Regardless of everything else that’s going on in the world, 2020 is proving to be the Year of the Collector Car.
It is, in fact, the busiest time we have known for importing vehicles of all types in over 15 years.
While the shock and uncertainty of the Covid-19 pandemic caused a noticeable reduction in Japan car auction prices between February and April 2020, a surge in demand that started in May has been pushing prices skyward on all classic models.
Mainstream model pricing was also reduced early on as many dealers worldwide ceased buying stock due to enforced shut downs.
However, buyers are now back in force with dealers competing hard to replenish their inventories and enthusiasts hunting desperately for collector cars which are increasingly difficult to find.
Why is this happening ?
Prices are always driven by supply and demand, and the underlying contributors vary.
In this case the pandemic triggered a sudden demand shock which subdued buying activity almost overnight, resulting in lower prices for the first couple of months as financial markets saw rapid declines, consumer confidence took a major hit, and the world grappled with potential consequences and how to respond.
With buyers all re-entering the market around the same time, increased competition and reduced stock levels for some models then resulted in significant upward pressure on prices.
There is also something deeper in play here thanks to the impact of this situation on base human psychology.
Discussions with a large number of private buyers every week provides us with a good insight into how buyers view the market generally, why they are buying and their outlook on the future.
After the initial 2 to 3 month shock and re-evaluation period early this year, from May we noticed a definite change in attitude with buyers spurred not only to buy “before it’s too late”, but also prepared to increase their budget substantially to get the best cars.
We believe this reflects a broader group psychology which has been triggered by the realisation that life is short, the world is volatile, and things can change in an instant.
It seems there has been a global change of mindset – if you want to do something, you’d better do it while you have the chance.
When it comes to buying collector cars and the new price records being set weekly, there is a clear signal that buyers are thinking: “I want it now, I will pay what I have to as it’s never going to be any cheaper.”.
The fact that most of the world has been in lockdown with no opportunity to spend disposable income on travel or social entertainment coupled with more free time, has probably also had an impact on the purchase of vehicles from Japan – which can be done entirely online and has remained virtually unaffected by the pandemic.
Will prices come back down ?
For mainstream models (ie. run of the mill, daily use vehicles), YES.
As the supply chain re-establishes and time goes on, prices will level out and common vehicle models will once again continue to depreciate at the usual rate.
For collector cars, our opinion is NO.
We’ve been sourcing the best vehicles for enthusiasts for over 20 years, and have NEVER seen demand for collector cars like we have in mid-2020, with some of our clients searching not only in Japan but in Europe, Malaysia, HK, the UK and elsewhere at the same time.
New price records are being set weekly for limited edition models, rare colours and any low km vehicle, with sellers increasing their reserve prices in response to the overheated market.
Based on the level of demand and the ever-dwindling supply of good quality collector cars – and barring of course another global catastrophe – the only direction we see for prices to go is up.