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"We certainly are seeing euros and pounds come in and scoop up cars," reported David Gooding, president of Gooding and Co., a classic car brokerage. "The cars are cheaper for them now." The weak dollar has set the stage for a much anticipated sale by RM Auctions Inc. in Monterey, Calif., during the Pebble Beach Concours classic car show August 15-16, he says. For the dollar amounts involved in car collecting, even small fluctuations can add up to a big price difference for European and British buyers. "When we are talking about a $100,000 car, that is 70,000 euros and that is quite a difference," Mr. Gooding says. "At this time it is very attractive for Europeans [to buy cars in America] because of the exchange rate," says Swiss Ferrari collector Marcel Massini. "At the moment there is tons of money around, tons of cash for buying cars," Massini added. Still, U.S. dealers realize they are selling to a global market and have adjusted prices accordingly, reports Mr. Massini. "They raised their prices by a hundred grand overnight." Buyers of more common antiques and collectable models are more sensitive to price changes, says Dirk Libeert, a Belgian dealer who imports and exports exotic cars. "The more common the car and the bigger the availability, the more importance will be attached by a European importer to a competitive price and that is where a weak dollar becomes a very motivating factor with a serious impact," he says. This isn't the first time overseas collectors have taken advantage of a favorable currency exchange, according to Mark Hyman, president of Hyman Limited, an international dealer in classic cars. "The Europeans were here in force in 1989, '89 and '90." Much like art collecting, classic car collecting has always had an international element. "Borders are not barriers," says Mr. Hyman.
Japanese collectors also bought cars during the local economic boom of the 1980s, but many were sold back to U.S. collectors during Japan's recession in the 1990s, Mr. Gooding says. The attraction of exotic and collector cars as investments has been driving prices upward in recent years, which has exaggerated the dollar bargain-hunting trend, says Mr. Libeert. "Prices of the desirable and rare European sport cars haven't stopped rising over the last 10 years, building up a platform recognizing their intrinsic value and reliability as a investment," he says. "It is this growing interest on the different continents that is offering increasing perspectives for the investor or collector." The recent sale of the 1961 Ferrari 250 GT California Spyder previously owned by actor James Coburn for a record 7 million euros bears out his observations. New buyers from Russian and Chinese boomtowns who are unknown to the typically tight-knit classic car community are raising concerns that well-known historical automobiles could vanish from public view. "If the Russians start buying cars, and the Chinese, will we ever see the cars again?" says Mr. Gooding, Not all of the foreign buyers have had to cross an ocean to exploit exchange rates. "We've had a tremendous influx of new bidders, Canadians especially," says Barrett-Jackson Auction Company president Steve Davis.
Mr. Gooding says his company has been selling to South American buyers as well. These new buyers and return buyers from Europe and Asia are focusing on European classic cars, typically those designed specifically for the U.S. market and sold initially in the South, according to Art Spinella, president of CNW Research. "The cars that the British buy are MGs and Triumphs that have been in the U.S. since new," he says. "They can get them in better shape than they can get them in England." Despite a greater appreciation by collectors around the world for classic American cars from the 1950s and 1960s, most overseas buyers don't want them for the practical reason that the roads are too narrow, Mr. Spinella says. Although the weak dollar may make cars less expensive in euros, pounds or yen, the attraction is still the cars themselves, the experts stress. "If a great car becomes available in the U.S. it is likely it will have broader international appeal than before," says Ian Kelleher, managing director of RM Auctions which specializes in collector-car sales. "They care about price, but it is not as important as the car itself," Mr. Gooding says. "When it is one of a handful in existence, if it is available and you want it, you are going to go for it." Return to News Articles Return to News Archive |
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