#16 - Size Opens Eyes
“4 cylinder engines sound better than 8 cylinder ones”….. Said no one ever! We read with a heavy heart a rumour that the good people at Mercedes were contemplating replacing the V8 engine in the next generation of their illustrious flagship model, the C63 AMG, with a puny 2 litre 4 cylinder attached to some form of hybrid system….aka witchcraft. Its ongoing proof that the emissions bureaucrats are still keen to archive the remaining large capacity naturally aspirated engines to the history books. That said, there are a couple of positives to come from this.
Firstly, this race to the capacity bottom has created a breeding ground of innovative new technology from manufacturers……and this is a great thing. Gone are the days of relying on the same engine to see them through multi generations of a particular model line (Jaguar we are looking at you). Instead, manufacturers are having to adapt, get their thinking hats on and be creative about future efficient solutions. At the moment, results tend to involve the use of hybrid/electric power in some form but more interestingly, we are seeing them look to squeezing as much power out of the smallest engines as possible.
Back in 2006, Audi released the new S3 model which had a 2 litre turbo engine putting out 260bhp. At the time, everyone was amazed by the amount of reliable and usable power they had unleashed from such a relatively small engine. Fast forward to present day and Mercedes have just launched a new 2 litre turbo engine capable of producing 415bhp and 369lb ft of torque. To put that into context, Audi’s 4.2 litre naturally aspirated V8 engine found in the 1st generation R8 only produced 420bhp and 317lb ft torque. This is a monumental achievement by Mercedes and a theme we are sure to see playing out more and more amongst their competitors. However, it’s not what gets us excited here at Contemporary Classics.
No, what gets us going is the by-product of all of this. No more new V8s being built means that the residual values of the existing ones are likely to become more buoyant. So where should you be looking?
The 2007-2010 vintage of big German powerhouses is a good starting place. We have long championed the value of the manual B7 V8 RS4 so we won’t bore you again with that but what about cars in the BMW and Mercedes lineup. For BMW, you need to focus on the E90 M3. The last car they built to sport a naturally aspirated V8 and it’s a corker. 4 litres of high revving Bavarian muscle the beauty of which was not only its usability but also the fact you could get it with a manual gearbox. With a bigger budget, stretching to the stroked out 4.4 litre found in the M3 GTS and CRT will not disappoint. Often in the shadows of the Porsche 997 GT3, the GTS and CRT are rarer cars and actually likely to become more desirable future classics. For Mercedes, the R230 SL63 AMG, W204 C63 AMG or the W212 E63 AMG are the ones you need to focus on. Why? Well they all share the M156 6.2 litre naturally aspirated Mercedes V8….. also the last naturally aspirated V8 that the company built and used. The purists will wince that none of them were available with a manual gearbox but it doesn’t really matter in this case. With the V8 being put out to pastures, all 3 of these models will become increasingly more desirable. What’s more, given big engined Merc’s uncanny ability to depreciate; you will be able to pick them all up for relatively affordable money.
The next couple of years look to be a fascinating time of change in the automotive industry. Looking as an investor, its particularly exciting because the value of modern classic cars as an alternative asset class will become increasingly more apparent. In fact the death of the V8 is actually acting as a perfect catalyst to encourage valuations of these “ol V8 motorcars” to begin appreciating a lot sooner than we have seen historically..
Happy Motoring,
CC’s Investment Team