Jaguar Land Rover goes after replica community

[saaby93]

Bodo said:

I've seen that line in particular:
Jaguar Land Rover is not going after private owners of pre-existing individual replica vehicles, nor insisting upon the destruction of their vehicles.

When they mention 'pre-existing' specifically, what may be their position about replicas that are not pre-existing, such as DeejRC's?

Open question - not directed at darreni specifically.

Why does everything have to have an extra 'pre-' on the front of it these days
What does pre-existing mean Before it existed?

You have to pre-book an appointment at the doctors. Surely it's just book an appointment.
Pre-book is something you do before you book it.

[DonkeyApple]

saaby93 said:

Why does everything have to have an extra 'pre-' on the front of it these days
What does pre-existing mean Before it existed?

You have to pre-book an appointment at the doctors. Surely it's just book an appointment.
Pre-book is something you do before you book it.

That's a good point. Technically are they not saying that they won't go after the replicas that will exist in the future but don't yet exist? Thus, it's all a non issue and completely green lit?

[Ambleton]

lowdrag said:

...And of course, they need the specialists who make parts for the replicas to make the parts to build their cars. engines from Crosthwaite and Gardner, wheels from perhaps Turrino, instruments from Smiths, body shells perhaps Shapecraft, and so on. If I was one of these manufacturers, I'd tell them where to stuff their orders.

I currently work as a design engineer for automotive OEMs and i've seen various sourcing contracts etc. JLR will have had any contracts with suppliers for a while and will have eye wateringly large "fines" for failure to meet target or late delivery, big enough to put any small business out of action.

Once an agreement is signed, the supplier is by the short and curlies and it is very difficult to back out of.

[aeropilot]

ettore said:

Let’s see, I simply don’t agree - tastes come and go but no other form of art, antique, property or trinket works that way.

I agree.

As you've said, the top money market for pre war Bentley's, Bugatti's, Duesenberg's, 540k Mercs etc., hasn't exactly tumbled since the generation that associated with them have passed away.....

E-Type prices will soften somewhat perhaps, as there are a lot of them around still, but C and D's etc., and stuff like DB4 GT's etc., are not going to be south pricewise.

[Fastpedeller]

ettore said:

DonkeyApple said:

I think there is a bleak future in general for vehicles from these eras at the current market valuations. They are very generation specific and that generation has begun stopping driving. The following generations aren't as interested in these cars and certainly don't exist in the same numbers with the same financial firepower.

I really don’t think this is true - this level of classic operates wholly differently and has a separate appeal. Your logic would mean that nothing old would ultimately have value and that’s clearly not true.

Go and try and buy a nice Bugatti 57SC or Bentley Speed Six. They’re not being bought by people who remember them. Veteran cars have continued to increase in value in there is literally no one alive who can remember them.

I think you’ll find people desiring C-Types for a long while yet.

Whilst DA makes some good points, the quantity of vehicles available will possibly still be far fewer than those able to afford (and want) them. Whilst most can't afford, there are still many young people with vast income - it only needs a very small percentage of the many people on Earth. Do some of the buyers fall into the category of "don't really want, but it's a good investment" type?

[DonkeyApple]

aeropilot said:

ettore said:

Let’s see, I simply don’t agree - tastes come and go but no other form of art, antique, property or trinket works that way.

I agree.

As you've said, the top money market for pre war Bentley's, Bugatti's, Duesenberg's, 540k Mercs etc., hasn't exactly tumbled since the generation that associated with them have passed away.....

E-Type prices will soften somewhat perhaps, as there are a lot of them around still, but C and D's etc., and stuff like DB4 GT's etc., are not going to be south pricewise.

Because it was the one that followed that drove the values up.

The generation with the greatest wealth, greatest number and most free time of any humans that have ever lived. This is a generation specific event that is now unwinding and will see a constant increase of supply but an absence of demand on the other side to balance it.

The very thing that you are referring too is the front end of that generational impact.

For example, there is a UK car collection that has been being tried to be sold under probate for that last year. It's 300 cars collected over 40 years at much lower values than today. The children don't want the cars but the market doesn't want them either. They've managed to sell off the halo cars from the collection via strategic private sales and auctions but the remainder they are stuck with. They've turned the collection into a fund to try and sell it out to retail agents, the sort that then try to sell it on to retail individuals and take 20-30% in fees but no one has taken it. They know they can't just sell them in the open market.

What they are going to have to do is break the collection up into small lots and parcel them out to various SoR agents while also getting others away in auctions.

That's a single car collection that is proving impossible to sell at current values and that has to be broken up and sold very slowly so as to not exceed the natural levels of demand.

Just one collection of one Boomer.

This is exactly why JLR are pushing out the recreations while there are still buyers and why their legal team is throttling external supply. The window is closing.

Nearly all these cars are in the hands of owners who will be seeking to sell over the next decade. That is a massive amount of supply guaranteed to hit an unregulated, unsupported market. Currently a single collection is having demand issues. Any day now another collection will join on the supply side and they will be in a race against each other to liquidate. Once that effect starts to deflate current values then demand will shrink as most demand emanates from a belief that values will rise and when they are falling that demand evaporates.

It's not just cars that this effect is appearing but other assets such as property. Large family homes will start to increase supply but there is nothing on the economic radar to suggest that demand at current prices will increase to match. Ergo, while property always goes up it's not in a straight line and this is why the general prediction is that while smaller homes will not have an excess supply issue and demand will remain strong, larger properties are likely to devalue as that excess supply has to find where the demand is.

The only element that has to be taken into account is currency devaluation and how much all the money printing flatters the assets being priced in those currencies.

[ettore]

No, I simply don’t buy your eeyore-ish postulations.

The value of any item is of course driven by supply and demand. In the instance of cars of this ilk, the supply is - I think we agree - finite. What we differ on is demand.

The world will continue to get richer, new wealth is being created and different generations, regions and wealth brackets will have their own tastes. The price of art by Hirst, Banksy and Emin continues to rise, let alone the Hockney’s and the Freud’s. I haven’t noticed a decline in the Monet’s, Picasso’s and Pisarro’s though. I’m also pretty sure that Da Vinci drawings aren’t being knocked out on EBay.

What you also fail to factor in is that people themselves evolve. I like to eat and drink different things than I did when I was 20. I like different cars, houses, sport, opinions and women. I admire different art, architecture, people and politics. I doubt I’m alone.

Your ‘boomer’ family may be having trouble shifting their car collection but I think we can be certain that it’s not full of WO Bentley’s, Alfa 8c’s, C Types and Gullwing Mercedes.

Edited by ettore on Saturday 13th February 14:08

[a8hex]

DonkeyApple said:

The generation with the greatest wealth, greatest number and most free time of any humans that have ever lived. This is a generation specific event that is now unwinding and will see a constant increase of supply but an absence of demand on the other side to balance it.

As an average they might have been the wealthiest, but it isn't Mr or Mrs Average that drives these things.
The rich of the younger generations are, I think, far richer than all but a handful of the rich of the boomer generation. Just look at the new car market. I once looked at buying a 1994 or was it 95 Aston Martin Volante, I think that year they made made 4 as that was all there was a market for. Look how many ultra luxury cars there are on the roads now and they're not being driven by boomers on the whole.

[DonkeyApple]

ettore said:

No, I simply don’t buy your eeyore-ish postulations.

The value of any item is of course driven by supply and demand. In the instance of cars of this ilk, the supply is - I think we agree - finite. What we differ on is demand.

The world will continue to get richer, new wealth is being created and different generations, regions and wealth brackets will have their own tastes. The price of art by Hirst, Banksy and Emin continues to rise, let alone the Hockney’s and the Freud’s. I haven’t noticed a decline in the Monet’s, Picasso’s and Pisarro’s though. I’m also pretty sure that Da Vinci drawings aren’t being knocked out on EBay.

What you also fail to factor in is that people themselves evolve. I like to eat and drink different things than I did when I was 20. I like different cars, houses, sport, opinions and women. I admire different art, architecture, people and politics. I doubt I’m alone.

Your ‘boomer’ family may be having trouble shifting their car collection but I think we can be certain that it’s not full of WO Bentley’s, Alfa 8c’s, C Types and Gullwing Mercedes.

Edited by ettore on Saturday 13th February 14:08

Total supply is finite but that's not what is being discussed. What is is variable supply and that figure is guaranteed to increase as a function of death. Let's say the total supply is 1000 units. In a normal market the actual supply might only be about 5 units. When demand is higher than that the values go up but if that supply to the market increases beyond the demand then prices go down. The supply of things like e types is going to increase over the next decade, that's pretty much a given. So the question is whether demand rises inline to support current prices or remains static or even falls. Given the wealth demographics involved then it's a pretty fair bet that over that period demand will dip below supply and so prices will fall.

It doesn't really matter what happens to global wealth in this regard unless it also shrinks which hopefully isn't likely.

And as we've already seen values dip recently when demand fell away it's kind of hard to argue your point.

[ettore]

No, you’ve just missed the point (or haven’t read it).

[Fastpedeller]

I'm going to wait another 30 years and then buy an E-Type when the prices plummet ....... Hmm, I wonder how many nonagenarians drive E Types?

[DonkeyApple]

ettore said:

No, you’ve just missed the point (or haven’t read it).

Not really. Markets go up and down even if they rise over longer time period. You're talking about macro trends whereas all I'm talking about is micro, the changes in supply and demand that causes those fluctuations.

What's very interesting about this market is that it is fundamentally in the ownership of a group that has already begun divesting of assets. Plus, the following demographic is smaller and poorer has greater commitments elsewhere and different interests.

It is inevitable that net of currency devaluation manynof these chattels will decline and in the case of cars as it is an unregulated and unsopported market there is nothing to stop there being a rout.

[ettore]

Now you’re trying to deflect!

C-Types (and their ilk) aren’t all owned by people on the verge of popping.

There aren’t very many of them

They’re exceptional collectors pieces that will continue to be sought after by those lucky enough to have the means to acquire them.

[Touring442]

ettore said:

Now you’re trying to deflect!

C-Types (and their ilk) aren’t all owned by people on the verge of popping.

There aren’t very many of them

They’re exceptional collectors pieces that will continue to be sought after by those lucky enough to have the means to acquire them.

Indeed. Nico Rosberg has a 300SL Gullwing and his enthusiasm is shared by other younger folk, enough of whom will have the money to buy one.

Humber Hawks however - that may be different.

[ettore]

Your argument is about generational change - not sure that counted as a micro trend in my old economics textbooks.

Spreadsheets rarely explain why why people covet desirable things.

[TarquinMX5]

DonkeyApple said:

ettore said:

..... and different interests.

It is inevitable that net of currency devaluation many of these chattels will decline and in the case of cars as it is an unregulated and unsopported market there is nothing to stop there being a rout.

I think the 'different interests' is likely to be a significant factor in decades to come. My sample size is small, ie in the tens rather than hundreds or thousands but, with the odd exception, the vast majority of those I know who have classic cars, or small collections, have mostly expressed a similar view, that nobody in their family in the generation(s) behind them has any interest whatsoever in what they see as 'old cars'. There's a big drive in younger drivers for electric and connectivity etc. but as for tinkering under bonnets, checking oil, checking tyre pressures etc., it's simply 'why bother'. The E-type has been mentioned but production of these stopped c45-years ago, so you have to be of a certain age already to have any real memories or connection to these; to a large proportion of the population they're cars they've only seen at shows or in books, assuming they read books, that is.

I'm not suggesting that there'll be no interest at all, simply that the majority of the old-boys of the future might not have the same interest in nostalgia when it comes to cars that the current old-boys have. Whether the wealthy from the emerging markets will have an interest in old British cars in years to come, who knows, but if they do I can't imagine there being much interest in the day-to-day cars. Of course, as with most of my attempts to predict the markets, no doubt the opposite will happen

[ettore]

Possibly true but not relevant in the context of C Types and their ilk.

[lowdrag]

Well, there is a slight difference in rarity and collectability when one considers that there were 53 C-types, 16 XKSS, 12 lightweight E-types, 88 D-types (of which some were merged and some became XKSS's) and then there were 72,000 E-types.

[DonkeyApple]

ettore said:

Now you’re trying to deflect!

C-Types (and their ilk) aren’t all owned by people on the verge of popping.

There aren’t very many of them

They’re exceptional collectors pieces that will continue to be sought after by those lucky enough to have the means to acquire them.

It really doesn't matter. When a market sells off it sells off. And when prices soften so does demand because there are enough buyers who are only in the market at that point in time because values are secure.

It's not deflecting just because I mentioned another car. Things don't go up endlessly in a straight line.

[ettore]

DonkeyApple said:

It really doesn't matter. When a market sells off it sells off. And when prices soften so does demand because there are enough buyers who are only in the market at that point in time because values are secure.

It's not deflecting just because I mentioned another car. Things don't go up endlessly in a straight line.

Indeed they don’t.

No evidence to suggest selling off...