Hypercar bloodbath?
Discussion
I've just read a piece by Harry Metcalfe in Octane magazine. The main points are;
- McLaren made around 100 F1s and will make 500 P1s
- Ferrari's F70 will be made at the same time with estimated production of over 500 (Enzo about 400)
- Porsche took plenty of orders for the 918, which promptly fell away when the £750k price tag was announced
- Jaguar will also launch their C-X hypercar at the same time
His point was not only the ambitious volumes from all of them during difficult times (even China is beginning to slow down) but the fact that it is all happening together.
Here's the question: this must lead to a used bloodbath about 2 years on, so is this an opportunity for car lovers like many of us, who might drop £200-£300k on a future classic but not £750k-£1m?
(Remember, even the Enzo fell early on from memory, in good economic times).
Secondly, if this happens, what will a load of low priced new hypercars do to the existing markets for F1, F40, F50, Enzo, Carrera GT and perhaps even Zondas?
Where will the value be?
- McLaren made around 100 F1s and will make 500 P1s
- Ferrari's F70 will be made at the same time with estimated production of over 500 (Enzo about 400)
- Porsche took plenty of orders for the 918, which promptly fell away when the £750k price tag was announced
- Jaguar will also launch their C-X hypercar at the same time
His point was not only the ambitious volumes from all of them during difficult times (even China is beginning to slow down) but the fact that it is all happening together.
Here's the question: this must lead to a used bloodbath about 2 years on, so is this an opportunity for car lovers like many of us, who might drop £200-£300k on a future classic but not £750k-£1m?
(Remember, even the Enzo fell early on from memory, in good economic times).
Secondly, if this happens, what will a load of low priced new hypercars do to the existing markets for F1, F40, F50, Enzo, Carrera GT and perhaps even Zondas?
Where will the value be?
Edited by LukeyLikey on Sunday 7th October 08:09
Edited by LukeyLikey on Sunday 7th October 08:12
I haven't read the Octane piece but your question, and from what I gather from it, Metcalfe's point also, makes for much head scratching. I think there could indeed be a bloodbath. But I'm not sure mere mortals will not be consumed by it too because there are so many other negative moving parts.The Chinese slowdown is only one item. The Euro remains a car with no sustainable fuel and is crushing the life out of Europe, we have record youth unemployment in most developed economies, we have a US with 15 trn dollars of debt to sort, we have a rapidly growing culture of envy in the UK which will result in new higher taxes on cars and so called mansions (which will have a devastating effect on both markets) we have a Russian president who is being openly ridiculed by his people - just see his geese video on youtube (he's not one for criticism), we have countless issues in India and Africa and the Middle East makes Hurricane Katrina look like a light shower. I've decided not to buy or sell anything for now which is capitulation of the worst order. I saw the F12 in Paris on trade night two weeks ago. The 458 Spider was there too. Usually I go very weak at the knees especially for Fezza V12s. But my reaction this time was why on earth would I sink any cash into these when the outlook is so grim. And I thank goodness, am in a better position than most. So unfortunately, if there is a bloodbath at the very top end (and the case is depressingly compelling) I fear it will be part of a much wider deeper rout. Fortunately the brilliant 70Proof helps me get through it for focusing on what's really important. 2 599 GTOs and an Aventador, 3 abreast screaming at 7000 rpm through a tunnel. Bring it on.
ThatPhilBrettGuy said:
If the market falls away they just won't make them. I heard rumours that Aston won't make the full 77 One77's of example.
They're all made and sold from what I read; Shmee has a register of where each one is. I agree though, if the market isn't there, they'll just stop making them.
matc said:
ThatPhilBrettGuy said:
If the market falls away they just won't make them. I heard rumours that Aston won't make the full 77 One77's of example.
They're all made and sold from what I read; Shmee has a register of where each one is. I agree though, if the market isn't there, they'll just stop making them.
The used market is very bizarre though, there is very little talk anywhere of what the values are at and a surprising number are for sale but just not talked about anywhere.
The One-77 had the advantage of hitting the market with only the Agera really as a current hypercar on market with a much longer waiting list and not really the same kind of car as neither of these were being built in the hundreds. The Huayra wasn't around yet and obviously no P1, F70 or 918 either.
I agree prices are stretched although this phenomena can continue for some time.
There will be more cars available in the 750-1mio price bracket than ever before, but my issue is more to do with the complexity of these cars. We know the Veyron is a technically brilliant thing but residuals are horrible largely due to horrific running costs. The Why-ra is undoubtably amazing but again a very different animal from the Zonda which is ultimately a very simple car. The Enzo and the 918 will have all sorts of new technology as will the P1. Undoubtably, there will be a group of owners for whom this is not an issue but I think it's a big one for the majority of potential owners.
I also think that if you start to see the HyperCar taking a downturn you'll also see residuals on cars in the 160-350 range smashed due to the increasingly high production numbers. It wasn't long ago that the prices of comparable new cars in this bracket covered the 90-200k range.
There will be more cars available in the 750-1mio price bracket than ever before, but my issue is more to do with the complexity of these cars. We know the Veyron is a technically brilliant thing but residuals are horrible largely due to horrific running costs. The Why-ra is undoubtably amazing but again a very different animal from the Zonda which is ultimately a very simple car. The Enzo and the 918 will have all sorts of new technology as will the P1. Undoubtably, there will be a group of owners for whom this is not an issue but I think it's a big one for the majority of potential owners.
I also think that if you start to see the HyperCar taking a downturn you'll also see residuals on cars in the 160-350 range smashed due to the increasingly high production numbers. It wasn't long ago that the prices of comparable new cars in this bracket covered the 90-200k range.
Do remember that McLaren recently had a odd press release where they said that they would build a maximum of 500 P1 but would actually just build the amount to order therefore there could be only 100 made! It depends if they have a low end cut off.
I do find it interesting that, in the wake of the Paris release, the internet chatter would lead you to believe that there have been 500 sold and another bazillion people on a waiting list but I don't believe that that is the case. Allocations are still open.
I personally really hope the CX75 road car does well - I really love the XJ220 and would love to see them sell this car without the hassle and myths like those that surround the XJ220 (but perhaps that all adds to its allure?).
Saying that, I want the P1 to do well too, I think the 918 is stunning and am excited to see the F70. Put it this way, I think this is a brilliant time for choice for potential buyers (what with Koenigsegg and Pagani too) but the manufactures projected production numbers could be optimistic in the light reasons others have mentioned and more.
I do find it interesting that, in the wake of the Paris release, the internet chatter would lead you to believe that there have been 500 sold and another bazillion people on a waiting list but I don't believe that that is the case. Allocations are still open.
I personally really hope the CX75 road car does well - I really love the XJ220 and would love to see them sell this car without the hassle and myths like those that surround the XJ220 (but perhaps that all adds to its allure?).
Saying that, I want the P1 to do well too, I think the 918 is stunning and am excited to see the F70. Put it this way, I think this is a brilliant time for choice for potential buyers (what with Koenigsegg and Pagani too) but the manufactures projected production numbers could be optimistic in the light reasons others have mentioned and more.
matc said:
I agree though, if the market isn't there, they'll just stop making them.
I think that is a whole lot harder to do than it sounds. There will be loads of suppliers, who themselves have suppliers, of components and sub components, who will all have amortised development costs over a minimum amount, which. I doubt will be anything like 100, especially if their planning is to supply towards or even above 500. They just won't be able to keep a lid on the costs if they drop the volume. Being a company, they will likely protect themselves by keeping volumes up and 'finding homes' for the additional production.
This means the customer quietly pays in depreciation and the market goes weak when it discovers there has been an oversupply about 2 years on.
The points made about the clouds on the horizon all over the globe are highly relevant. I think most of these things may not end up being as bad as they sound, but it definitely causes real uncertainty and a lack of confidence.
With that will come big opportunities (in cars and other things too) since high volatility leaves lots of winners and lots of losers.
Might be very interesting..
The Metcalfe piece is a single column on p23 of November's edition if you're interested.
bertie said:
Wasn't the "plan" to make 500 F1s but they only made 115 in the end.
Pretty sure it was only going to be 200 (or maybe 300) so only making roughly 50% isnt great as I guess the profit for Mclaren had been based on the full figure. I presume the initial asking price would have been based on dividing the developement costs+ proffit to determin the quantity of cars?ibisti said:
bertie said:
Wasn't the "plan" to make 500 F1s but they only made 115 in the end.
Pretty sure it was only going to be 200 (or maybe 300) so only making roughly 50% isnt great as I guess the profit for Mclaren had been based on the full figure. I presume the initial asking price would have been based on dividing the developement costs+ proffit to determin the quantity of cars?Unfortunately, a hyper car bloodbath won't help mere mortals due to the veyron sized running and repair costs. This will mean there is no natural depreciation point at which the mortals can afford to wade in and provide price support. That money will go to proven and reasonable to maintain metal- eg the F40. Now, fast forward 20 years and with a big dose of inflation, the hyper cars might just start to make financial sense... Sounds like 1989 all over again...
AndrewD said:
Camlet said:
2 599 GTOs and an Aventador, 3 abreast screaming at 7000 rpm through a tunnel. Bring it on.
That was a great day 
gentleman, i salute you.... 
look at it another way, is the hypercar the new 'art' market..... what is happening in the modern art world... have prices tumbled, if not, might we be seeing the rich invest in hypercars seeing them as a commodity as they did modern art..... if the modern art market has crashed, then the bubble will truly burst... ps. what is modern art..... a con to the senses and wallet as far as i can see....
AndrewD said:
Camlet said:
2 599 GTOs and an Aventador, 3 abreast screaming at 7000 rpm through a tunnel. Bring it on.
That was a great day 
70proof said:
AndrewD said:
Camlet said:
2 599 GTOs and an Aventador, 3 abreast screaming at 7000 rpm through a tunnel. Bring it on.
That was a great day gentleman, i salute you.... look at it another way, is the hypercar the new 'art' market..... what is happening in the modern art world... have prices tumbled, if not, might we be seeing the rich invest in hypercars seeing them as a commodity as they did modern art..... if the modern art market has crashed, then the bubble will truly burst... ps. what is modern art..... a con to the senses and wallet as far as i can see....
70proof said:
gentleman, i salute you.... look at it another way, is the hypercar the new 'art' market..... what is happening in the modern art world... have prices tumbled, if not, might we be seeing the rich invest in hypercars seeing them as a commodity as they did modern art..... if the modern art market has crashed, then the bubble will truly burst... ps. what is modern art..... a con to the senses and wallet as far as i can see....
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