Inside the $24 billion world of classic car collectors | CNBC Reports

Inside the $24 billion world of classic car collectors | CNBC Reports

Over the last 10 years, classic cars have been
one of the best-performing luxury assets. According to Knight Frank’s
Luxury Investment Index, the value of these assets has
grown by 288% over a decade. So, why are classic
cars so popular? The idea of collecting a mode of transport can be
traced all the way back to 17th century France when the crème de la crème of society would
gather to judge their horse-drawn carriages. But Karl Benz’s development of the first
true, practical automobile in 1885 revolutionized the way people traveled. And it wasn’t
long before cars replaced carriages at these events. Collecting these assets is still popular today,
attracting wealthy car lovers, from Italy to Kenya, who can dish out as much as
$48 million on a single car. These collectors tend to join exclusive car clubs and
gather at various events called Concours d’Elegance, which is French for
“competition of elegance.” “Hey guys, welcome to my
Triumph Stag channel.” More recently, classic car enthusiasts
have also built communities online, showing off their collections on social
media platforms such as YouTube. I want an inside look at this exclusive world,
so I’ve come to meet up with Luke Madden, the events director of one of London’s
classic car events, the City Concours. What brings everyone
together is the passion. A lot of people will know each other just from
coming to these events and sitting down having a glass of champagne and talking about
what they love, which is classic cars. One man who shares this passion
is multimillionaire Rodger Dudding, who claims to own the largest
collection of classic cars in Europe. I know it looks like I’m in a regular
garage, but don’t be fooled. It holds Rodger’s $49 million collection
of more than 400 classic cars, which he has been amassing
for more than 50 years. If I see something I like and it appeals to me
and I can afford to buy it, I’ve bought it. I like things mechanical. That’s what I think attracted
me to cars and motorcycles in the first instance. By the time I was 16, I had my first
motorcycle which I had built at home. And Dudding is not alone. His cars are so popular that they have been
featured in many films and television shows like Peaky Blinders, Bohemian Rhapsody, Downton
Abbey, the Crown, Mary Poppins and more. So, what makes these
classics so special? It’s the design function with classic cars as
opposed to most modern, present-day vehicles. They really all come out
in a singular jelly mold. At the start of the 20th century, cars were relatively
expensive and unaffordable for the masses. Many of the cars created during this time,
such as this 1912 Rolls Royce Silver Ghost, were stylish, bespoke
and of limited supply. In 1908, the first Ford Model T rolled off the factory line,
making it the first mass-produced and affordable car. But Ford wasn’t the only
low-cost manufacturer. General Motors CEO Alfred Sloan famously wanted
to create “a car for every purse and purpose,” with GM’s Chevrolet brand leading the
charge in the low-cost segment. Perhaps even more importantly to classic car
lovers, GM also invented the yearly model change. Unlike the Model T, which was produced for 19 years,
GM rolled out a new version of its vehicles annually. Their release became highly
anticipated national events. In the 1930s, GM’s market share
of cars in the U.S. overtook Ford’s, and it wasn’t long before car ownership
reached over 80% of American families. In the 1970s, many economies were flourishing,
pushing up car ownership rates worldwide. The boom of the Japanese automotive industry
during that period helped fuel that growth. But an oil energy crisis in 1973
caused fuel prices to skyrocket and spurred change in
the automotive industry. Automobile manufacturers reacted to this change by
focusing more on the practical aspects of a car, like safety and efficiency,
rather than just the style. With mass production, it’s much simpler
to turn out a car like a sausage, without a great deal of individual styling, which keeps
the price down, therefore makes cars very affordable. Collectors like Rodger are nostalgic for the stylish,
bespoke cars produced in the 20th century. When selecting their ideal classic car, these collectors
tend to look out for the car’s make and history. Also important is the condition of the parts
of the car, such as the engine and the interior. They’re also looking for lower
mileage and of course rarity. These factors determine the
market price for a classic car. The global classic car collection industry is estimated
to be worth between $21 and $24 billion. The United States is the world’s largest market for
classic cars. It generated revenues of $863 million, more than four times as much as the
United Kingdom and continental Europe. Ferrari was the top performing car and
brought in revenues of $158 million, Porsche came in second with $55 million
and Aston Martin drew in $40 million. But Dudding’s wealth hasn’t grown
from investing in classic cars. In fact, if you want to make a quick buck, you might
want to think twice about investing in these assets. The classic car market hit a stumbling block in 2018,
when it saw a 1% decline in value over the past year. Experts attribute this decline to the number
of speculative investors leaving the market. Changing demographics have
also contributed to the decline. Baby boomers, who have more spending power, are leaving the market because of global uncertainties and age,
which means they can no longer drive. Despite this, many car enthusiasts like Rodger
are still excited about collecting cars. It’s not just about the money for them.
Sometimes it’s the story behind the cars. It’s for this reason Rodger bought the late
Princess Diana’s 1994 Audi Cabriolet and Dodi Fayed’s Aston Martin Lagonda
Wedge for undisclosed amounts. He also splashed more than $82,000 on a bespoke
Rolls Royce Wraith made in honor of George Martin. It very much is for the love of cars
and also the heritage of that car. This brings this piece of
metal back to life. Thank you so much for
watching my video! Comment below and tell me what you’ve learnt
about classic cars. And don’t forget to subscribe.

About the Author: Michael Flood


  1. Why classic cars are so popular?
    Simple answer is that Most rich people are old and they grew up with these cars. They associate these cars with their good old times plus Antique things generally Appreciate over time.

  2. Good video. Keep up the good work, Timothyna. The London Classic Car Show will be at Excel in Feb 2020. Your viewers may want to visit there if they like classic cars.

  3. Those so called classic cars are nothing but death traps!
    As pretty as they are, I never want to be caught in a headlong collision in any of them!

  4. Santa, if you’re listening, and I have been good all year, wanted in my garage and listed in no particular order:
    2002 RR Silver Seraph
    1995 RR Corniche IV
    1971 Mercedes-Benz 280SE 3.5 Cabriolet
    1967 Ford Country Squire Wagon. White exterior. Fake wood side panels. (My mom drove this car when I was a kid leaving behind lots of great memories.)
    Thanking you in advance.

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