A Few Thoughts & Observations

As 2020 is thankfully coming to a close, I thought I would share a few thoughts and observations on a number of things in the auto universe.  I didn’t think any of these had enough depth for a full blog in their own right but thought they were still worthy of sharing.  What 2021 will bring is anyone’s guess but at least today there is hope for a better future.

Bring A Trailer & What’s Hot

Bring A Trailer (BAT) is the last thing I needed to have added to my life.  It’s an addictive habit that costs me somewhere between 5-10 minutes every day going through the daily email they send out with the auctions closing and new one’s opening.  What I have found particularly interesting about the site is the way in which certain models seem to become the hot, in thing to have, with prices rising accordingly.  As an example, the Honda/Acura NSX has become one of the hot cars of the 2020 after years in the used car wilderness.  In just the last 3 months, BAT has auctioned off 32 NSXs.  A year ago, you might have seen 1-2 NSXs come up for sale in a month, now its several a week.  Two questions come to mind, if the NSX is really that great a car, why are so many longer-term owners now selling? What happens to NSX values when the herd moves onto the next suddenly hot classic sportscar?  The Alfa Romeo Spider S4 is another example of an early 90s sportscar that suddenly gotten hot with prices jumping and multiple examples being dug out of garages and put up for sale.  The Ferrari F355 and Porsche 911 (993) are two more I would add to the BAT currently “in vogue” list.

 

Aston Martin – And the Head Scratching Continues

Normally when you take over a struggling organization teetering towards its 8th bankruptcy the first thing you focus on is getting the core business right.  Based on the most recent news I’ve seen from Aston Martin, you could be led to believe the core business is residential real estate Aston Martin Residences Miami & Aston Martin Residences New York, followed by fashion with Heritage Collection, and special editions DBX Bowmore Distillery.  The DBX SUV is supposed to be the car that saves Aston Martin and the business plan calls for sales of 4,000 per year.  In Q3 2020, Aston Martin sold 345 DBXs which given there are 160 global dealers, is just slightly over 2 per dealer, one of which would be the dealer’s demonstrator.  Based on Aston’s recent moves, it appears the main sales strategy critical to the survival of the DBX is bundling them with apartments and distillery tours.  Aston Martin’s current Executive Chairman, Lawrence Stroll recently declared to the Financial Times that “demand right now is phenomenal,” without providing any facts to back up the claim.  This statement came 10 days before Aston Martin executed a 1 for 20 reverse stock split to reconsolidate shares after a series of massive dilutions this year.  If you bought 1,000 shares at Aston Martin’s IPO in October 2018 it would have cost you £19,000.  As of Friday’s market close, you would now have 50 shares worth £827.  The most phenomenal thing about Aston in recent history is value destruction and lack of focus.  In another recent move (the non-works as there actually isn’t any cross ownership), new works F1 team fired the driver who finished 4th in the 2020 F1 standings, kept the driver who finished 11th, and hired the one who finished 13th.  Just to make things even more head scratching, the fired driver brought considerable sponsorship funding to the team while his replacement will cost the team €15 million a year.  The fired driver just signed with Red Bull, who finished #2 in the 2020 Constructers Championship, ahead of Aston Martin/Racing Point.

Micro Manufacturers, their Supercars, & Who Will Make it

Back in late 2019, I wrote an article on Hypercars & Market Saturation and followed it up with one on the Micro Manufacturers where I tried to evaluate who would make it and who would not.  To say the least, 2020 has been a challenging year for all.  The Micro Manufacturers I took a look at back in 2019 included Apollo & De Tomaso, ATS, Scuderia Cameron Glickenhaus (SCG), Brabham, and Gordon Murray Automotive.  The last three on the list are all alive and well with quite a bit of activity this year.  Gordon Murray’s T.50 sold out shortly after the public unveiling, the Glickenhaus SCG 004C made its debut at the 24hrs Nürburgring, and the road cars are sold out until late 2021. Brabham Automotive delivered is first customer competition BT62 and launched a road legal version, the BT62R.  On the first three, the future is a bit murkier.  It looks like Apollo has finished production of the ten planned examples of the IE but what comes next is a major question mark as Apollo’s parent company has changed hands again.  What the market is for $3 million and up “garage candy” coming out of Covid-19 ravaged economies is also a great unknown. Apollo’s sister company, De Tomaso, has made little to no noise in 2020 other than issuing a rather arrogant statement that they were moving their operations to the US as “the time has come to restore the romance, beauty, passion and elegance in the luxury American automotive industry.”  Considering the De Tomaso P72 will be using a Ford supplied engine, this is quite the statement.  I’m surprised Ford hasn’t told them to go pound sand as I’m sure the loss of sale of 72 engines isn’t going to have much of an impact on Ford’s financial results.  On ATS, other than a few pictures of a track day they did with Esteban Ocon’s girlfriend back in October, signs of life have been very thin on the ground.  The other one that’s a major question mark is Pininfaria and the Battista.  Pininfarina Engineering is now being liquidated by the parent company and the impact this will have on Pininfaria Automobili is unknown.  Also, with Rimac, which is providing the drivetrain, likely to be buying Bugatti, how interested Rimac is in continuing to work with Pininfarina is an open question.  Perhaps the best outcome for the Battista project is for it now to become a joint undertaking with Bugatti and be launched wearing the Bugatti badge.  The winner in the interesting timing category has to be the latest iteration of the French manufacturer Delage.  After 70 years of being comatose, the new owners decided August 2020 was a good time to resurrect the brand an announce a new $2.4 million V12 hypercar.  I wish them luck.

Of the five larger, more established, purveyors of hypercars, only Koenigsegg announced a new model, the 4 seat Gemera, in 2020.  This happened in March, just as Covid-19 was exploding across the world.  The next model to be unveiled in the Ferrari Icona line will have to wait until at least 2021.  Both McLaren and Porsche’s next hypercars are likely years away and Pagani seems happy to continue developing special editions of the Huayra for the foreseeable future.

The Ford GT (2017-)

This is a car I am still trying to figure out. So far Ford has produced around 850 GTs with a further 500 planned.  There is a two year lock out period on owners, so GTs have only been showing up regularly for sale since mid 2019.  Looking at the Ford GTs that have come up for auction in 2019 & 2020 (HammerPrice is a great resource), 14 GTs have come up for auction, the highest mileage Ford GT had 2,832 miles on the odometer (it was a no sale) and the lowest mileage Ford GT had 15 miles with another at 30 miles. Of the 14 GTs, seven had been driven less than 500 miles.  This leads to the question of why aren’t they being driven, especially given Ford’s stated goal of only selling to owners who would drive their cars?  Per Steve Sutcliffe’s review for EVO Magazine: “Bottom line; the Ford GT is an epic car to drive – on a track – because fundamentally it’s a racing car at heart. No question about that. But on the road, it’s only so-so.” It would seem that the GT is just not that great of a car to drive on the road and with a tiny gas tank, you are lucky to get 200 miles in between petrol stops.  It would seem that the racetrack would be where you would find Ford GTs regularly.  However, talking to friends who are track rats, a Ford GT is a rare sighting.  I was also a bit shocked when I looked at the Ford GTs basic performance stats that a 2015 McLaren 675LT would leave it in its rear-view mirror.  The last two Ford GTs sold at auction cost the new owners about $850k.  For about the same price you could add a McLaren Senna, or mint Porsche Carrera GT, and for just a bit more a Porsche 918 and a McLaren P1 to your garage.  If I had to rank those five in terms of preference, I don’t think Ford would be too impressed with where the GTs would land.  That having been said, it’s a car I would love to drive and the “race car at heart” is a concept I certainly find very appealing.  With production continuing for several more years, I doubt the premium will hold long term.  When you see the Ford GT’s designer, plus rumors of members of the Ford family parting with their GTs, I think the message is clear.  

Defining the Last & Best

With each major advancement in supercar technology, and in this case, I am thinking of the transition from non-traction control/non-abs to electronic drivers aids, steel/aluminum chassis to carbon fiber, manual gearboxes to F1 type single clutch to then dual clutch, naturally aspirated to turbo to hybrid, there is always a debate on which cars are the best of the last generation.  It’s a very subjective debate with no right answers but plenty of opinions.  As we are at another inflection point with the rise of the hybrids, I’ve taken another look at what cars would make my list.  They are the Ferrari F40 (steel chassis), Ferrari F50 (manual gearbox & ICE), McLaren F1 (non-abs & ICE), Ferrari 430 Scuderia (F1 single clutch gearbox), and finally the McLaren 675LT (turbo).

Thoughts and comments? Please see the comments section below.

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December 2020

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6 Thoughts on A Few Thoughts & Observations
    Christian Lorenzen
    21 Dec 2020
    10:49pm

    Finally some straight talking. I have been bearish on the whole supercar development for some time as it has developed into a higher/faster/more expensive game rather than focussing on providing a proper driving experience. It is ending in tears because the market has moved on. Dinosaurs in the making. And Aston Martin – what is going on ? Lance Stroll and JC Bamford have too much money to burn – all at the expense of the minority shareholder who was sold a castle build on sand.

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    James
    22 Dec 2020
    2:24pm

    As always it is a good read. Too many cars with too much power asking too much money. Friends have some incredible collection of cars and they are just not interested in these latest cars, as one said when would you ever use them? Too much power for the road and if you are going on track then get a track focused car….Caterham, BAC, McLaren 620R etc.

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    John
    26 Dec 2020
    12:20pm

    Tobias Moers had one job to do to save Aston Martin – Sack Marek Reichman.

    Yet, they’re planning 10 more derivatives of Marek’s disasters in the next two years. Ten more chances for customers to say “no thanks” to a Reichman design.

    That horse is dead.

    Then we have Stroll claiming that Aston will have unique engines from AMG, but they’ll be using all the same parts. Erm???

    That it is becoming increasingly clear that Stroll is an image man, not products. That he wants to sell Aston on Reichman’s images and not his products. They seem to believe the name, the brand, alone is enough in a highly technical product driven sector. I’m glad that it’s him, and especially Bamford, who will end up losing money on Aston.

    Aston has found a new Dany Bahar in Tobias Moers and Stroll just wants to sell the image. Who will save Aston?

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    Gary Milgrom
    24 Dec 2020
    1:25pm

    Bring a Trailer has become more popular every year and has more listings of all cars in 2020 than in previous years. While NA2 cars (later 3.2 liter engine and 6-speed) have appreciated significantly in 2020, the greatest appreciation of NA1 (original model with flip up lights) cars was in 2018 and 2019 and are actually flat for appreciation and number of sales in 2020.

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    John
    26 Dec 2020
    12:34pm

    Years ago, back when they were still making the original NSX, I recognised this was an amazing little car that was almost affordable for someone who’d just graduated and starting a new job. If you found the right used one. Honda, so you knew it would be reliable, and aluminium so you knew it wouldn’t be a rusty heap of junk.

    Off I went looking.

    The local garage was kind enough to let me try their demonstrator. Golden tan metallic which in the metal looks awesome. It was, terrific, but I have to state that I have the utmost respect for someone else’s car when driving so wasn’t harsh with. Just up to speed on a bypass and back.

    But the biggest problem I had was fitting in. I simply am too tall for an NSX. I can’t reach all the controls because I’ve got the seat well back, and I can’t lean forward because my head jams in the roof. Alas, that was it for my early sports car dreams…

    Checking today and Autotrader in the UK has three for sale. One at a ridiculously high price, two more reasonable, but still twice what they were going for way back then. Hopefully the new found interest in this car will keep the few remaining alive!

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    Robert Saldana
    12 Jan 2021
    3:15pm

    I really enjoy the perspective of the actual buyers of the cars that serve as computer backgrounds of today and posters I had as a child in the 90s. Also, I like your perspective on the businesses behind the cars, especially Aston Martin. The decision to let a driver who brings talent and money to a team and brings more out of the car than most other drivers can was simply astonishing. Have you ever posted about your background that can lend an idea of how you are able to analyze the business of the supercar/hypercar industry?

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