The provision of the
'Coupled Ratios' weblog, expected here, has been purposefully
deferred.
Firstly to raise the
topic here-in, of vital interest to those who have commercial and
political influence as the cultural guardians of European history, and
secondly to continue to appraise the inferred 'between the lines'
details of the global 11's Q3 earnings reports.
[NB the previously
increasingly transparent nature of certain reports have seemingly
become more opaque. This the apparent corporate reaction to the recent
transitory period regards global demand-shift conditions as
experienced over the last 3-6 months].
Thus a different weblog
is furnished - given its depth, over Parts 1, 2 and 3 - regards the
micro-dynamics of the ever more valuable, and so theoretically market-driven,
pinnacle of the classic car arena.
Given usual focus on
investor interest into the automotive future, the subject matter of
classic cars is rarely mentioned by investment-auto-motives; only
previously referred to in two ways.
Initially, as a
metaphor for the careful re-building of the western banking system -
by reconfiguring and re-conditioning the old parts into a new whole
(inspired by the 'barn-find' Bugatti Atalanté).
And secondly, relative to the adoration vehicles hold within EM countries, which boosts both local old classic car restoration, and generates an impetus to rework vehicles into
'new classics'. Both encompassing the necessary trend for educationally minded, indigenously
orientated specialist workshops.
But of course today and
into tomorrow the commercial imperative of the classic car arena
grows year on year, as the collectors' collective demand rises given
the slim but enlarging top-tier percentile of the global uber-wealthy who seek-out those prestigeous, rare, luxury goods that have become artwork
“masterpieces”. Either in their own right, or as a catapulted product from the now firmly
established world of 'cultural commercialisation'.
A prizing of the very
best has always been with mankind, ever since early rulers sought to
affirm their status, from the Renaissance onward such commissioned
items deployed to create a wider economic effect, through the
fabrication of aesthetically similar pieces. As a short edition run
or otherwise, which themselves are consumed by those within the upper
and middle classes of the domestic 'social trickle-down', and
likewise to add to the trading and export economy; an early form of
climbing to the senior levels of the value-chain.
Hence from the earliest
days rare materials were treasured, all the more after near countless
hours of toil morphed said materials into something 'other worldly',
by which to entrance the owner's associates and followers.
Ironically, over the centuries the adorned and adored non-functional
but symbolic (usually jewellery), typically came to be more highly valued than basic but functional items upon which a society turned. (See Thomas More's
novel 'Utopia' for a wonderfully rendered reality-check). Yet, from
Ancient Egyptian rulers head-wear and neck-wear, through to Russia's
Imperial Fabergé Eggs,
and far beyond, the ability to have something created for, or
latterly collected for, its social symbolism initiated the commission and antique aspects of the prestige goods market.
Over the centuries as
worldwide cultures grew, it was typically the 'high-culture'
appreciation of Europe's learned 'Grand Tourers' with their
Anglo-Germanic rooted preference for Egyptian, Persian, Greek, Roman and
Renaissance items. Items which took hold – authentic or otherwise - along
with those produced items to cater for such tourists: paintings the
most evocative, transportable and 'viewable'. Such near Eastern
artefacts, displayed in stately homes, private collections, public
view private collections and later national museums.
Far more recently of
course the global wealth effect of capitalism has meant that more and
more the Chinese, Indian, Russian and South American dynasties are
being collected by rich nationals to recapture and represent homeland
histories; aswell as boost the ego and grow – or at least hedge -
personal net worth.
Over the last century
or so the very world of 'high value collectables' has expanded as the
culture industry itself has swollen; propagated by the press, radio,
television and the internet. Collectables ranging from 17th
century heurology to 18th century engraved shotguns to
19th century wallpapers to even include 20th
century “star-architect” dwellings. They are often broadly
referred generically as “art-works” - partially to ratify their
origination but also often to ratify their social worth - and
obviously come in many forms. So, across the full spectrum of luxury
goods, with obviously original cost and rarity a marked distinction
of current and future value.
However, as per
conventional 'art' (painting and sculpture), investment-auto-motives
must echo Brian Sewell's perspective. Within the painterly realms the
achievement of truly good, intellectual and socially meaningful art
has unfortunately become swamped by “bad art”, typically derived
and thematic art, this as a direct consequence commercialised
'artistry'. Art which although often carrying famous names holds
absolutely no artistic merit; the items sold for their branded
association rather than an innately powerful soulful insight.
So the terms
'collectable' and 'art' are themselves central terms of an
inflationary debased currency within an industry which must itself,
for survival and growth, promote 'value' as an end unto itself by
itself creating auras of appeal.
An intelligent person
might believe that the critical difference between good and bad art
will inevitably stand on its own merit, but in an ever blurring age
promoted by the cult of personality rather than cult of the work, the
quieter closed-quarter yet high-minded taste-makers of old, for all
their faults of traditionalism, may well be over-taken by the louder
socially-connected yet low-minded taste-agents of today and tomorrow.
Let us hope that in all
fields, from cars to carriage clocks, that intelligence prevails
regards the innate 'value' and so 'valuation' of an item – as
imbued by its original context – rather than giving way to the
adoration of falsely created old and new idols.
Automotive Icons -
Fact is that the car
was originally adopted only by those who could afford the petrol,
steam and electrically powered “contraptions”, given their
combined attributes of status and function. But even with 'automotive
democratisation' of the masses, the car still represents everything
from the greatest socialite prestige, through to a modicum of
suburbanite envy. As general trade and industry improved worker
income and so bettered people's lives throughout the 20th
century so the auto industry expanded, based upon an ever greater
tendency to segment by user and product type whilst feeding and
delivering both the consumer's life-improvement dream.
Of course, the 'best'
remained throughout from beginning to now; either because of
engineering integrity or bodywork beauty, ideally the combination of
the two to form 'the best of best'. Over nearly 100 years these range
from the 1907 Rolls-Royce 40/50 'Silver Ghost' through to today's
Bugatti Veyron.
Exactly what determines
'the best' is a question of subject understanding, a necessary
start-point for the fortunate car collector who also combines his/her
own personal leanings leading to ultimate preference. Though the
collector's reality inevitably bounded by some limit of disposable
income; even if seemingly limitless to the far less fortunate.
[NB thankfully money is
not the arbiter of opportunity to own something iconic. The average
car enthusiast may be able to afford a remaining mass produced
vehicle which displays as much, and often more design integrity. To
this end the Model T, 'Topolino', Deux Chevaux, original Mini,
original Cinquecento or Quatrelle have arguably more innate
legitimate 'beauty' than far higher priced vehicles].
Europe's “Best of the
Best” -
Nonetheless,
undoubtedly within collectors' circles the most prolific of the car
types were the purist marques which created whole cars in a true
design idiom.
The 'best of the best'
typically renowned grand prix cars, or closely related coupes and
convertibles flamboyantly 'dressed' by specialist body-stylists, and
those of bespoke 'coach-built' limousines (both staid and glamorous),
aswell as in another distinct category those early years record
breakers and latter concept cars.
The following provides
a broad but limited overview of the scene:
Though the car as we
know it was first developed as a lightweight singular entity by way
of powered tri-cycles and quadri-cycles, early years demand by the
wealthy for reliability, distance and speed soon led to a focus on
the mechanical whole by producers and so the creation of dedicated
high-output chassis, these married to a likewise hand-built body of
whichever form (racer, tourer, sedan, limousine) was sought.
A few high-minded
creator-producers sought to maintain as much complete vehicle control
as possible. But given the commercial pressure to specialise in
either mechanics or body, those with such a contrarian perspective
were few. Yet today the most prized for not diluting their artistic
intent and so individualistic spirit of their machines.
Whole Vehicle Producers
include: Bugatti and Voisin with what are considered high-art limited
production run cars, with later similar 'complete' efforts from
Mercedes, Ferrari (whilst also partially using external styling
houses), Porsche and Jaguar.
Rolling Chassis
Manufacturers included (amongst others): Rolls-Royce, Bentley,
Lagonda, Daimler (GB), Lea-Francis, Alvis, MG, Auto-Union, Mercedes Benz, Horsch, Maybach, FIAT, Alfa Romeo, Lancia, Renault, Peugeot, Delahaye, Delage,
Hispano-Suiza, Issota-Fraschini, Talbot (Talbot-Lago)
'Coachbuilders' /
'Carozerria' included (amongst others): Barker, Hooper, Mulliner,
Park Ward, Thrup and Maberly, Gurney Nutting, Freestone and Webb,
Abbot, Hamshaw, Harrington, Tickford, van den Plas (later Vanden
Plas), Corsica, Young, Graber, Franay, Saoutchik, Vanvooran,
Letourneur et Marchand, Fagoni et Filaschi, Chapron, Portout,
Weinberger, Kellner, Hebmuller, Karmann, Voll und Ruhrbeck, Gangloff,
Castagna, Ghia, Bertone, Maggiora, Farina / Pinifarina, Scaglietti,
Vignale, Touring, Zagato, Frua, Fissore
Across the Atlantic -
To provide the American
comparison, the fewer chassis-makers of premium note were Mercer,
Stutz, du Pont, the 'American made' Springfield Rolls-Royce, Pierce-Arrow, Duesenberg, Packard, Cunningham, Lincoln and Cadillac. Whilst equivalent body-builders
included Fleetwood, Le Baron, Rollston, Earl and Murphy. However,
with a lack of organised indigenous sportscar race meetings between
WW1 and WW2, there was less imperative for US made Euro-style
powerful lightweight racers.
Instead the US saw the
populist rise of more comfortable psuedo-sporty cars like boat-tail
Auburns and the rise standard sedan 'stock car' racing – leading to
NASCAR. Leaving more purist racers reliant upon European import cars
and the rare US-made vehicle like later Cunningham. In fact the late
1950s creation of NART (the North American Racing Team) using
Ferrari, though with perhaps the unstated commercial ambition of
selling more Ferrari models state-side, such as the soon to arrive
250 SWB California and later special 'NART' related cars.
Thus we see that in
actuality, there has always been a close relationship between
American and European commercial interests regards product supply to
preferred agents and dealers, given the distinct glitterati type
purchasers, most prevalent Hollywood film stars.
With the high original
price of these exotics creating a ready-made 'import and collect'
financial incentive for marque enthusiasts (such as Robert M. Lee),
as well as those closely associated with the glamorous first
purchasers, who would buy a 'second-hand' and so gain from its
exposure.
Changed Technology,
Changed Trends -
With the increased
adoption of so called monocoque chassis engineering (actually unibody
or semi-monocoque in truest sense) - effectively re-unifying
mechanics and body, and first productionised on Lancia's 1922 Lambda
– slowly over succeeding years, body-building companies either
became operationally defunct, with the best admired absorbed into
whole car manufacturers or major suppliers.
So the likes of
Tickford into Aston Martin (having already absorbed Lagonda cars) and
Le Baron into Briggs Pressed Metal then into Chrysler (also having
integrating Dodge and Plymouth cars and having used Le Baron to help
created its top-line Imperial). However, the process was not always
as wholly operationally advantageous as expected as the fiscal
backdrop of 1930s America and 1950s Europe sought a major overhaul of
product rationalisation, and so the beginnings of the 'common
platform' approach.
Few Specialists Survive
-
Whilst some
quasi-independent coach-builders survived, it was ironically only
really in Italy that they were protected by a nationally parental
FIAT, which itself had absorbed various up-scale nameplates and used
the carrozzeria to maintain their high-end positioning.
Inevitably, the
financially stronger craft-companies and the mainstream makers
absorbed such niche producers for either specialist vehicle work, as
an extended resource function or for asset re-allocation, but
primarily from the public viewpoint, associative names used as
top-line sub-brands such as Ford previously with Ghia and today with
Vignale.
Even so, a reworking of
the old carrozzeria model toward stylistic concept work, packaging
and engineering development, prototyping and specific core 'module'
capabilities in limited series production for whole cars and model
variants (typically convertibles) did allow the 'design houses' to
prosper through the 1960s, 1980s and 2000s. Indeed allowed new
entities to flourish, shifting shape as their major clients sought.
The flexible few able to adapt and survive into the late 20th
century and just beyond, functioning as both upstream concept
formulator and downstream niche builder.
But, as a consequence
of the 2007/8 financial crisis VW, Valmet and Webasto acquired
different sections of a bankrupted Karmann, FIAT absorbed Bertone in
2009, whilst VW's Audi-Lamborghini division took 90% of ItalDesign in
2010.
The European
Fascination -
Unsurprisingly, given
“Germany as the birthplace of the car, France its nursery, Britain
its school and Italy its finishing school” and Europe's millennia
of cultural predominance, the most admired creations during those
formative years were inevitably European.
As part of its own
upward industrial trajectory, America sought to absorb and replicate
all that it could learn, from the earliest runabout cars such as the
Rambler and many like it through to supercar efforts such as the
1980s Vector, 1990s Raptor, 2000s SSC and recently defunct Mosler.
But the early to mid 20th century dynamics of the US meant that it would focus upon mass-production, standardisation and so parts-bin reconfiguration to create notional 'sports cars', such as the first Corvette. Instead relying upon transplant efforts – that of inserting a powerful American engine into a lightweight European body (eg Shelby et al) – to create purist sportscars.
But the early to mid 20th century dynamics of the US meant that it would focus upon mass-production, standardisation and so parts-bin reconfiguration to create notional 'sports cars', such as the first Corvette. Instead relying upon transplant efforts – that of inserting a powerful American engine into a lightweight European body (eg Shelby et al) – to create purist sportscars.
[NB 20th
century global economic development – ie the desire to spawn large
consumer societies so as to propagate capitalism and so a virtuous
investment cycle - meant that Japan replicating the American
mass-model, so the Koreans like Japanese, and most recently Chinese
learning from all.
So, as a result of
Europe having been at the forefront of vehicle creation, during the
crafts meets industry period of late 19th century and
early 20th century – yet utilising both methods
thereafter - means that it was in comparison to the US and
elsewhere, always been the 'home' of the more exotic, arguably more
mechanically 'intelligent' and so more alluring specialist vehicle.
Hence the “European
Fascination” and attached high valuations of its products.
American Purchasing
Power -
Whilst this has been
the case for the last 50 years or so, the fact is that the 20th
century was the “American Century”, across heavy and light
industry, thereafter upstream consumer related activities such as
marketing and advertising, followed by information technology and
then web related enterprise – all paralleled by an ever deeper,
broader and expanding financial sector.
This enabled originally by a potent mix of finance shifted from Eastern Europe, industry and initial technology drawn or replicated from the best of Europe, an aspirant, immigrant population from across the poorer regions of Europe, and a new class of entrepreneurs and industrialists and largely a politically united national mindset, itself assisted by the troubles of Europe.
This enabled originally by a potent mix of finance shifted from Eastern Europe, industry and initial technology drawn or replicated from the best of Europe, an aspirant, immigrant population from across the poorer regions of Europe, and a new class of entrepreneurs and industrialists and largely a politically united national mindset, itself assisted by the troubles of Europe.
This made for the
golden age of prosperity, the greatest proportionate rewards of
course going to those industrialists who were able to put capital and
labour to work, or able to extract the money earned by workers
through leisure-time entertainment; the most prolific obviously being
the Hollywood film system.
[NB to paraphrase a
saying that existed amongst the Polish and Italian immigrants of the
time...“the Protestants grab your 'balls' during the week at the
factory, the Jews in the picture-house on Saturday and the Catholics
at church on Sunday”].
Beyond the social angst
of some workers, the fact is that the immense wealth made by those in
more fortunate positions (through being born lucky or via deployed intelligence) allowed them to commission bespoke European-made cars,
or import at a heavily discounted used purchase price such cars from
failing aristocrats.
But moreover, the
enormous success and wealth accumulation brought about by that
'American Century' has allowed that process of 'European purchase' to
continue to this day, with the impact of the 2007/8 western financial
crisis lessened given a propensity toward global-span investment
portfolios.
Thus, American
purchasing power, whilst a smaller part of the global whole, has
grown given its central role within the global whole.
Cultural artifacts have
always been representative a person's social stature. Just as
Grecian and Roman sculptures and architectural items were adored by
the North European aristocrats in the 17th and 18th
centuries, so in the late 20th century and early 21st
century, the 'high-art' created at the apex of the European era –
when art met industry through “industrial art” - is now collected
by those with the financial means.
An automotive
collection consisting of such creations, as a select group or as part
of a broader vehicle set, is deemed to provide kudos and so status.
An Important Aside -
At this point, although likewise entranced by such beautiful artifacts, investment-auto-motives must obviously reiterate the fact that a person's innate worth derives from his/her innate 'being', not financial net worth. Truly good intention, higher-self behaviour, manners and modesty are 'richer' values than pure wealth; with the best outcomes from a combination of both.
To deploy an automotive example, the Toyoda family's expensive, but long serving, comfortable but austere Toyota Century, with cloth not leather seats, said much more about their responsible dynastic position than a 1920s 'Doozy Flivver' ever did about its driver.
The Next Weblog -
To gain an insight into the price of such high culture, the following Part 2 depicts:
A. the background to
the classic car set
B. the importance of
related social gatherings
C. the collector's
basic purchase process
D. the monetary value
spent on acquiring “the best of the best”
E. the formation of
improved price tracking and indices
F. the fact that the
'market' has little true consistency
G. the basic list of
important museums and collections
I. the increasing rise
of the replica
J. the blurring of real
and 'hyper-real'
K. the broadened
'market' (original vs 'homage')
L. the commercial future of 'Californiacation'.
