The two emotions dominating the market today are exuberance-especially from new collectors-and wariness, from those who have seen this all before.
I've just finished participating in the three-day, Miles Collier-hosted symposium, Connoisseurship 2006. This was my third time attending, and the second time I have been privileged to be a member of the faculty.
In addition to Collier, who offered thoughtful presentations on the current state of collecting and restoring, other instructors included auctioneer and now collector-car financier Simon Kidston, historian Doug Nye, journalist and hot-rod specialist Ken Gross, custom coachbuilder Steve Moal, and collectors Fred Simeone and Eric Zausner. David Kelley, founder of design firm IDEO, and Stewart Reed, Chair of Transportation at the Art Center College of Design, offered perspectives on design and styling.
The fifty participants were all serious collectors with a wide range of interests. While the formal seminars dealt with issues of provenance and restoration, discussions among the participants between sessions focused on the market.
Here are my conclusions from the event, based partly on evidence, partly on my personal biases, and partly on what I have learned listening to others.
SEGMENT BY SEGMENT
Last issue, I predicted at least four more years of a climbing market. Today, I think it may last longer. This is barring any major upheaval in the world, from a civil war in Saudi Arabia that would deny the western world the oil it needs, to catastrophic natural events over which we have no control.
The Baby Boomer generation has already become the AARP generation. This group, my generation, was the first in U.S. history to live in unparalleled wealth from birth. We have endured no depression, no pestilence, and no starvation, and we have consistently pushed back the aging process, both emotionally and physically.
As our mortality becomes more apparent, we're aggressively seeking new experiences. We pursue "soft-adventure" tours, where gray-hairs get to rappel down mountainsides (likely with a helicopter hovering nearby just in case) or wrestle with alligators (after they have been properly sedated and de-fanged).
This thrill-seeking translates directly to the car market. There are tens of thousands of Baby Boomers who haven't owned the Camaro they so desperately wanted in 1967. And each time they hear of a friend who has passed away, or who has had a stroke and requires a walker, it causes them to think that if they want that Chevy, now's the time to buy it.
Which is why the muscle car market is so frothy. The purchases we are seeing have nothing to do with collecting, but everything to do with immediate fantasy fulfillment. And with such unparalleled wealth at its disposal, snapping up muscle cars has become one more soft adventure.
My prediction now is that we'll see another decade of high demand for muscle cars. High-end, no-stories cars will continue to bring seven figures from serious collectors. At the same time, clones will continue to surprise with strong prices as fantasy-seekers pay for gloss over substance.
I have long wanted to own a 1967-68 Camaro with a 327 or 350 and a 4-speed. It doesn't have to be an RS or an SS, just in decent shape, with some eyeball. That used to be a $15,000 car, and now it's a $30,000 one. I'm wondering if I should jump in now, before it's a $50,000 car.
It wouldn't be a long-term keeper like our 1963 Split-Window, but it's a driving experience I'd like to have, for a year or so. This same urge that is causing me to consider writing a check is driving others to feel the same way.
SUPER CAR DU JOUR
But not all cars will appreciate. At the Collier Seminar, Kidston led a class on the future of today's supercars. We had, on-site, a McLaren F1, a Ferrari Enzo and F40, a Porsche 959 and Carrera GT, a Jag XJ220, and a Bugatti EB110 and Veyron. It made for a handsome garage. In my opinion, these flavor-of-the-month cars have-with a couple of exceptions-nowhere to go but down in value.
The McLaren is a surefire blue-chip collectible, with technological excellence backed up by true competition heritage. Winning at Le Mans is a nice "occupational experience" to have in your marque resume.
And though the 959 looks like a 911 with a rather tail-heavy body kit grafted on, it will stay strong. This is partly because it was such a successful rally car, partly because it marked a highpoint in automotive technology, and because a large number of Porsche fanatics will always look to it as an icon.
The F40 stands the same way. LM versions had some successes, and visually, with its outrageous Plymouth Superbird wing, the car was the first bad-boy Ferrari to come along since the Daytona.
But here the water gets murkier. The Carrera GT looks like a Boxster from the front, has no competition history, and is being built in huge numbers (over 1,200 at last count). These factors alone guarantee no one will care in the long run.
The Enzo will become as unloved as the F50 is, once the model supplanting it, the "Enzo X-treme," hits the road. The EB110 is just a goofy afterthought, a made-up car with a made-up brand whose only redeeming value is its rarity.
The XJ220, arguably launched with the worst PR campaign in history, as well as a raft of Jaguar lawsuits against disgruntled customers, continues to be curvaceous, huge, and irrelevant. Finally, rather than concentrating on the Passats that paid the bills, VW's ex-chairman, Ferdinand Piech, managed to squander enormous resources on the new Veyron, a car that will never be more than a collecting afterthought, no matter how prodigious its performance.
AT THE END OF THE DAY
So how does all this relate to Hemi clones and SS 396s? Specialty car buyers today are after an emotional experience. As every supercar can go zero to 100 mph and back in the blink of an eye, with performance unusable except in a few deserted stretches of Montana or Nevada, they are bought as costume jewelry, expensive ways to show your buddies you've got more money than you know what to do with. On the other hand, cars from the '60s offer an emotional experience, and camaraderie with like souls. They speak directly to the heart.
So while nearly all of the supercars above are going to slide down the value curve, the muscle cars will continue to climb. After all, when it comes to car collecting, the heart always wins. And the Baby Boomer generation that came of age in the '60s is getting in touch with its
emotional roots for one last big, tire-burning, V8-powered, dual-quad fling.