The Chinese Are Beginning To Collect Fine Classic & Vintage Cars
$RACE, $VLKAY
As China’s wealthy seek both new status symbols and investment opportunities, classic cars are in focus despite regulatory issues.
At the 16 October Bund Classic Car Show in Shanghai. vintage Rolls Royce and Mercedes-Benz cars were on the lawn of the old British consulate on The Bund as collectors gathered to promote classic car collection to both investment and lifestyle-minded Chinese elites.
Activities for visitors over the weekend went far beyond the auto exhibition, they including a forum on heritage investment, a classic concert, classes on table settings and wine-tasting, and a dress picnic on the lawn, sponsored by Ferrari, Rolls Royce, Vacheron Constantin, Christofle and Bonhams.
The event’s focal point was the Concours d’Elegance, a parade of the automobiles on The Bund followed by a selection of the most elegant model by a panel of high-profile judges.
In its 3rd year, The Bund Classic is an indication of a growing interest in collecting classic and vintage automobiles in China as the market booms globally.
“The classic car trend is taking up fast in China and several Chinese collectors are starting even to invest in cars overseas,” says Delphine Lignières, the founder of The Bund Classic organizer China Rendez-Vous.
Classic car collecting is “definitely a trend” in China, agrees Liu Tao, the vice manager of the Shanghai Auto Museum, which displayed 4 classic cars at the event.
“Before, people were most interested in collecting art. Now, cars are increasing in the country and the new generation has more opportunities to come into contact with cars. Their enthusiasm for cars is growing.”
Just a few weeks after The Bund Classic, the Classic Car Challenge China held its 5th annual event, in which drivers took 51 classic cars on a 1,200-km journey from Beijing to Shanghai. That is an interesting drive, I have done it in a modern car.
Wealthy Chinese individuals are seeking out alternative forms of investment, many are looking to classic and vintage cars as the market booms globally. More and more Chinese are taking part in overseas classic car auctions
At the Y 2014 Edition of the Pebble Beach Concours d’Elegance in California saw a growing number of Chinese in attendance. The automotive auctions sales that week posted a record of nearly $400-M.
Note: Warren Buffet once said investing in classic car is better than in gold, and a recent Knight Frank study on investment in collectibles found that the largest growth is connected to cars.
Collectors face some regulatory obstacles in China, where the import of used cars is banned.
Events like The Bund Classic play an important role in exposing potential collectors to the cars, as classic car shows, rally racing, and donations are the only ways one can legally transport a vintage car into China.
As a result, many wealthy collectors buy cars and store them abroad, according to Alexi Fung, the Hong Kong Managing Director of Bonhams auction house, which held the sale of the world’s most expensive vintage car ever sold at auction with the $38-M purchase of a Ferrari 250 GTO Berlinetta in Y 2014.
In addition to promoting the sale of its classic cars to potential customers at the event, Bonhams featured a display of jewelry, watches, and art prints for Chinese collectors to view. “For Chinese clients, the majority of them are collecting Chinese paintings and Chinese works of art,” he says, but in the vintage luxury car market, “we can see the growth as well.”
According to Mr. Fung, the purchase of a classic car or luxury item at auction should be a long-term investment.
China’s collectors are often motivated not only by financial incentives, but a passion for collecting, and many collectors are buying out of personal interest. They love cars and collect without caring much about how much the value will increase or with a goal of eventually selling in mind.
In addition to the classic cars, the event also featured displays by luxury automakers and art car sellers.
Ultra-luxury Italian sports car manufacturer Pagani, which only produces 40 examples a year, just opened its 3rd global showroom in Shanghai. Its global sales director Alberto Giovanelli says that the main aim of the brand “has always been to target a niche market for a pure luxury experience.”
Luxury brands like Ferrari and Bugatti are seeing high demand by ultra-rich in China.
Whether for investment, personal interest, or both, the goal of events like The Bund Classic is to spark wider interest in classic car collection among China’s wealthy by educating them about the market while at the same time demonstrating the benefits of the lifestyle in the international classic and vintage car collecting community.
Once the Chinese get into collecting cars they cannot stop themselves from buying them.
Have a terrific weekend.
Paul Ebeling
HeffX-LTN
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