China Rally to Nowhere

The participants arrive at the hotel in Hong Kong and express their
displeasure. The organizer breaks down in tears and runs off. Now what?

If you’ve owned collector cars for long, you’ll agree that one of the biggest challenges is finding opportunities to use them. You can drive your Porsche Speedster to the office once in a while on a nice day, and you can take a Sunday drive when you can talk your wife out of gardening. But full enjoyment requires a substantial drive to an appealing destination. That’s why vintage car rallies have become hugely successful.

So it was no surprise that when this particular one came along, SCM sat up and took notice. It had all the right trappings. A two-week, 2,500-mile adventure along the east coast of China from Hong Kong to Beijing, retracing the route of the legendary Hong Kong-Beijing rallies of prior years. Five star hotels at every stop. Fifty classic cars filled with like-minded enthusiasts. Twenty motorcycles. Sumptuous meals. Interpreters to help as needed. Beautiful scenery. A rally route designed by a crack German rally-design team. Full mechanical support at every step of the route.

And very attractive pricing-$17,560 per two-person team, all-inclusive (with first-class airfare to and from Hong Kong). The only additional cost was the transport of your classic car to Hong Kong and home from Beijing. The rally was organized by Dieter Hornig, a German who operated a collector car dealership in Beijing.

It seemed so cool

This looked like such a worthwhile proposition that Sports Car Market agreed to be a sponsor, providing advertising in exchange for two free entries, a 1972 Jaguar XKE convertible and a Delorean. We were responsible for our own airfares.

The organizers used a variety of ways to get the news out and created quite a buzz. But as it turned out, things weren’t quite what they seemed.

Of course, hindsight readily identifies the early warning signs. SCM consultant Bill Woodard, his son, and an SCM sales rep won the assignment to attend, creating no small amount of “China-Rally-Envy” around SCM world headquarters. Six months before the start, the rally’s German promoter told Woodard that everything is looking great. But just the next day, Hornig tells Woodard the two promised cars aren’t available. Not to worry, he says, he has others. Three months before the start, promised information regarding licensing and visas has not arrived.

Two months before the start, the SCM rep attends the Barrett-Jackson auction and runs into the sales representative for Cosdell International, the rally’s auto transport company, who advises that things are very confused and they had no confirmed transports.

A quick call is placed to Hornig, who says, “Don’t worry about it. We already have ten cars and two motorcycles entered. It will be fine.” He also says the rally start will be delayed by one day, and he’ll make some hotel changes due to congestion and construction problems.

It keeps getting worse. Two weeks before the start, Hornig advises Woodard to get to Hong Kong one day early to get the licensing squared away. They will have to find their own accommodations for that night. Later, Woodard is told that the rally needs to cut some costs, so the German rally organizing team has been cancelled by Hornig, who is now going to take care of it himself.

What are we getting into?

The SCM gang flies to Hong Kong, nervous about what they will find. When they arrive on Thursday, they immediately contact Hornig, who has nothing but bad news. There are no hotel accommodations at all for them, and they are on their own. A Chinese collector had agreed to loan a Mercedes 170 Convertible and an original Chinese Red Flag, but has abruptly pulled the cars from the rally, so Hornig is working on rental cars for them. But he can’t promise anything right away, primarily because he has far bigger problems.

The other participants’ cars are still stuck in Chinese customs, and he’s having trouble getting them out. And the necessary trip permits are caught somewhere between the Chinese travel agents and bureaucrats. But he promises to get all that sorted out in the afternoon, and the Sunday rally start is still on.

Woodard decides to take charge of their destiny and contacts Chip Connor’s office (Connor is an SCM subscriber who lives in Hong Kong) for advice about renting cars. He hears bad news. Under Chinese law, a rental car cannot leave the province in which it is rented unless a Chinese chauffeur is hired to do the driving. No motorcycles either; only Chinese nationals are allowed to drive them.

As the participants begin arriving at the hotel, eloquently expressing their displeasure, the pressure keeps building. Soon, Hornig panics and throws in the towel, breaks down in tears, and runs off. Now what?

The rescue squad

Three Americans, Jim Taylor, Tom Hamilton and Jim Rice, rise to the occasion and take control. First off, they tell Hornig to just get out of the way and let them fix things. Hornig tells the group that he has about 40,000 euros (around $54,400) in cash that has not yet been spent. He stuffs the cash into a paper bag and gives it to them, which makes an impressively large pile when they empty it on the table at the hotel. That leaves about 83,000 euros ($112,880) unaccounted for, which Hornig claims has been spent on promotional activities, hotel deposits, and other costs associated with organizing the rally-but for which he has no documentation and, to the best of our knowledge, no Chinese hotels appeared to have any credits for payments from the rally on their books.

Hornig also claims that Chinese travel agents have been trying to cheat him, by demanding about $40,000 for the various permits needed for the rally. (Later investigation by the group concluded that this amount was reasonable, given that permits had to be obtained from each province and each major city.)

Now armed with 424,320 Hong Kong dollars (the $54,000 referred to above), the group ponders how to make the rally happen anyway. On Sunday morning, a plan is presented to the participants. All are free to take legal action afterward, but the rally is going to try to go on. Several of the teams received air fare from Hornig, but most had not. The ones who had benefited graciously agree to add the cash equivalent of their air fare to the kitty, so that all the teams will be in the same penalty box.

If a team wants to quit, they will be given their pro rata share of the money, but all teams elect to go forward. The cash is used first to pay the $40,000 for the permits and travel agent fees, and then for other costs as they came up. When it runs out, the teams pay their own way from that point on, as agreed.

Woodard and his son have no cars to drive and other teams offer them extra seats. One of the German teams is also without a car. Since they had paid full registration fees, Woodard gives them the seats and decides just to bag the rally and do some sightseeing. The high point of the trip for the Woodards turns out to be a half-hour taxi ride (that took two hours) in the Chinese micro minivan with no shocks; the driver took back roads to avoid the toll booths because Woodard’s son negotiated him down to a 200 yuan ($26) fare.

The rally gets off two days late, and runs most of the intended route. All drivers get home less wealthy but wiser. Since then, some participants and the Hong Kong Automobile Association have filed suit against Hornig for damages of 2,000,000 Hong Kong dollars (about $256,000).

Did this ever have a chance?

Several participants suspect that the rally was a scam from the start, and that Hornig planned to run off with their money. Woodard doubts that, and attributes the outcome to pure incompetence. He surmises that the problems began when there were inadequate registrations to pay all the bills.

The breaking point may have been when the German rally team was jettisoned, and Hornig took it upon himself to organize the rally and the route, something he was unqualified to do. He also grossly underestimated the difficulty of getting the cars into China. Perhaps he thought that getting them into Hong Kong would be enough, but it wasn’t. Although Hong Kong is now officially part of the Chinese Republic, they still function as separate countries in many respects.

Not being able to find cars for participants turns out to be little surprise. The Chinese collector car market is virtually non-existent. Most old cars were melted down under Chairman Mao, and importing them now is very expensive.

The ultimate irony is that despite the exotic appeal of China, its lengthy history, and its wondrous beauty, in the end, according to Woodard, it’s really not a very appealing ride. The rural side roads are not in very good condition, are very crowded, and are loaded with drivers who pay little attention to rules of the road.

The main roads are of very high quality, but they are straight expressways that do not offer interesting driving. To top it all off, the air pollution in China is horrific. Even when the weather is sunny and clear, air pollution limits visibility to less than half a mile.

Don’t let this happen to you

This is certainly the worst collector car rally experience I’ve come across. But what can we learn from it to help avoid getting caught in a similar bad experience?

First off, know with whom you are dealing. Rallies like the California Mille Miglia and the Colorado Grand have rock solid histories and reputations, and you needn’t worry with them. But if you are considering a rally with a limited or non-existent history, you need to check out the organizers, their qualifications, and their reputations.

I wouldn’t recommend shipping your collector car to a remote location and signing on with an inexperienced or unknown organizing crew, unless you have contacted references and satisfied yourself that all is likely to go well.

If the rally is to be held in an unfamiliar location, do some research. With this rally, some due diligence might have determined that the logistics of putting it on were very complex and difficult. Before plunking down your money, talk to the organizers and find out if they understand those problems, ask how they have handled them, and decide for yourself if they seem to know what they are doing.

Try to get a sense of the economics of the event. Many costs are fixed, and the organizer bears them whether ten or 100 cars participate. If it’s a new rally, will it attract sufficient participation to cover its costs? If not, the organizer might be forced to cut costs to stay afloat, which will devalue the experience. Ask about participation before you enter.

Gain a clear understanding of the cancellation policy. As you approach a deadline, stay in contact with the organizers. If it doesn’t look like the necessary participation level will be achieved, don’t be afraid to cancel. After all, much of the fun comes from being part of a large group of enthusiasts. A group of five or ten cars just won’t be the same. Pay by credit card whenever possible. That way, you may have some refund options.

Pay attention to the jurisdictions that would control your activities and the resolution of any disputes. Here, Chinese law would govern all. That may well limit recourse against the organizers. Also, it may affect legal rights and responsibilities.

In the end, the success of the event usually comes down to the location, the ability and style of the organizers, and the character of the participants. Collector car rallies are tremendous fun, and they offer the best possible venues to gain the maximum enjoyment from your collector car. If you haven’t participated in one yet, you shouldn’t let the experience of the SCM China Rally gang keep you from doing so.

But this case demonstrates that you have to use some due diligence beforehand-all rallies are not created equal. The collector car hobby is all about having fun with your car. If you’re going to pay to ship your car and yourself thousands of miles, then pay even more money to have a crappy experience, you might as well forget cars altogether and stay home and putter in the garden with your wife. It would certainly be cheaper and probably much more fun.

To read Bill Woodard’s account of his unanticipated, unplanned, unescorted three weeks in China, go to www.sportscarmarket.com/china.