of the best-performing models, the direction of any underlying trends, or even how the market compared against other forms of investment. Last year s inaugural collaboration with ADEMY (Automotive Data Evaluation Market Yield) did much to redress that omission. In this, our second annual report, we are expanding on the scope of the original to provide a more detailed, up-to-the-minute analysis of how classic car segments are performing under changing market conditions, with particular reference to examining sales and trends at-auction for the first eight months of this year. Ademy Classic Car Index ACCI Volume & Quantity Working again with ADEMY, we ve produced a data breakdown of monthly classic car transactions at auction totaling over 11, sales records, of which 65, document sales. The Volume Index is based on auction turnover, and anticipates a 217 year-end figure of 335 points a downward trend after record levels in 215. The Quantity Index, reflecting the number of cars sold, reveals a slight annual growth to 365 points E ACCQI Numbers of cars ACCVI Turnover The overall picture is healthy specifically on the very strong supply side. Demand however has gone through a weaker phase, reflected in a reduction in turnover and a squeeze on process. The market breakdown Market Summary cars sold at a price of > 1 Million cars sold at a price of > 1. cars sold at a price of < 1. Classic Car Index ATLI Classic Car Index AMCI Classic Car Index ASCI The market over the past twelve months has rather suffered from a surplus of supply. With more classic cars being available, tender prices have dropped sharply, which has in turn led to fewer sales. For the first 8 months of 217, 7,443 cars were sold at auction, an annual increase of 4%. However, while more cars were sold, revenues declined, with auction turnover falling by 7% year-on-year to 89 million. Final results from the 217 auctions at Pebble Beach, California record a total turnover of $274.1 million a marginal 3% contraction from $281.8 million the previous year. At 8.35% (down from 81%), the selling rate remains broadly constant. Taking the longer view, we can see a downward trend on auctions turnover, with an index of 335 points showing a sharp drop from the 453-point spike of 215. The number of cars available continues to grow yearly, with last year s index figure of 364 points being the highest ever. An examination of the different segments reveals that the Index (cars selling for less than 1,) is the best performer in terms of quantity sold. The Segment (selling for over 1 million) performed best in terms of actual turnover, and the Index (more than 1, but less than 1 million) grew proportionally in both number sold and revenue volumes. However, all segments experienced a slowdown in sales, coupled with an increase in models available. How does the market compare? Over the first 8 months of 217, the classic car market returned 3% overall growth, which compares well with other alternative investment options. That said, jewels proved to be the clear asset-class leader (18%), with fine art also performing well (5%), thanks to a modern and contemporary art segment rebound at auction. 4 5

4 Historical series trends (September 6 September 217) Numbers versus turnover A glance at the graph shows that over the past twelve years, classic cars have performed consistently strongly against other alternative investment asset classes, peaking in 215 but still representing substantial value as a long-term investment. The 217 market has largely stabilized after the 216 slowdown, demonstrating a 3% growth-rate comparable with most other investment options. Jewels were the outstanding performers, partly due to their enduring intrinsic value and also to the strong growth of personal luxury goods. Their performance was also perhaps distorted by the sale of the Pink Star at 59.6 carat, the largest pink diamond ever certified by the American Institute of Gemology which commanded $71.2 million. Fine art especially modern and contemporary art is also rebounding at auction. In May, Constantin Brancusi's muse endormie sold for over $57 million and Jean-Michel Basquiat's Untitled (1982) sold for $11.5 million from Sotheby's New York. Small CAP index numbers vs turnover (6 = 1) ASCI E Mid CAP index numbers vs turnover (6 = 1) AMCI Numbers Small Turnover Small Historical series trends (September 6 September 217) 5 Ademy Car Index Art Watches Wine Jewels S&P Global Luxury S&P 5 As against the highpoint of 215, all sectors show a slowdown in turnover, combined with an increase of the cars sold. If it continues, this trend may signal an oversupply, buffered to a degree by high demand but also vulnerable to pressure on prices. The Index shows above-average growth in numbers sold (385 points) compared to turnover (131 points). Conversely, the Index displays impressive turnover growth (625 points), against the number of cars sold (512). Eu Gov bond S&P 1 Aug - 6 May - 7 Feb - 8 Nov - 8 Aug - 9 May - 21 Feb Nov Aug May Feb Nov Aug May Feb E 252 Numbers Mid Turnover Mid Top lot index numbers vs turnover (6 = 1) ATLI E Numbers Top Turnover Top 6 7

5 Cars sold per price segment January-August 217 Viewed by segment, we can see that cars worth over one million represent just 2% of the total, but in terms of turnover exceed 4%. Averaged over last the last 5 years, the classic car auction market is emerging in the and segments. However, the segment still represents the core, accounting for 77% of all cars sold. Price segment classification > 1 Milion 1 K < < 1 M < 1 K Photo: ADEMY Split by number: cars sold per price segment 8M 217 Split by turnover: cars sold per price segment 8M 217 Estimate of turnover mln Estimates on turnover and number of cars sold in the first 8 Months of 217 2,% 16,8% 77,3% 2,7% 42,3% Estimate of turnover mln : % Turnover is estimated to be down by approximately 14% for the year should show a recovery of around 7%. 7% ,8% 8 M ,3% 2,7% 2,% Average ,% 17,5% 1,5% 8 M ,8% 42,3% 4,8% Average ,2% 42,5% 36,2% 89 Realized Estimates for the numbers sold show an equivalent trend for 217 as 216, while 218 is set for a reduction of around 2%. 217E 218E Estimate 9

6 Focus on: MG A, Chevrolet Corvette Stingray C2, Lancia Aurelia B24 The contrasting records of these three classic models provide a revealing insight into the respective performance of the, and market segments over the past ten years. An entry-level classic, the MG A has returned a modest increase over the past ten years, from 17, to 25, in 217 (47% growth). A ready supply of new collectors maintains a sold rate of 8%. However, in 216/17, both the number of cars and also the prices decreased. Both convertible and coupè versions of the classic Stingray V8 have displayed continuous growth over the past 1 years, from 14, to an average of over 19, in 217 (over 83%). Sold rate is 1% and prices have recently spiked, with one auction sale fetching over 5, in May 217. Only 761 models of the Lancia Aurelia B24 Spider were ever produced. Its ten-year growth rate is a phenomenal 45% from about, in 8 to over 1.1M in 217. Spiders are rarely available five were presented at auction in 217 and always sell. Figures in the following table refer to the maximum price per model reached at auction and indicate the huge flexibility of the price versus the quality of the car on sale. ADEMY Automotive Data Evaluation Market Yield edited by Gianluigi Vignola and Cliff Goodall Focus on: MG A, Chevrolet Corvette Stingray C2, Lancia Aurelia B24 About ADEMY 1 Marque Model Year price 215 price 216 price 217 MG A Twin Cam Roadster 1958/9 78,24 92,687* 7,258 Corvette 427/435 Coupé ,89 183,831** 548,321 Lancia Aurelia B24 Spider America ,747,488 1,773,486 1,428,715 *1959 ex-works model **closest available figure, as at 14/1/17 For over ten years the database ADEMY has recorded the transactions of all auctions in Europe and the USA (except US production cars auctioned under 1K). To date, ADEMY has recorded more than 12, transactions with unique identification by chassis number. Registration covers the following data: Marque: car brand Model: car model Description: significant details: e.g. history, number of owners, sporting heritage etc. Year: the year of construction Chassis: the full chassis number of the car auctioned Type: the car body type: e.g. Berlina, Coupé, Cabriolet, Roadster etc. Date: the date of auction Auction number: the number that allows identification: e.g. auction house, place etc. Lot: the lot number matched to the car at auction Min Estimate: the minimum estimated value Max Estimate: the maximum estimated value Price in LC: the selling price in the auction s local currency Currency: e.g.,, $ etc. Price in : the selling price converted into, excluding buyer s fees CUR/ : the /local currency exchange rate on the day of auction Change: the percentage difference between the selling price and the minimum estimated value Res: the reserve price details (if any) 11

7 Classic Car Report 217 Cover: ADEMY To enquire further about classic car insurance with AXA ART, please contact: AXA ART Insurance UK SE Marlow House 1A Lloyd s Avenue London EC3N 3AA United Kingdom Tel: info@axa-art.co.uk