The Impact of the Euro on Vintage Ferraris

In short... No!

The long answer is clearly far more complicated and open to an endless debate.

Let it begin if you wish here.

Cheers,

Bill

 

it has nothing to do with any particular currency... governments are printing new money at insane rates... world economies are in deep debt... pretty soon the notes are going to run out of room to print the zeros... arbitrage between different currencies occurs at much greater amounts than the price of any Ferrari... it's not worth the effort of any Ferrari purchaser to be concerned with what currency they will use to pay... and IF the amount is large enough they already have the best currency to use... most multinationals have bank accounts in the major currencies anyway, they just select which account to use... most international banks are digital and don't use checks to effect transfers... any aomunt of money is digitally transfered between accounts in minutes...it's the US that is in the dark ages when it comes to banking and uses checks

 

Cheesy, it doesn't quite work that way. Although I have bankaccounts in various currencies and can move my money around when I want to, I still have to buy a car in a particular currency i.e. the car is for sale in Europe or in the U.S.. So I still have to consider the exchange rate and it can make a buy attractive or unattractive. The effect of the weak Sterling against the Euro on the market in England is well documented, but this effects only cars that are either LHD registered in England, or niche cars (such as prewar or cars that cannot be found in LHD).

For the influence on US prices, I think it depends a lot of which type of market the car moves in. It is a fact that US spec cars are not as desirable in Europe so this affects prices of US spec Daytonas, GTCs and so on in Europe. Nonetheless, if the price gap is sufficient, people will import them. For rarer cars, it hardly matters and then the market just starts becoming global, especially since the advent of the internet.

Ultimately, I think the exchange rates do affect parts of the market, but the Euro/dollar rate is not, and has not been, the main driver for the current surge in prices. The euro was already at $1.20 nine years ago, years before the surge.


Onno

 

As I mentioned before, I don't think that's the driver at all.

The euro has tanked several times since 2008 and many people over here have been very scared of it collapsing in its entirety. You can see that the overall trend from 2008 to now has in fact been in favour of the USD.


Onno
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Sterling weakness does effect Sterling assets in the UK.

Attend a premier London auction and you will see that the majority of lots are going to overseas buyers. The same is true with prime residential property.

I also have a friend who has started shipping used Harley's to France, registering and selling them. Exchange rates are a large factor in the equation.

I believe that over the long term, sterling weakness will ultimately work it's way through to increased values for UK vintage Ferraris. However, this is more likely at the top end where the buyers/dealers operate in a global market

There will always be a price differential with a RHD car. But only to buyers in countries that drive on the wrong side of the road.

 

Lots of Euro folks at the auctions in Amelia Island this week

 

whenever there is uncertainty or anticipated change in things financial, disintermediation begins to come into play... which is what we are beginning to see...some are driven by desire for safety, while others are driven by potential gains... there is a lot happening with the world economies now...

 

The US Dollar is still the world's reserve currency. It took 50 years to ween from the British Pound. It will take time for the US to lose its status. Still a hugely productive and rich nation.

Pricing in USD is pretty much the world standard. The US financial markets can move trillions very fast.

I do not believe Europe is setting the standard for Fcar values. If anything, the US is. Still have more millionaires and billionaires than anywhere else.

Europe is basically bankrupt. Other than French wine, they don't really produce anything the rest of the world needs with the exception of Germany which is the export engine of Europe. the rest are pretty much just sucking up resources instead of producing them in any significant way.

The Euro$ was an experiment that failed. The cost of maintaining it will be too expensive at some point. But the politicians cannot admit they were wrong and will keep the game going as long as possible. Germany benefits from the Euro$ because they are in effect using an undervalued currency to export to their neighbors. If they still had the Dmark its value would be so high that it would be difficult to export to Italy, Spain, Greece, Portugal et al.

 

I miss the days vintage section was all about old cars. Now it is all about markets and money.

Everybody seems to have an opinion.

 

don't forget Ferraris

Kim

PS: January US trade deficit $45 billion. An awful lot of French wine

 

Very true. But this development is almost unavoidable given that values have risen. I also think the internet has given the platform for everyone to have a voice. The advantage is that we have now more information at our fingertips in order for us to make better decisions. At the end of day though I think it all comes down to enjoying the cars and having fun with them. Which is what thankfully most of the owners of vintage Ferrari's still do!

 

Whether true or not it's one more nail in the coffin that high classic Ferrari sales are being driven not by want of the cars but by pure speculation.

 

These cars are no longer cars they are financial instruments.
Anything over $200k loses its functional utility as a car.

 

Most of these cars are off the road. I went to visit a very nice Italian car collection this winter. the owner of the cars had not seen many of them in 5 years let alone driven any of them. It is mostly a business decision for the owner to buy the cars.

 

Doesn't help that it's winter, don't really want to take mine out on salt encrusted roads at the moment.

With summer approaching can talk about actually driving them again.

 

I really think this is rare and an exception. Most owners drive the cars. Perhaps some cars are not driven but are trailer queens shown only at Concours but at least we see the cars. Just look at the turnout this year at Cavallino. On a side note I am not sure it was a great business decision to not drive the cars for 5 years. That will be expensive for him to correct.

 

The cars are run but by his staff just to keep them in shape to sell. I know of several other collections that are similar so it is not a rare situation.

 

if you are not going to drive them yourself, why not just buy a Piccaso, Monet, etc.?

 

One collector I know has those and Modigliani too.

 

I know some guys that do buy art, stick it in a museum and never look at the art. Same scenario, different material.
Additionally, there are specialist art buyer out there who buy art for "those" of sufficient wealth.
How would you feel about someone going and buying your next Ferrari for you.

 

As someone who drove an LM on the open road, and at Le Mans, and SWB as well,,,and not in past century! I disagree with the concept. However there are "collectors" with " someone going and buying" for them and even driving or them...what about having someone paying for them too!

 

Is it possible to have a bubble of fchat threads about bubbles?