Book Review: McLaren The Road Cars 2010-2024 by Kyle Fortune

Book Review: McLaren The Road Cars 2010-2024 by Kyle Fortune

If Oxford or Cambridge University ever decide to offer a history course on the McLaren Automotive Road Cars, Kyle Fortune has just written the first book that would be required reading for this class.  The book very much reads like a biography of the cars, written by an individual who was present throughout the development journey.  In 15 short years, McLaren has produced a portfolio of supercars that have set new benchmarks for the industry.  It’s clear that Kyle had unprecedented access inside McLaren and to the teams developing these extraordinary supercars.  The multiple quotes from Chief Test Driver, Chris Goodwin, are hugely insightful.  Kyle nicely balances a wealth of technical details, with in-period quotes from some of the leading international Auto Journalists.  These quotes add both color and context to the impact these cars had at their launch.  Kyle does a nice job of avoiding the politics that always accompany cars of this nature and sticks to the facts.

Personally, I found the book fascinating.  As a fellow traveler on the McLaren Automotive journey, albeit from a customer’s standpoint, the amount of new information that Kyle provides is quite impressive.  His insights on the multiple “specials” that McLaren has produced over the last decade is extraordinary.  I have to admit, a few of these MSO special projects, like the MSO Carbon Series LT & MSO R, I had not heard of before.  The book is well laid out, easy to read, and beautifully illustrated with multiple great pictures, many of which will never have been publicly seen before.

 

McLaren The Road Cars 2010-2024 is a highly recommended read for any McLaren owner and enthusiast.

 

McLaren : The Road Cars, 2010–2024

By Kyle Fortune and Foreword by Jay Leno

9780764367311 published by Schiffer Publishing

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February 2024

 

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Ferrari’s 2023 Results: The Horse Takes A Victory Lap

Ferrari’s 2023 Results: The Horse Takes A Victory Lap

On February 1, 2024, Ferrari released their 2023 full year results.  Over the first three quarters of 2023, Ferrari delivered stellar performance and Q4 2023 was no exception. 

Back in November after the Q3 2023 results were released I wrote:

2023 Targets

Ferrari continues to execute its long term strategy brilliantly and its hefty $61 billion market cap reflects this.  Italy hasn’t seen a cash machine quite like this since the heydays of the Banco dei Medici. Ferrari’s strong balance sheet allows it to continue to reward its shareholders handsomely and retire debt ahead of schedule.   Vigna must lead Ferrari seamlessly through the evolution to a three powertrain platform business while managing an increasing broad and complex portfolio of models.  Getting the F1 Team back to the very front of the grid doesn’t seem likely to happen anytime soon but the reality is, the F1 team performance has no impact on car sales. In 2022, Ferrari beat their guidance on every single financial metric for the 2nd year in a row.  It looks like they will do the same in 2023.  Ferrari continues to come up with new and creative ways of increasing revenue while driving margin and does so in a manner that is true to its ultra-luxury positioning. 

 In the recent FY 2023 earnings call, Ferrari management basically took a well deserved victory lap.  In the earnings release Ferrari referred to the financial results as being “unprecedented”.  This wasn’t bragging, it was simply a statement of fact.  With revenues up 17% and net profit up 34% to over €1 billion for the first time in Ferrari’s history, 2023 was truly an outstanding year.  What makes this especially interesting is if you go back to the beginning of 2023 year, Ferrari was downplaying expectations, especially for the back half of 2023.  Ferrari has turned under promise and over deliver into an art form.  It’s the net outcome of having a clear long term strategy and then executing flawlessly and consistently against it.  The stock price is now sitting at an all-time high and the current market cap is now $70.7 billion, up $10 billion just since the Q3 2023 report.

Benedetto Vigna, the current CEO, has been in place for over 2 years now and it shows.  On the earnings call Vigna now comes across as confident and completely in command.   He is a bit more loquacious now but still reveals very little that deviates from the prepared script.  The CFO, Antonio Picca Piccon, was also on the call and did his usual nice job of concisely handling the questions tossed his way.  Vigna & Piccon appear to have a strong, cohesive, relationship.

Highlights from 2023 and the strategies that help deliver these outstanding results:

  • 2023 Key Results: The key numbers for Ferrari in 2023 were 13,663 cars sold, (up 3% vs 2022), Net Revenues of €5,970 million (+17%), and EBITDA of €2,279 million (+29%). Free Cash Flow was €848 million, up €251million (+42%).    Mix and pricing contributed €461 million.  Ferrari returned €800 million to its shareholders via both dividends and the share repurchase program in 2023. 

Probably the most impressive number here is the value (revenue) growth which is nearly 6 times the volume growth, hammering home Ferrari’s credentials as a true luxury brand.  A key contributor to the revenue growth was the increase in personalizations.  These accounted for 19% of total car and parts revenue in 2023, driven by paint, liveries and the use of carbon.  Ferrari’s ability to continue finding ways of extracting ever increasing sums of money from its customers is truly impressive. 

  • Product Mix & Profitability: Ferrari’s 2023 profits were €1,257 million up 34% vs. 2022. Mix & price was a positive €461 million driven by model mix and increased personalization.  Historically it’s been the big V12 GTs that have driven Ferrari’s profitability, this has now been taken over by the hybrids.  In fact, Ferrari no longer breaks out the split between V8s & V12s.  Reporting now is done on a ICE (internal combustion engine) and hybrid basis only.  In 2023, the split between ICE & hybrid was 56% & 44% respectively.  In 2023, the increase in shipments was driven by the Purosangue, 296, and the SF90.  The 812 Competizione, and Daytona SP3 help drive the mix increases.  When the first EV is delivered in late 2025, I would expect that will give margins a further boost. 

In his opening comments on the earnings call, Piccon mentioned that geographical mix was also a key driver of profitability.  EMEA (Europe Middle East & Africa) at 44% and the Americas at 28% were up versus prior year, representing more than 72% of our total shipments. Rest of APAC was flat at 17% and Mainland China, Hong Kong and Taiwan declined to 11%.  Piccon indicated that the Greater China number were in line with the long term targets for this area as it is margin dilutive.

Ferrari’s ability to flex allocations based on both currency movements and demand is highly impressive.  In 2023, it’s been the Americas that have benefited from the largest increase in allocations, but all regions ex China were up in 2023.  It’s also worth noting that the Americas Region currently only receives 2/3rd the shipments that EMEA does. Given the size of just the US market, shows that Ferrari has a huge amount of untapped volume growth potential that it can access as needed.  It’s also a testament to Ferrari’s discipline when it comes to ensuring that demand remains well ahead of supply.

In terms of Ferrari’s never ending new and creative ways of generating incremental revenue, in 2023 they launched the Sport Prototipi Clienti Program initially to support owners of the 499P Modificata, the Ferrari Cavalcade Classiche legacy tours and in very early January, Ferrari announced they were entering the world of competitive sailing.  I believe this is the first step towards a broader push into the world of boating.  Many of Ferraris current customers are also boat owners so it makes sense to try to capture revenue in this area.  Also, Ferrari’s engine supply agreement with Maserati has just come to an end.  In 2023 Ferrari sold €127 million worth of engines to Maserati.   Redirecting this now spare engine capacity into a marine applications does seem like a convenient solution.  The luxury powerboat market has a global market value of around €9 billion and is project to double in the next 10 years.  Getting a slice of that could help fuel revenue growth for years to come.

  • CAPEX, & Debt: Ferrari has very ambitious plans and is generating the cash needed to bring them to life as demonstrated by the €869 million in 2023 CAPEX spending, up 8% vs. 2022. In the earnings release, a quote from Vigna indicated that future projects were on track which is critical as Ferrari has committed to launching 15 new models by 2026.  As per auto industry norms, Ferrari capitalizes around 50% of its CAPEX spending, with the balance hitting the P&L in the current year.  Ferrari’s debt load continues to be relatively modest and easily manageable given current Free Cash Flow.  Total debt is down slightly to €2.48 billion, and cash and equivalents decreased slightly to €1.12 billion (after paying out €795 million to its shareholders in 2023) with total liquidity of an impressive €1.7 billion.  Ferrari does have €675 million of debt coming due in 2024 but has enough cash on hand today to retire all that debt plus a large portion of the €907 million that will mature in 2025.   

 

  • Portfolio: Ferrari’s current portfolio is by far the most complex in its history with five new models (3 road, 2 track) launched in 2023. The strategy that has delivered the current portfolio was first articulated back in Q3 2018.  It was then that Ferrari changed the way it segmented its portfolio from V8s & V12s to Sport Range, Gran Turismo Range, Special Series, Icona, Track, and Hypercar.  This change in thinking gave Ferrari the license to build out its portfolio in a way it never had been able to in the past.  With the Icona, Ferrari has brilliantly created an avenue to leverage the nostalgia around its back catalog while spinning out an ongoing series of high margin multi-million dollar limited edition specials utilizing existing platforms (the SP3 Daytona is basically a La Ferrari minus the hybrid system). 

 

In terms of the order book, on the earnings call Vigna stated that the order book now stretches to the end of 2025 and on a few models even beyond.  Vigna was asked on the earnings call if he was seeing any impact from the poor current economic performance in key markets and the reply was that Ferrari’s client base did not seem to be impacted.  Vigna also stated that residual values have remained strong.  With a full order book helping to support residuals, Ferrari clearly sees the pre-owned market as another opportunity to drive additional revenue and programs such as the Ferrari Cavalcade Classiche tours are just another way to unlock that value.

 

  • Electric Cars: Ferrari remains committed to launching its 1st EV in Q4 2025. First shipments are likely towards the end of 2026.  Vigna indicated in Q3 2023 that he has driven a prototype of the EV but refused to say more.  Post 2025, Ferrari seems very committed to offering three drive train options, ICE, hybrid, and EV with hybrid likely being the majority of the volume given that its already very close to half. 

 

  • Racing: The main focus on the earnings call this time was on the win at the 24 hours of Le Mans. It is clearly a major point of pride at Ferrari and one they are looking to leverage across both the road and track car sides of the business.  The F1 season was mentioned briefly and best referred to as “difficult”.  However, the recent signing of Lewis Hamilton to drive for Scuderia Ferrari starting in 2025 did create renewed enthusiasm for the teams’ prospects in the future.

2024 Targets

Ferrari has become one of the world’s premier companies when it comes to “sandbagging”. The 2024 Targets feel very much like another round under promise and over deliver.  On the earnings call it was interesting to hear Ferrari management try to downplay expectations for 2024 while at the same time exuding long term confidence.  Overall, I believe this comment by Vigna best sums up Ferrari’s current situation:  “The record result of 2023, the exceptional visibility on our order book, and the extraordinary performance of our business allow us to look at the high end of the 2026 target with stronger confidence.” 

 

 

Summary

Ferrari continues to execute its long term strategy brilliantly and its hefty $71 billion market cap reflects this.  In the 8 years since Ferrari’s IPO, it has become the crown jewel in John Elkann’s empire with a market value on par with Stellantis despite selling only 0.002% the number of cars. Ferrari’s strong balance sheet allows it to continue to reward its shareholders handsomely and retire debt ahead of schedule.   Launching an EV that is true to Ferrari’s core values is the next major challenge facing Vigna.  He needs to do this flawlessly while managing an increasing broad and complex portfolio of models.  The F1 Team remains a sore point but the recent signing of Lewis Hamilton for the 2025 season has created renewed excitement while likely moderating expectations for the 2024 season.  The reality is, the F1 team performance has no impact on car sales. In 2023, Ferrari beat their guidance on every single financial metric for the 3rd year in a row.  It looks like they will do the same in 2024.  Ferrari continues to come up with new and creative ways of increasing revenue while driving margin and does so in a manner that is true to its ultra-luxury positioning. 

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February 2024

 

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Update: Aston Martin: Time for a New CEO ?

Update: Aston Martin: Time for a New CEO ?

On Feb 6th, Bloomberg published the following: Aston Martin is Hunting for its Fourth CEO in Four Years .  The Bloomberg article confirms what I was hearing in early January, which is captured in the article below.  For Bloomberg to have published the article, they would have confirmed it with multiple different sources.  Since I posted the original piece, I have heard that several candidates have been approached.  Given the history, the job is a tough sell to say the least, about on par with being named Chief Minister by Henry VIII.   While the title might be CEO, any qualified candidate has to realize that there is zero chance Stroll will actually let them operate as a CEO.  Given that the current CEO, Amadeo Felisa, has only been in the role of a bit over a year and a half, he has hardly been given the time (and very likely not the autonomy) to turnaround the business.  The last time Aston Martin (AML) had any stability in the C-Suite, Andy Palmer was the CEO. 

The timing on this development is also quite interesting as Aston Martin will be reporting their full year 2023 results in 3 weeks.  The delays on the DB12 and the management turmoil in Aston Martin’s largest region, the Americas, where AML is also on their 4th leader in 4 years, does not bode well for 2023’s final numbers.  At a minimum I expect there will have been another rather large “temporary suspension of the demand-led operating model” in Q4 2023. One of the largest Aston Martin dealers in the US has a notice on their website stating: “we have a much larger inventory on site and in transit” vs. the 18 new Astons they have listed on the website.  The fact that what was a confidential CEO search has become quite public now would seem to indicate that Stroll is planning to toss the current CEO under the bus for what are likely to be disappointing results.  How this impacts the latest “fulsome refinancing exercise” AML is about to kick off will also be interesting.

Things are certainly never dull in Gaydon.

I wasn’t planning on writing another article on Aston Martin Lagonda (AML) until they released their full 2023 results in February.  However, according to a couple of well informed contacts, it is rumored that Lawrence Stroll might just be looking for a new CEO for Aston Martin Lagonda…….again.  As Stroll’s index finger only points outwards, I guess this should not be a major surprise after all the issues with the DB12 start up and having to call down the 2023 Guidance back in November of last year.

 

Last time we went around on this merry go round was in early 2022.  It started out in early January with an Autocar article on the then Aston Martin CEO, Tobias Moers’ future at Aston Martin being in doubt.  At the time Stroll denied he was looking to replace Moers in a statement to the Financial Times Aston Martin chair denies he is looking for a new chief executive.  Stroll’s denial back then rang pretty hallow when shortly after the FT article came out,  Bloomberg Aston Martin Approaches Ford Executive identified the individual Stroll had approached about replacing Moers and indicated several discussions had already taken place.  Certainly, in this case, where there was smoke, there was fire, and by early May 2022, Moers was out and former Ferrari CEO, Amedeo Felisa, had replaced him. 

Looking back, the current rumored situation certainly is par for the course for Stroll since he took over as Executive Chairman at AML.  Poor Tobias Moers was left twisting in the wind for months and his first CEO, Andy Palmer, found out he had been fired when a reporter from the Financial Times called him up and ask for a comment. 

 

AML is really in no better shape today than it was when Felisa took over 2 years ago.  Looking at a few key numbers through the last available reporting period vs. same period 2 years ago:

 

 

 

Q1-Q3 2021

Q1-Q3 2023

Cars Wholesale

4,250

4,398

Revenue

£ 736 mil.

£1,040 mil.

EBITDA

£72 mil.

£131 mil.

Loss before Tax

-£198 mil.

-£260 mil.

Free Cash Flow

-£39 mil.

-£297 mil.

Net Debt

£808 mil.

£750 mil.

Cash on Hand

£495 mil.

£544 mil.

 

AML is selling a few more cars at a higher ASP (average selling price) than they were a couple of years back and losing a lot more money doing so.  The rise in revenue & ASP has more to do with the Valkyrie than anything else, and for this AML should thank the long-departed Andy Palmer.  Net debt is down slightly and cash on hand is up a bit which does look good on paper.  However, this doesn’t take into account the £964 mil. of capital that been raised in the last 2 years that’s almost all gone. However, to be fair to Felisa, blaming him for AMLs current issues is akin to blaming Lieutenant-General Arthur Percival for the fall of Singapore. While Felisa might be the CEO, he does report to an Executive Chairman, making him more of a COO than a CEO.

Potential Successors

Last time Stroll went down this path, he had a ready-made solution sitting right in his Boardroom in Amedeo Felisa.  Felisa had been the CEO of Ferrari from 2008-2016 so he was a highly credible option who already was involved with Aston Martin.  Today no such option exists on AML’s Board of Directors.  The last person who could have been considered, Antony Sheriff (former Managing Director of McLaren Automotive), left the Aston Martin BoD last April to become Chairman of the Supervisory Board at Rimac Group and at Bugatti-Rimac.  Stroll therefore has been forced to look outside the AML organization.  At this point, it’s a very tough role to fill, given both the history and what the future may hold (see: The Grinch). 

 

Stroll’s pool of CEO candidates fall into what I believe are three groups.  The first group is former Automotive CEOs/MDs looking for a new job (example: recent SSO Award Winner Thierry Bollore). The first group is less appealing to Stroll as all would come with baggage but would certainly be less expensive to hire than either of the other two groups.  The second group is recently retired Senior Executives who might just be interested in one last payday (example: recently retired Rolls Royce CEO Torsten Müller-Ötvös). This second group, from which Felisa came from, is an easier sell as one last big payday and a nice severance after a couple of years could be appealing.  The third and final group is current top talent at major automotive companies just below the CEO level.  That last group, of which Moers could be considered to have been a member of when he was hired, is going to be a very hard sell for Stroll given both AML’s history of revolving CEOs and its current financial situation.  These types of executives tend to plan a long game and are looking for both stability and a high chance of success.  To put it in F1 driver terms, Romain Grosjean would be in the first group, Fernando Alonso in the second, and Lando Norris in the third.

Implications

While I don’t think anyone at Aston Martin shed a tear as the door was closing behind Moers, if Felisa is out after about two years, it has potentially serious leadership implications for key areas of Aston Martin’s operations. While not many senior executives followed Moers from Mercedes AMG to Aston Martin, Felisa has surrounded himself with former Ferrari colleagues.  In fact, Aston Martin now has former Ferrari executives controlling all the key operating positions including sales, marketing, technology, procurement, and manufacturing.   At a glance, the Aston Martin executive organization chart today (AML Leadership Team) looks like it is more likely to belong to a Modena area organization than one based in Gaydon.  If all these former Ferrari executives followed Felisa out the door, it could have serious implications on Aston Martin’s operations.  At a very minimum, it’s going to cost Stroll quite a bit to get them to stay as a large amount of management turmoil is the last thing Stroll needs as AML embarks on the 1st half 2024 “fulsome refinancing exercise”.

Summary

When I first heard that Stroll might be back in the market for a CEO again, I wasn’t the least bit surprised.  However, sacking Felisa now does seem like a high risk move given the impending “fulsome refinancing exercise” they are about to kick off.  My guess is it gets pushed to the 2nd half of the year after the fresh cash is in the bank.  However, this doesn’t prevent Stroll from having a successor already lined up and available to start as soon as it’s convenient.  I doubt Felisa will be sad to go, the last two years can not have been much fun.  The only question is does his team then follow him out the door.

Note: I do not, and have never, owned any AML shares.

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January 2024

 

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Supercar Market Insights & Analysis – Feb 2024

Supercar Market Insights & Analysis – Feb 2024

Since the last Supercar Market update in Nov 2023, the world is no saner.  There are two wars raging with the surrounding areas continuing to look highly volatile.   A clear plan to resolve either situation remains highly elusive.  In the “who would have ever thought” category, Taylor Swift is now the face of the NFL and Lewis Hamilton will be driving for Ferrari in 2025.  I doubt Hamilton’s stay in Maranello will be any more rewarding than it was for either Vettel or Alonso.  It will be interesting to see if Hamilton continues to follow in Vettel and Alonso’s footsteps and after a couple of frustrating years at Ferrari, he eventually ends up closing out his career at Aston Martin. 

The Macro Situation

Money is now very expensive and is very likely to remain so for at least the next several months.  Mortgage rates in the US are down very slightly but still at their highest levels this century.  Credit card balances in the US have now increased 8 quarters in a row and grew by $154 bil. in the last 12 months.  Auto loan delinquencies are now well above pre-COVID levels and expected to peak in 2024 at around 10%.  On a more positive note, according to the IMF, US GDP is expected to grow by 2.1% in 2024 after delivering a higher than expected 2.5% in 2023. These are both still above the FEDs targeted non-inflationary growth rate of 1.8% so interest rate cuts don’t seem imminent.  The same GDP growth rate numbers for the UK are 0.5% in 2023 and the same expected for 2024.  As a reference, EU GDP grew 0.5% in 2023 and is expected to increase to 1.3% in 2024.  The UK Bank (Interest) Rate is currently 5.25% and is unlikely to decline until late this year. This combination of higher UK interest rates and lower growth is creating a pricing gap between the US & UK supercar markets on certain models.

In the political sphere, in the US in a recent poll 67% of the population would prefer a different set of candidates vs. the two (Biden & Trump) currently likely to be their party’s nominee.  Both Biden and Trump are older than the last three (Obama, Bush, & Clinton) former Presidents.  Mandatory retirement age for commercial airline pilots is 65.  Both candidates are more than a decade over this.  If you are deemed to be too old to fly a commercial jet, should you really be allowed to have your finger on the nuclear button?   Even more bizarrely, while Trump would appear to have the Republican Party nomination almost all sewed up, it’s Nikki Haley, who is well behind Trump in the Republican primaries, who polls significantly better in a head to head race vs. Biden.  Net net, the Republicans are mostly likely to nominate the weaker candidate for the US Presidential election.  Should Trump win, he has promised to be a dictator, but “only on day 1”.  The UK will also have a general election this year.  Based on current poll’s the current Prime Minister, Rishi Sunak, has only a slightly better chance of keeping his job than Prince Andrew has of being reinstated as a working royal. 

Inflation in the US has cooled with December 2023 coming in at 3.3%, still well above the Federal Reserve’s 2% target.  The stock market recovered nicely in 2023, wiping out 2022’s rather horrific losses.  After hitting parity to the $ back in late 2022, the € has stabilized and now sits at €1 = $1.08 and has been quite stable in a $1.06 – $1.12 range for the last year.  The British £ seems to be locked into a $1.20-$1.30 trading range long term now and currently sits at $1.26 = £1.  The £ is still well off its pre-Brexit levels and I can’t see getting anywhere near the more normal historic $1.60-$1.70 range without a major structural change.  I have a few UK based friends that are predicting that the UK will eventually return to the EU. That is likely what’s needed for the £ to significantly appreciate.  After an extended mud throwing session, the US and China have finally cooled down the rhetoric.  It’s now been a few months since I have seen any articles on a potential invasion of Taiwan.  Putin’s mad foray into the Ukraine is looking more and more like it will drag on for years.  The harsh reality is this is probably in NATO’s best interest as having the Russian army tied up and being ground down in Ukraine keeps it from creating trouble elsewhere. 

Instead of going through a methodical analysis of different parts of the Supercar market, as there are plenty of better informed people who already do that, I thought it might be more interesting to layout a few things that have caught my attention.

The Modern Era (2010 ->)

The Hypercar Trinity

Prices on the 2013/2014 Hypercar Trinity, which include the oddly named Ferrari LaFerrari, the McLaren P1, and the Porsche 918 have been very stable through 2022 with not a lot of cars changing hands, at least publicly.  LaFerraris now sit squarely in the $2-$4 mil. range depending on spec and mileage with the higher number being achieved by LaFerraris that have sadly never felt a leaf, rock, or pothole under their tires. The last two to hit the auction block were both low mileage car, neither car hit the low estimate, and both were no sales.  The number of LaFerraris coming into the market in the last 12 months has dropped off rather substantially.  Rumors that one of the requirements for obtaining a build slot for the successor might be current ownership of a LaFerrari would certainly put a damper on the market.  Both McLaren P1s and Porsche 918s moved up from early Covid lows of $800k-900k.  918s now sit in the $1.4-$1.46 mil. range which is up by about $200k from early 2023 but on par with 2022..  P1s are a bit of a different story.  Four P1s have been sold at auction in the last 3 months.  None hit the low estimate but were hammered sold.  Two of the cars went for right around $1 mil., 1 for $1.24 mil. and the final one hit $1.9 mil.  The difference between the 4 cars, location, and mileage.  The $1.9 mil. P1 was a US spec car and had under 3k miles on it.  The others were all EU spec and over 5k miles.  Where P1 prices go from here will be very interesting to watch but the market seems to be bifurcating dramatically between garage queen museum pieces and drivers with US spec cars demanding a slight premium which is unlikely to last.  I expect the next generation of Hypercars to be announced by at least one of the three manufacturers in 2024, with the others following in 2025.  What this does to the values on the last generation will be interesting to see but at least initially I doubt it will have a positive effect. The LaFerrari is a possible exception if Ferrari makes current LaFerrari ownership one of the critical criteria for getting an allocation of its next Hypercar.  All of these models are falling into the exploding maintenance costs category as their hybrid technology ages.  When annual service bills start approaching the cost of a nice used Ferrari 458, McLaren 650S, or 911 Turbo, it will have an impact.  These are also not cars you can just park in a warehouse and forget.  They need to be constantly on life support (i.e battery chargers) and do much better when used regularly than when they sit.  The irony is the ones that sit, are the ones most highly valued by the market. 

And a brief word on the McLaren Speedtail

Speedtails are an interesting case.  To start, its positioning is a bit of a convoluted mess, about on par with the French battle plan at Agincourt.  The Project BP23 (which became the Speedtail) started life conceptually as modern version of the F1.  Somehow along the way that got interpreted as meaning it had to have a higher top speed. I understand this was very much driven by the former CEO.   Lightness, agility, and usability all seemed to have gotten pushed aside in a myopic lust for a higher terminal velocity.  The net result was a highly complex hybrid, that’s 3 ft longer than the original, 1,000 lbs heavier, has 422 bhp more, but is only 7 mph faster in a straight line.  Given its far more compact size and weight, the earlier car would like murder the Speedtail around any track.  Like the original McLaren F1, only 106 were produced and longer term the low production numbers should help values, but this could take a decade or longer before it plays out.  In terms of values today, you are catching a falling knife.  In the last two years at auction, Speedtails have gone from a high sale of $3 mil. in Jan 2022 to the most recent sale of $1.83 mil. in Jan 2024. It’s been an almost straight line south between these two sales.  Putting additional pressure on values, of the 10 Speedtails that have come up for auction in the last 2 years, 5 were no sales and several of these cars appeared at multiple different auctions at ever decreasing high bids.   Unlike the P1 or Senna, the Speedtail is just not a car that creates any love or excitement in the collectors/enthusiast community right now. 

The Gen 2 Ford GT: Holding Steady…..just don’t drive it

Ford’s stated goal when they launched the Gen 2 Ford GT in 2015 was to sell only to owners who would drive their cars.  Today it’s nearly impossible to find a major auction where at least one Gen 2 Ford GT isn’t in the catalog.   Of the Ford GTs that have been hammered sold in the last year, over half had less than 50 miles on the odometer.  Clearly Ford did about as good of a job selecting Ford GT customers who would drive the cars as Liz Truss did on choosing a Chancellor of the Exchequer or John McCain did on choosing a running mate in 2008.  Almost all Gen 2 Ford GT’s have odometers indicating that new tires will not be needed any time in the near future, values have held very steady over the last several years and are still well over the original list price.  The two high sales in the last year were both at $1.25 mil. for cars with delivery miles and the low sales were around $800k for cars that had been ever so slightly used. This is about on par with 2022 results.  It’s one market that I really can’t make any sense of.  With 1,350 built, the Gen 2 Ford GT isn’t exact rare, and looking at the basic performance stats a rarer 2015 McLaren 675LT would leave it in its rear-view mirror. 

The Ferrari V12 GTs: Still Depreciation Champs?

I have been following the Ferrari F12 and 812 market fairly closely for over 2 years now.  Adding a Prancing Horse badged V12 GT to the garage has been high on my list for quite some time, but I am not in a rush and refuse to pay a premium for a car that has traditionally been the depreciation champion of the Ferrari line up.  The number of F12s on the market is consistent with 6 months ago but twice the number of 12 months ago.  Today there are 16 F12s on the US Ferrari preowned website ranging in price from $230k to $295k and 48 on Autotrader starting at $190k.  Prices on F12s look like they have dropped by at least $40k in the last year but have been stable for the last 3 months.  Longer term I would guess F12s will settle in the $180k-$250k range depending on spec and mileage.   Over the last 6 months, it’s the 812 that has dropped almost as fast as Ron DeSantis’ campaign for President.  For the 812, inventories are substantially higher today vs. a year ago with a hefty 38 812s on the US Ferrari preowned website ranging in price from $316k to $410k and 74 listed on Autotrader.  I expect we will see the first 812 listed on the US Ferrari preowned website below $300k shortly.  This should push the over ambitiously priced F12s down towards that long term $180k-$250k range.  Ten years down the road, I would not be surprised to see F12s trading at higher values than 812s.

Aston Martin Vanquish Gen 2 2012-2018: The V12 Bargain Buy?

The 2nd generation 2012-2018 Vanquish was basically an evolution of the DBS.  The Vanquish is built off the same platform with a few styling cues swiped off the One-77.  The Gen 2 Vanquish was only sold with an automatic gearbox.  Early models came with a 6 speed autobox with later (mid 2014-2018) switching to a much improved 8 speed ZF automatic.  A further update with increased horsepower and revised aerodynamics was delivered in 2017 with the cars now being badged Vanquish S.  Today you can find higher mileage coupes starting at $70k with Volante’s starting at $93k.  The later “S” models of both have dropped by $40k in the last 8 months to $160k.  The low end of the market has dropped by $20k in the last 8 months and post 2014 Volante’s are down by $30-40k.  The later model Vanquish and Vanquish S’ are still depreciating, and probably have another $50k to go before they flatten out.  With 46 listed for sale on Autotrader plus an additional 7 on the Aston Martin Preowned USA site right now, it is a buyer’s market with cars sitting for extended periods.  For example, there is one 2015 Vanquish Carbon Edition Volante that has been sitting at the official Aston Martin dealer on Long Island for close to a year now.  Its price has drifted south slowly but clearly not enough to move it off the showroom floor.  Eight months ago, there seemed to be a $20-30k spread between similar cars listed on independent dealerships vs. at official Aston Martin dealerships.  That spread has now basically disappeared which probably reflects the fact that cars are sitting on the market for extended periods.  Recent decreases in values points to a more stable market going forward.  At 60% of the cost of a compatible Ferrari F12, the Vanquish is an intriguing option.

The Classics (90’s & 00’s)

The Ferraris: A bit of a mixed bag.….

F50s have risen from just under $2 mil. in 2019 to topping out at $4.9 mil. in Dec 2022.  The march up has been very consistent until 2023.  Since then, the market has stalled with the last one going for a more modest $3.9 mil.  Ferrari Enzos on the other hand have been trading in the $2 – $3 mil. range depending on color and mileage for most of the last decade.  In 2023, on fairly thin data, it looks like they might have taken a bit of a step up to be more in the $3 – $4 mil. range with the last sale of a very low mileage Enzo crossing the $4 mil. line for the first time.  It’s clear that at least several owners think that is about the top of the market.  In 2023 you had 4 Enzos show up at auctions, and in 2024 there have already been 3.  Of the 3, two sold, one for $4 mil. and the other for $3.7 mil.  While the F50 has aged brilliantly and it is as engaging and rewarding to drive today as it was 25 years ago, the Enzo and its first generation F1 gearbox has aged about as well as the New York Jets decision to pick Zack Wilson in the 1st round of the 2021 NFL draft.

The 430 Scuderia is another Ferrari that has aged well with prices in the US rising from $180k in 2019 to almost twice that for a similar car today.  The final generation F1 gearbox in the 430 Scuderia is a joy to use and has aged well.  In fact, I would rate the 430 Scuderia as the best of all the 2000-2010 Ferrari models.  While prices of 430 Scuderia have jumped in the US, they have only risen slightly in the UK and the gap today between the two markets is quite significant. 

Probably the biggest head scratcher in recent history is the huge jump in values on the Ferrari F355 GTS in 2023 that seems to be finally cooling.  The F355 GTS went from $70k a couple of years ago to an insane high sale at $307k for a Euro F355 GTS 6 speed in June 2023.  The last two F355 GTS sales I could find were in the $130k-$150k range which at least is a partial return back towards sanity.   What is hard to understand though is why the GTS commands a $50-70 premium over F355 Spiders.  The F355 GTS was the first Ferrari I owned and of the three F355 variants (Berlinetta, GTS, Spider) I would have put it squarely at the bottom of the pile.  Leaky roof panels, vague steering, and with the reliability of a coked up supermodel, it just doesn’t have that much charm. 

Porsche Carrera GT: Poster Child

Now this is an interesting one.  Since April 2023, the Carrera GT has been under a stop use order from Porsche due to the risk of a potential catastrophic suspension failure.   Porsche has indicated that the replacement parts will not be available until the 3rd Quarter of 2024.  Essentially this has turned all Carrera GTs into nothing more than garage art for almost a year now.  So far thought, it hasn’t impacted the Carrera GT market as 2023 values were very much on par with 2022 and the two sold so far in 2024 went for $1.7 mil. & $1.1 mil.  Apparently being able to actually drive the car isn’t a ky criteria for current Carrera GT buyers.  Longer term it looks like Carrera GTs are now $900k-$1.7 mil. depend on color and how much of their life they have spent under a car cover. 

Vintage (60’s – 80’s)

70’s Ferrari Fiberglass

Ever since I owned a Ferrari 308 GTB “Vetroresina” well over a decade and a half ago, I have always been intrigued by them.  These are the 1st generation Ferrari 308 GTBs produced in 1975-77 with fiberglass bodies.  Just over 800 were produced, making them rarer than either a similar era Ferrari Daytona or a Ferrari 512 BB.  For the better part of the last decade these “glass” 308s have commanded over a 100% premium vs. the far more common steel bodied 308s.  In the Covid era, they have traded hands remarkably consistently in the $150k range up through 2021.  Values have declined consistently since then with the last 308 GTB “Vetroresina” to cross the auction block in early Feb 2024 ending up as a “no-sales” at a high bid of $102k.   With steel 308 GTBs now looking like they are back to being $50k-$60k cars now, $100k for a 308 GTB “Vetroresina” seems about right.

Vintage Ferraris (the 60’s)

If you look at the longer-term trends on a few of the better known of the 60’s Ferrari models, the direction does seem quite clear at this point.  The Ferrari 365 GTB/4 Daytona’s sits near the bottom of the Vintage 2 seat GT pecking order and they are now rock steady in the $480-$600k range with 13 of the last 14 sales landing there.  With over 1,200 built, they are by far the most common of the Vintage Ferrari V12 GTs which is likely to help keep prices where they are today over the longer term.  The hype a few years ago that Daytona’s were about to become $1 mil. cars has aged about as well as a book by a certain British Prince.  Ferrari 275 GTB’s look to be $1.8 mil. to $3 mil depending on length of nose and number of carburetors.  The slide in 275 GTB’s has ended, and prices have now been stable for over 2 years.  One thing I have noticed is the quality of the 275’s coming onto the market has improved during this period.  The Ferrari 250 Lusso is on a similar track to the 275 GTB.  Back in 2015 they were $2 mil. cars and now $1.2-$1.5 mil. is where the market sits.  The most recent sale at auction was for $1.2 mil. for an older restoration that has spent most of the last 40 years sitting in a garage.  Values on earlier 250 GT Coupes are still sliding south.  A good example of this is a 1958 250 GT “Ellena” sold in Monterey in August 2023 for $1.1 mil but was a “no-sale” in Arizona in January 2024 with a high bid of $870k.  250 GT Pinin Farina’s are now consistently $350k cars vs. $500k a few years back.  Demographic shifts will continue to put pressure on the older cars with the less valuable or well known models taking the hit first.  These Vintage Ferraris are less appealing to the younger generation of enthusiasts who did not grow up with them on their bedroom walls.  These are also all cars that take real skill to drive and punish mistakes with massive repair bills with a high potential for broken bones. 

Summary

As of February 2024, we have a supercar market that has corrected to a large extend for the vintage cars but is in decline on many of the most recent modern models.  Interest rates have likely peaked, but a lot of the pain from that peak is still to come.  Those models that exploded in value during the Covid era have to a large extent come back to earth.  The Hypercar bubble is history, the latest ones launched are at best holding value.  With the next generation of hypercars from Ferrari, McLaren, and possibly Porsche expected in the coming years, the Hypercar market is likely to undergo a reset again.  Demographic shifts, as the percentage of the population that knows how to drive a manual car continues to decline, will likely continue to put pressure on the vintage market over the coming years.  However, if you have the cash, the coming year should provide some good buying opportunities.

 

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February 2024

 

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