China poised for classics boom, writes Tim Huxley
Increasingly, the roads of Hong Kong and big mainland cities are becoming clogged with exotic super cars such that the sight of the latest Ferrari or Porsche barely raises an eyebrow. The packed crowds around the Hong Kong Classic Car Club's October show in Central, however, suggest a growing interest in the cars of yesteryear. One of the stars of the show was a Chinese Red Flag limousine of the type used to carry dignitaries around when any car was a rarity in China, and long before the mainland became the world's biggest car market.
The owners might be enthusiasts who pour tender loving care over their prized motors, but in many cases, the cars have proved a shrewd investment with prices having skyrocketed as more baby boomers reach a stage in life when they can indulge in something redolent of their youth.
Hong Kong Classic Car Club chairman Ian Foster has seen club membership climb to 600, and more cars are being imported. "There are no real 'import restrictions' in Hong Kong, apart from not being able to register a left-hand-drive car. If the imported car is more than 20 years old, it is exempt from Environmental Protection Department tests, so with just an MOT [roadworthiness inspection] and an agreement on import duty and you can quickly be on the road," he says.
Over the border, it's a different story, with the import of pre-owned cars not permitted, but that has not stopped a high level of interest being shown there.
"There is a huge market and interest in China," says Foster. "When we take our cars to the mainland on our Club's China Drives, we get swarmed by admiring spectators.
"They have few Chinese-made classic cars from the 50's to the 80's except for the Red Flag and a few lesser models, and the BMW replica motorcycles, all of which have a strong following.
"When the door opens, there will be a lot of opportunities for selling left-hand drive cars."
So what does Foster expect mainland buyers to look for should the market open?
"I think it will be investment led and the prestige of driving something unique. The Chinese public was not exposed to Western cars so have no real relationship with, for example, a Lamborghini Countach, like every British or American teenage boy does.
"Now the Chinese consumer will see films with Ford Mustangs, Ferraris and so on, and want one of those to be like their hero."
No car has attained "classic" status through cinema quite like the Aston Martin DB5, the ultimate James Bond car. With the current release of the latest in the film franchise, Skyfall, Bond's DB5 makes a welcome return. Will this see a further boost in demand and awareness of one of Britain's most recognisable exports?
Nestled in the small British town of Olney, Buckinghamshire, just a few kilometres from the spiritual home of Aston Martin in Newport Pagnell, resides the premises of Desmond J Smail, one of the leading specialists in the sale and restoration of Aston Martins.
Buying a car from Smail is not like walking into a soulless showroom on Gloucester Road; it's an experience to be savoured and prolonged.
His office is an Aladdin's Cave of motoring memorabilia and client discussions will often include a full English breakfast at the friendly cafe next door. Of Skyfall, Smail says: "It will bring awareness of the marque and especially the particular model. They have portrayed the model well, it's a classic car with no silly modern modifications. People now in their 50's dreamed of this car as children in the early Bond film Goldfinger. How many of us had that famous Corgi model of it?"
He says the main problem now is the high prices. A mediocre car will cost £250,000 (HK$3,100,000) and a fully restored model about £450,000.
Small is confident Asia will become a strong market, but it's not there yet.
"We haven't seen the buyers from China yet," he said. "They seem obsessed - no, that's the wrong word - more impressed, with the newer and modern supercars. They will in time understand the classic market. Aston Martin only made 880 DB5 hard tops and 123 convertibles - that's for the whole world. When the Asian market wakes up to the fact that these cars are as rare as Ming vases, I feel the market will change drastically, there will not be enough cars to satisfy this emerging demand."
The fact that you cannot import classic cars to China doesn't necessarily mean there will be no Chinese buyers until the rules are relaxed. Duncan Hamilton & Co is one of the leading dealers of classic road and competition cars in the UK, with an extensive global client base.
Founded 60 years ago by a leading British post-war racing driver, the firm is now run by Adrian Hamilton, the founder's son.
"The classic car market is a global phenomenon, and not being able to import to one's home country doesn't preclude an involvement. We buy and sell some of the world's finest motorcars on behalf of collectors and can look after the vehicles as required."
Hamilton's business is as much bespoke brokerage and advisory to clients as it is specialist dealer. He works closely with clients in sourcing specific cars, some of them unique such as the Aston Martin DB5 shooting brake, built for Aston Martin founder David Brown.
Like Desmond Smail, Hamilton works with clients who now find themselves in the position of being able to acquire cars that stirred their emotions as young boys.
One such project, undertaken for a Dubai-based businessman, was not related to a specific car manufacturer but involved assembling a collection of racing cars that all competed in the blue and orange colours of Gulf from the 1960's onwards.
A total of 22 of the most iconic racing cars from four decades have been assembled over 2-1/2 years and such is the passion of the collector, it has included acquiring the original Porsche racing car transporter.
Hamilton tracked down the original vehicle in Florida and shipped it back to the UK.
"It looked like it had been at the bottom of the ocean for 30 years - it was a total wreck."
Fourteen months of restoration - and a £300,000 investment - now have it looking like it was made in the early 70's. Putting this collection together was not just an enthusiast's dream, but a very sharp investment - the fleet is estimated to have increased in value by more than 30 per cent in just two years.
So where do experts like Hamilton and Smail see the future classics coming from?
"Ferraris have always been strong currency and their star shows no sign of waning," says Hamilton. "The McLaren F1 [the 90's supercar of which only 71 road going versions were built] has a bright future. It won Le Mans yet is road legal and utterly usable. There are not many Le Mans winners you can drive to the shops."
Smail also sees rarity as having value, but favours slightly less exotic as his future classics.
"The cars that seem hot at the moment are, as usual, the rarer Ferraris and Aston Martins, especially the models that have a short production run, like the DB4 GT Zagato, DB4 GT and any convertible model. Italian coach-built cars are also very popular at the moment."
What is the classic of tomorrow? "The cars fetching high prices at the minute are the fast Fords of the late 60's, like the Escort Mark I in it's various sporty modes such as the RS 1600, Mexico and RS 2000. The Ford Capri is also showing signs of interest, probably owing to cult TV shows like Minder and The Sweeney. The one car that is very much on the rise is the old faithful Mini - I see some now fetching in the region of £40,000 to £50,000."
While classic cars can be a great investment, they can also be a huge expense to maintain, particularly in a place like Hong Kong.
Foster says: "It's important to emphasise that one has needs to maintain and look after your investment. The worst thing you can do with a classic car is to leave it sitting in Hong Kong - it's mechanical and electrical systems will break down and the humidity will encourage rust."
It's also not easy maintaining or restoring a classic here.
"Restoring a classic car takes time and space, as well as old-fashioned mechanical skills. Every year more of the old mechanics retire and the new guys are trained only to plug the car into a diagnostic computer.
"There are still some specialist shops in the New Territories who can refurbish a car, but it's going to cost you. The best option is to get the best car you can find in Britain, Australia or New Zealand [right-hand-drive countries] and then import it."
However, Foster has found classics in Hong Kong.
"I found a rare right-hand-drive DeLorean hidden under boxes and two inches of dust. It's now 100 per cent perfect. Most old cars become scrap metal. I once saw a Rolls-Royce being hacked up for scrap in the New Territories, you'd never get that happening overseas."
Desmond Smail also cautions on cost. "For the first-time buyer, affordability is a major issue, but you find that most beginners tend to look after the cars themselves, which you can do with a classic because it's only later cars that have fancy electrics.
"Most people can, and want, to play around with their 'project'. Only buy what you can afford, and always remember the old health warning: 'Classic cars can seriously damage your wealth'.
Adrian Hamilton recommends putting enjoyment first and making financial returns secondary.
"Motor cars should ideally be bought for enjoyment. If they then gain in value, that is a bonus. Good provenance is vital and be sure that you establish as much of its history as you can.
"Always buy the best you can afford and don't be afraid to pay what is being asked, as Charles Rolls [co-founder of Rolls-Royce] said: 'Quality continues long after price has been forgotten'."