#23 - Lift Off

With our livers gratefully waving goodbye to December and our partners firmly coercing us in the direction of the gym to address the festive physiques that only the amalgamation of turkey, sprouts and Christmas pudding can muster, I wish you all a very happy New Year!

2020 most definitely has the potential to be an eventful year for the automotive industry and in particular, investable classic and modern cars. In the UK, the Brexit shaped cloud that has been hanging over our economy finally appears to be clearing as we find ourselves with a majority government not only capable of moving forward to a definitive Brexit solution (for better or worse) but also no longer hand tied and able to implement significant policy changes in the UK. That said, the biggest win to come out of the recent political renovations has been that with renewed clarity and certainty on the UK’s path moving forward, there is likely to be a rejuvenated propensity to spend by consumers and companies alike…….and that’s great news for our economy and the automotive industry.

So for the 1st half of 2020; where are we focusing and what are the most interesting opportunities? Unsurprisingly (or underwhelmingly), a lot of the same places we were looking at the end of last year; the only difference being we are now likely to see some more defined and positive price movements in the investable car market.

Large naturally aspirated engines with manual gearboxes – this continues to be our favourite trade as we move into 2020 and to express it, we still see no better way than through the mighty Audi R8 V10 Coupe. Like the rest of the market, prices were particularly soft in 4Q19 with low mileage investment grade examples trading down in the low £50s and higher mileage cars in the low-mid £40s. We expect to see a nice rebound in prices over the next couple of months with early pre facelift (2010-2012), low mileage cars trading back up to the high £50s by year end. Other ways to express the same trade include the R8’s big brother, the Lamborghini Gallardo or the finest Aston Martin to come out of Gaydon in recent years, the Vantage V12 S. Between the 3 of them, they remain the last bastions of authentic, visceral and analogue manual supercar experiences.

The baby Porsche GT – unsurprisingly the latest iteration of the Cayman GT4 has been delighting car journalists and new owners alike and with its recent crowning as Evo Car of the Year 2019 (the automotive equivalent of an Oscar these days), you would be excused for assuming that the new car premium they are trading with should be hanging around for a little while longer…….BUT, with the unofficial announcement of a hotter, harder and faster GT4 RS in the works at Stuttgart, I would advise serious caution in touching one from a purely speculative perspective. Unlike the previous generation 981 Cayman GT4 which was limited to just 2500 units, the new 718 car although faster on paper, also currently has an unlimited unit production number meaning there will likely be more of them (especially if the insatiable demand for the previous generation is anything to go by) and given it is highly likely to be layered by the GT4 RS at some stage in the very near future, I would suggest saving yourself some money and sourcing a tidy 981 GT4 example. Back in July 2019 we had our entry point for this trade in the £60-70k area. With high spec low mileage examples now available in the low-mid 70s and many existing owners looking to sell out of them as their new 718 cars arrive, you will find the perfect opportunity to get your hands on a 981 at the right price in the next 3-6 months.

Noughties Ferrari’s – the result of Maranello chasing McLaren down the same “stack em deep and sell em (not that) cheap” path is that we believe most modern Ferrari’s (even the more exclusive ones) are likely to start experiencing higher rates of depreciation. It also had us looking through the back catalogue to find the last of the truly great, analogue Ferrari’s. In no particular order, the 430, 599 and 612 all jumped out. Each in their own unique ways offers not only a quintessential Ferrari experience but also an increasingly interesting investment proposition. We have long championed the 430 but as the possibility of another manual Ferrari becomes inevitably more obsolete, a naturally aspirated 3 pedalled, Italian V8 is a very desirable combination and like all of the Ferrari’s from this era, it is ageing gorgeously. The 599 GTB was the last Ferrari before the BHP arms race really took control. Even the monumental 599 GTO succumbed to the power over pleasure mentality that has engulfed the supercar market till present day. The 599 GTB didn’t however and in many ways is the more enjoyable and exploitable car out of the 2. Okay, unless you are lucky enough to have tracked down 1 of the 30 manual 599 GTBs ever built you will have to settle for the F1 gearbox but it is a hoot to drive, the flagship of noughties Ferrari’s and the definition of a classic Italian GT supercar. Unlike, the 599, the 612 was a more marmite-esque Ferrari. Its wide front grill and headlight configuration made it frequently compared with a fish and its chunkier kerb weight lacked the agility of its more nimble brother, but as far as 2+2 supercars of the time went, you needed look no further. A more tangible V12 + manual configuration with 199 cars rolling out of the factory with 3 pedals, why anyone would buy a Bentley Continental GT over one of these blows my mind and with the market beginning to remember why these cars were quite so special in the 1st place,  now is the time to buy.

Hot Hatches – As present day hot hatches become increasingly more plump, expensive and quite frankly un-hot hatch, we see there being a huge resurgence in demand for the traditional hot hatchback. You only have to look at things like the Renault Megane RS Trophy-R, Mercedes A45 S AMG and Audi RS3 to realise that the future, in pure driving terms, is looking relatively bleak. That is not to say that any of the above are unimpressive cars to drive, they just lack the simplicity that makes a hot hatch…….well a hot hatch. Maybe the coining of the “Hyper Hatch” is a more appropriate term for this new age of electronically aided, turbo induced,  shopping carts. Anyway, with Mini GP1’s available in the low teens, Renaultsport Megane R26.R’s available in the mid-high teens and Abarth 695 Biposto’s yours for just £20k, we can’t help but thinking these cars are hugely undervalued. What’s more, you only have to look at the price action we saw with the likes of Peugeot 205 GTI’s and early mark VW Golf GTI’s to realise that when people finally remember about these cars, prices go apoplectic.

So to 2020…….you could unwillingly endure dry January, buy a gym membership that gets used twice or convince yourself that veganism is your true calling. Although all are remarkable pursuits, if you want to be part of an alternative physical asset class that is likely to see some truly impressive returns over the next 12 months, the modern classic car market is the place to be and we are here to help you chart a course along the way.

Happy Motoring,

Greg