Why People In Japan Are Reportedly Hoarding Supercars

Japansupertmd

People in Japan are stocking up on Lambos, Stellantis is looking at Morocco, the Beijing Motor Show is cancelled (again), and the day that Tesla isn’t the most registered EV in the United States is coming sooner than you think.

Welcome to The Morning Dump, bite-sized stories corralled into a single article for your morning perusal. If your morning coffee’s working a little too well, pull up a throne and have a gander at the best of the rest of yesterday.

When A Ferrari Is More Stable Than Your Currency

Wideryen

The U.S. dollar is strong and the Japanese yen is, well, not strong. What is a wealthy Japanese person to do? Buy a Lamborghini. There’s a great story from Bloomberg talking about this and I’m going to share the Japan Times version titled “Ferrari, Lamborghini and other supercar sales boom in Japan” because the lead photo is a chromed-up Lamborghini LP700-4 roadster.

New registrations of cars costing more than $136,000 grew 64% through the first 10 months of the year, which is even more impressive when you find out that they grew 75% the year before that. What’s going on?

After more than two years of COVID-related restrictions, drivers are spending money on new cars, while the global shift toward electric vehicles is sparking interest in supercars and the growl of their engines, according to Yasuhiro Suyama, president of the Japan Supercar Association.

“If you don’t drive them now, then when?” Suyama said.

Emphasis mine because that quote is going to haunt me for the rest of my life. It’s true. If not now, when? EVs are coming and EVs can be awesome. I also don’t think gas-powered cars are just going to disappear, but a new day is certainly dawning.

Some of this increase is likely due to deliveries catching up to orders, but an analyst in the article also makes the point that “It is better to invest in ultraluxury cars for their resale value rather than holding cash.”

Almost anything is better than holding cash, of course, but it’s true that vehicles like the Ford GT, for instance, continue to appreciate. It’s certainly better than holding Solana.

Stellantis Has Its Eyes On Morocco

Moroccotmd

Western automakers’ dream for China was access to millions and millions of customers who did not have a strong core of domestic automakers. That dream is over and now Chinese automakers are starting to export cars to Europe in huge numbers.

You know what market could potentially have millions of customers and lacks their own domestic car companies? Africa.

According to this Detroit News piece, Steallantis will invest more than $300 million in its Moroccon plant to increase production to 1 million vehicles a year.

“Stellantis’ global ambition will benefit from the strong development pace of the Middle East and Africa region that aims at contributing to creating a third engine for Stellantis, in addition to North America and Europe,” CEO Carlos Tavares said in a statement. “I trust our regional teams to achieve sustainable growth with a number one position in the market and double-digit margin, while leading the energy transition. At Stellantis, we commit to offer our Middle East and Africa customers clean, safe and affordable mobility.”

The company’s existing plant makes Peugeot 208s as well as the electric Citroen Ami and Opel Rocks-e. What’s coming is a “smart car” platform that Stellantis thinks can take over 22% of the African market by the end of the decade.

Covid Ends Hopes Of A Beijing Motor Show This Year

Qorostmd

Chinese automakers have a lot to brag about lately, but they’re going to have to do that bragging somewhere other than Beijing because, for the second time this year, the event has been postponed.

From Reuters:

The trade show in the world’s largest auto market alternates each year between Beijing and Shanghai, and traditionally attracts both international and domestic automakers, including Volkswagen, Toyota, and Geely.

It is often used to launch new models, though some new electric vehicle brands like Nio have turned to separate events, mostly online, for their launches.

This is the way of the world. Auto shows have a place, but the pandemic has merely accelerated their demise as the only place cars get shown.

Analysts Think Tesla Will Lose Its Majority Registration Advantage Next Year

Modelstmd

It’s been a banner year for electric cars in the United States, with registrations for all electric cars up 57% through the first nine months of 2022. If you were curious, that’s a 50% increase in registrations for Tesla and a 71% increase for everyone else.

With Hyundai-Kia-Genesis, Mercedes, Ford, GM, Volkswagen, Volvo, and basically everyone else stepping up their EV game it was only a matter of time before Teslas weren’t the only big player in the space.

Here’s the key detail courtesy of Automotive News:

Based on the current sales trajectory and new introductions from legacy automakers, Autonomy predicts Tesla’s share of EV sales in the U.S. will drop just below 50 percent in the first quarter of 2023 and fall to about 40 percent by the end of next year.

People like to rag on Tesla in the automotive world, but this isn’t evidence of the failure of Tesla. This is evidence of company’s success.

The entire industry was slow to take electric cars seriously and had to watch as the Tesla Model S and then the Tesla Model 3 cut into their sales. The industry learned and adapted and it’s taken almost a decade but everyone else is making cars that are now, if not better than Teslas, are at least competitive.

Also, if you have 40% of a pizza and your 12 other friends have to split 60% of a pizza you still have a lot of pizza.

The Flush

If you had to buy one new-ish hypercar or supercar (built within the last decade) as an investment, where would you (literally) park your money?

Photos: Lamborghini, TrackDays.co.uk, Qoros, Stellantis, Google

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38 Responses

  1. I wouldn’t worry about Tesla, they have a robust portfolio of current models to fall back on…….

    The Model Y is 3 model years old but 75% of a model 3 which is already 6 model years old.
    The X and S are getting pretty old. 8 and 11 years respectively.

    I sure they have more up their sleeve than the Cyber Truck and Roadster if they don’t want that pizza down to a single slice before too long.

    1. I’m not much of a Tesla fan but the the design of the model 3 and Y have aged pretty well and their range is still better than a lot of competitors brand new models. Tesla is are selling every car they produce without issue, the problem seems to be as much supply as anything, if you order one now it’s several months before you get it. If they can get manufacturing capacity up and keep cost increases under control they are certainly in a good position moving forward. If the much delayed new battery design ever makes it to production the range advantage should improve even more and to a lot of buyers range is one of the most important criteria.

    2. having seen an original S and 3 recently, I must say they’re quite modern, they don’t feel old. The only thing really to complain about Teslas is the badly engineered (for driving) suspension (I had an Audi A4 before). It’s not a lot of fun driving them at the limit.

      1. Twitter might be the thing that keeps Musk away from Tesla so the adults can work. Keep his focus there and he might stop making absurd claims and promises that he wants engineers to deliver on. If they’re quick, maybe they can update some of their models while he’s not looking.

  2. “If you had to buy one new-ish hypercar or supercar (built within the last decade) as an investment, where would you (literally) park your money?” Nope, not an investment. But if I had to choose one, it’d be an Aston Martin Valkyrie, I think. Or maybe something from Koenigsegg.

  3. Really hard to decide between the Vantage Roadster with 6.0-litre V12 engine and the Rimac Concept_One. I also like the Ruf CTR³ Clubsport. Eclectic? Certainly but it reflects my 75 years of living and how I grew.

  4. For as much as I love cars, they are not good financial investments over the long term, even cars that nominally appreciate.

    The eye-opening one for me was discovering that a simple index fund made a better return over the last couple decades than even a McLaren F1 (this was true at least as of a couple years ago, I don’t know anymore with crazy car values and stock market turmoil).

    So buying something I don’t like hoping for a financial return would be silly. Instead my goal would be to buy something I enjoy driving, while losing the least amount of money.

    My answer to that for an unlimited budget is a Gordon Murray T50. For an attainable budget, it’s probably a 6 speed GT3 or a Viper ACR.

    1. Horrific take: I’d probably spec my own GT3 with the PDK. I’d try to drive it as much as I can and in my area the traffic is constant…plus PDK is pretty universally agreed upon as the DCT gold standard.

      If I was buying it as a pure weekend car I might go with the stick…but if I owned something so amazing I’d be looking for excuses to drive it constantly. Maybe one day…it sure ain’t looking like a GT3 is going to be in the cards anytime soon but in a few years custom ordering a Macan of some sort or getting a certified Panamera will be.

        1. i have a 1968 Camaro, it is a basic 327 4 speed thing that I bought in 1993 for 5,000. I can now literally sell it tomorrow for 30K without getting any question and i have driven it and enjoyed it for all this time. I think if you choose wisely you will not lose money on desirable cars. they might have a slump, but they will always appreciate if properly cred for and used sparingly.

          1. It’s not that you’re losing money in nominal terms, it’s that the S&P 500 has returned ~15X your money since 1993 and that accounting for inflation your 6X return is more like 3X over that time.

            https://www.officialdata.org/us/stocks/s-p-500/1993

            https://www.bls.gov/data/inflation_calculator.htm

            Now obviously you’ve derived value from owning and driving it, but that’s my point. Buying a car as a mere investment almost always fails against even the simplest investment strategies. So rather than trying to chase value and resale, just buy something you like and enjoy it. The rest will sort itself out.

          2. I was about to say the same thing! I have a 1969 Camaro SS350 that I bought in 1992 for 3300 bucks. 2 years later I rebuilt the engine and transmission myself for about 2K. I still own it and it’s worth about 50K in it’s current good/fair but unrestored condition. I daily drove it for nearly 20 years. It never let me down. Other riskier investments might have a higher return, but you can’t have fun with your stock portfolio!

    2. And that’s not counting all the other expenses associated with keeping a car as an investment. I don’t need to register my index funds with the DMV every year. I don’t need collision insurance on my index funds. I don’t need to take my index funds to a mechanic for periodic maintenance. And I don’t need to have a secure garage to store my index funds.

      Of course, I can’t go for a ride in my index funds, and I can’t even admire their sleek sexy lines in my driveway.

      If somebody wants to justify to themself that a sports car purchase is an “investment” that’s fine. Enjoy your Lambo, Mr. Japanese businessman!

  5. Veyron as that thing scares the crap out of me. It was designed to do one thing and does it well. I would be afraid to end up going through the pearly gates backwards on fire.

    Granted I would have a huge grin on my face.

  6. I don’t know about that Stellantis. China hasn’t spent years getting African governments into debt by giving them loans from Chinese development banks to pay Chinese contractors to build roads and places for them to go just to let the people there buy non-Chinese cars. It’s not just military bases they want, it’s emerging markets. Belt And Road will be an economic hegemony before it’s a formal, political one.

  7. For investment, GMA T.50. None of the other new things interest me much as something I’d care to drive (no way I’d have a car that didn’t get driven). For something I’d want to actually drive on the street, Morgan Super 3, but if I had supercar money, I’d have one or two of my own car designs built.

  8. I don’t have any business experience in Africa but I do have some in Central America. A major problem in establishing a foreign business presence there was that those countries tend to have wonderful and progressive labor laws and very generous benefits. Now, nobody in small businesses follows these laws, and major domestic companies tend to skirt them by having a very small management core and tons of part-time workers. When a major foreign firm wants to come in and create a lot of full time jobs, naturally these laws must be fully enforced -it would look terrible to give them an exception. Then there is always political and social pressure on a foreign firm to pay wages equivalent to what it pays in its home country. Add in expenses for helping your suppliers to set up locally or make arrangements for a steady supply of parts to be shipped in, and suddenly the savings promised by low local wages start to melt away. Then there’s the inefficiency of training workers who have never even imagined factory work. The routines and rhythms of production work are alien and frightening to them. For a quick example, we had all our company policy training online, and set up banks of pc’s for training new employees – and we discovered not one of them knew to use a keyboard or a mouse. Next we discovered that production line work required individual hands-on training for every single one. Further even when the movements necessary were grasped (heh), there was no understanding of what they were actually doing – so if someone who didn’t know was he was doing delivered the wrong part (a box of parts is a box of parts) to a worker – said worker would try to jam those parts into their machine. It made you want to cry. We had to rotate our managers out quite often for the first few years as they became overwhelmed with the hopelessness of it all. (See: Takata Airbag in Mexico) After 4 or 5 years we finally had enough veteran employees that they could act as trainers for new workers, and as long as turnover stayed low we produced decent quality…but we eventually pulled out as the venture never became profitable.

    Too Long/Didn’t read version: Good luck Stellantis.

  9. I would literally never buy a car as an investment. Cars are meant to be driven and just having them sit in a garage is such a waste to me. I’m also a musician and I feel the same way about instruments…collecting them just to have a bunch is a waste. It drives me nuts when I see mega wealthy musicians who are like I HAVE OVER 4,000 GUITARS AND I BUY EVERY SINGLE (insert iconic piece of equipment here) I ENCOUNTER ON THE SPOT.

    Thinking about stuff that can bring people a ton of joy just sitting in some rich dude’s warehouse makes me sad. But anyway, I’ll play. As a pure investment piece I think you’d have to track something that down that’s extremely limited…so things like R8s, the volume sellers for Ferrari, McLaren, and Lamborghini (570, Huracan, California, etc), and others aren’t going to hold their value.

    It would also have to be a car with a reputation that speaks for itself…and analog super/hypercars are appreciating like crazy and will continue to do so. I can’t imagine the ultra modern hybrid stuff is going to hold its value as well for myriad reasons. I think timeless styling is necessary as well so ugly ducklings like the Enzo are out…and why not check the manual transmission box while we’re at it? As they become more scarce values will keep rising.

    I think I’d be between the new Pagani Utopia or finding the most pristine Carrera GT I can. I think they check all the boxes…extremely limited, serious reputations (or an infamous one in the case of the CGT), manual transmissions, and reasonably timeless styling. They’re desirable now and they’ll be desirable forever.

    1. Absolutely this, though if I had a yen (or millions of yen) for a supercar, it’d likely be a Miura, because a) I’m Old Skool, b) it’s a gorgeous as any car ever, and c) I’ve driven one, and it was one of those experiences one just doesn’t forget, ever.

      When I was much younger, I almost bought a Daytona. I was earning good money, and the dealer really wanted to unload it (probably because it was blue, and not the obligatory red or yellow). I should have done so, though I’d now have a rather shopworn Ferrari with hundreds of thousands of miles on the clock. “Investment cars” make me break out in hives.

      Stellantis sounds like it’s on the ball here. When automakers first took aim at China, a lot of people scoffed; yes, there are zillions of people there, but (at the time) a majority were too poor to buy a car. Africa’s in the same boat right now, but that could change quickly. When you have the bodies, the money is likely to follow.

      Wouldn’t mind seeing Tesla knocked off its perch. Their cars don’t seem particularly well made, and I don’t much dig the looks. But then, I’m not fond of many new Electro-Rides. Get back to me when Changli opens up its U.S. dealer network.

  10. The investment aspect knocks any of the electrics out. The battery ages even if you mothball the car. Not good for selling in 15 or 20.

    From a strictly collector standpoint, probably a Koenigsegg One:1. Very limited run, very recognizable name within the brand. Looks better than most of the other Ageras too.

  11. “You know what market could potentially have millions of customers and lacks their own domestic car companies? Africa.”

    picard_quadruple_facepalm.jpeg

    No. Seriously. This has been tried before. Several times. Many times. Know what businesses really hate? Uncertainty and instability. Know what Africa has a lot of? Uncertainty and instability. Africa has been fucked over so badly and so repeatedly by ‘white people who know better.’ And their brilliant idea is to come into a bunch of countries that are currently being held hostage financially by China, who is using it to further destabilize and seize control politically and economically (this is really going on.) And play white savior again.
    Oh yes. This is really going to go great. Especially when China’s basically seizing control of all the mines, political offices, and freshly built rail networks and roads that are already disintegrating due to the deliberate use of sub-sub-substandard iron, steel, and concrete.

    Nevermind that the average income of someone in Senegal is about $135 per month, and a high skilled worker – like a programmer – might see $654 a month. And that is by far one of the most stable and developed countries over there. (Where ‘stability’ is having free and fair elections, and the term-limited president is openly talking about using a constitutional coup to stay in power.)

    “The industry learned and adapted and it’s taken almost a decade but everyone else is making cars that are now, if not better than Teslas, are at least competitive.”

    The worst GM has better build quality and materials than Tesla, no matter what’s under the hood. And it’s cheaper. The only thing propping Tesla up at this point is the cultists, and as those dry up, it’s going to be a death spiral. Especially since they still haven’t delivered on – hey wait wasn’t the Cybertruck supposed to be everywhere last year? Yeah.
    It’s also not helped by the fact that everything they make has painfully dated styling at this point. People can’t tell a Model 3 from an S, and the Model S hasn’t gotten so much as lighting changes in 10 years. There’s ‘brand identity’ and then there’s ‘everything is the same old design.’ Which is decimating their place as a ‘status symbol.’ Your brand new 2023 Model S looks just like a 2012 Model S, except with worse paint.

    “If you had to buy one new-ish hypercar or supercar (built within the last decade) as an investment, where would you (literally) park your money?”

    We already know my answer to that question. The 997.2 GTS is a supercar (190MPH+.) But if I had to buy something else?
    Koenigseggsandhamandbacon Regurgitator… er.
    Koenigsexcusemewhat Reverba?
    THAT SWEDISH GUY’S PHEV CAR. That one.

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