The collector car market - Italy

1.2 The global market

The global automobile market is changing, especially in developed countries. The electric transition is getting closer, with more and more countries implementing plans to discontinue production of heat-engine cars in the coming decades. In this transitional climate, a wistful feeling is growing among many enthusiasts toward what used to be the cars of yesterday: simple, engaging, technology-free, with a greater focus on beauty than on functionality, and capable of providing unique thrills related to driving pleasure and aesthetic sense.

The classic car market has already experienced a moment of great expansion in the period following the **** crisis, dragged along by the desire to find alternative investment objects to financial products, and may see a new expansion in the coming years, linked to this melancholic sentiment and, once again, to the uncertain conditions of the financial markets. The trend to seek alternative investments, particularly so-called collectibles, is captured by the Knight Frank Luxury Investment Index (***), which reports growth in these assets of ** percent in ****. Cars were, along with art, the sector with the highest growth, registering +**%[***]. The same agency also conducted a survey in which it asks leading financial advisors, private bankers, and family offices what they think their clients are likely ...

1.3 The Italian market

The Italian classic car market, although less large than the American or British markets, is one of the most important in the world, thanks to the presence of a large number of prestigious manufacturers and the historical importance that cars have in our country.

Sales of classic cars through auctions, which are also the main distribution channel in our country, recorded a total value of $**.** million in **** [***].

The following chart, constructed from data from the Automobile Club of Italy, helps us understand the rarity of classic cars in the country.

Distribution of vehicle fleet by age group Italy, ****, thousands of units ACI

Cars registered more than ** years ago, automatically defined as classic, makeup only *.* percent of the total in Italy. This is why we believe that the automatic definition of vintage cars for such old cars is correct, given that their preservation is particularly laborious and expensive, and that, even in the case where they are not luxury cars, their rarity makes them collectible and gives them historical importance. For cars between ** and ** years of age, on the other hand, the problem is more delicate, and as Angelo Sticchi Damiani, president of ACI, points out, there is a need for a ...

1.4 The impact of Covid

The impact of covid on this sector has been considerable, not so much because of the decrease in demand per se, but because of the impossibility of conducting physical auctions. Historica Selecta's study, on classic cars and their auctions in particular, points out that "A classic car cannot be properly evaluated through photos or videos. You have to look at it live to appreciate the quality of the paint, the continuity of the lines. You have to touch it, open and close the doors to check that the assembly has been done correctly, smell the leather and hear the engine noise with your ears. To appreciate a classic car, you need more sensory information than a photo or video can convey, no matter how detailed they are."

In ****, many auction houses offered auctions remotely, to allow the continuity of the classic car buying and selling service; however, the results were disappointing, both in terms of total sales, as said in Section *.*, and in terms of the percentage of cars sold to those offered, which dropped to ** percent in the ****-**** vintage, only to return to the previous level of ** percent in the following year, with the return of physical auctions.

Percentage ...

2.1 Domestic demand

Trends in car registrations in Italy clearly show that classic cars are much rarer than recent ones, with output not growing for the first time until the past decade. Production was particularly limited until ****, then there was a definite upswing that lasted until the early ****s, and then there were alternating periods of expansion and contraction in supply, but it always remained above **** levels.

Passenger car registrations Italy, ****-****, millions of units Unrae

In addition to this, it is estimated that the number of cars scrapped each year is about * percent of those produced each year, with the oldest cars being the first to be scrapped. On the basis of this yearly version data, which is not included in the study so as not to go on too long (***), the following registration periods are looked at as the most important ones about the rarity of classic cars produced since the postwar period:

****-****, ****-****, ****-****.

According to an analysis by the Auto e Moto d'epoca - which is Italy's leading vintage car show - in ****, the best-selling vintage cars in Europe were from the **s, followed by young timers (***) and cars from the **s.

Best-selling classic car categories Italy, ****, % Autoemotodepoca

2.2 Demand drivers

Classic cars are a so-called passionate investment, the characteristics that fuel their demand are therefore not only rational but related to a prospect of future price increases justified by objective data. The investors' choices are mostly led by the very passions and emotional movements that drive a person to see the classic car as a time machine, which takes him or her back to the days when he or she was a child, or to particularly appreciate its aesthetics, the child of a creative process that has changed profoundly over the years. The main characteristics that drive the Italian market are:

Passion for history: the history of the automobile, and in particular the sports and luxury car category, has deep roots right in the country, although its beginning is troubled. After the unification of Italy, our nation is poor and the roads were practically impassable, at the end of the **th century, there are only *** cars on the road. Only a few far-sighted entrepreneurs glimpsed the potential of this medium; in ****, Fiat was born. Wars limit automobile production, even though it was Mussolini himself who asked Fiat to produce the first car suitable for mass distribution, which had to cost less ...

2.3 The geographical distribution of demand

The demand for classic cars in Italy is concentrated in northern regions. To support this assertion both the online sale ads can be analyzed, where we find more than half of the offers at a distance of less than *** km from Milan [***], and the geographical distribution of the major events related to the sector and auctions dedicated to the sale of classic cars:

Concorso d'eleganza Villa d'Este: this is one of the most prestigious events, with a selection of classic cars among the rarest in the world. It is held annually in the villa of the same name located on Lake Como. Gran Premio Nuvolari: Another important race for historic cars that is held annually in September. The race is named after the legendary Italian driver Tazio Nuvolari and runs through several regions of northern Italy. Vernasca Silver Flag: an elegance show-off for classic cars held in June in the province of Piacenza. The event showcases historic racing and sports cars along a route that winds along the scenic roads of the Piacenza Apennines. Modena Cento Ore: A race for classic cars that combines circuit racing and road tests over a span of about *** hours. The event is held annually in ...

2.4 New demand trends, youngtimers

One category of cars that has recently gained recognition as classic cars, or will gain it in the coming years, is the youngtimer. These are cars between ** and ** years of age. Recently, this category, which includes the likes of the Ferrari F** and F** or the Lancia Delta Integrale, has been gaining great popularity [***].

Many cars in this category can be considered entry-level in the classic car world, given their relatively affordable prices. In addition, they often offer conveniences that are rare for classic cars, such as air conditioning and a radio, and have driving manners and safety features that make them suitable for everyday use. These features are attracting a growing number of young buyers, often younger than the cars they drive [***].

Auto e Moto d'Epoca also underscored this trend, speaking precisely of the "young timer phenomenon" and reporting the commercial successes these cars had in the last edition of the show, surpassing, at the transaction level, all other categories.[***]

3.1 The market structure

The Italian classic car market is divided between online ads and physical auctions. Often the former category deals with sales of cars with lower prices, while the latter is reserved for dealing with rarer and more expensive pieces.

The main sites for classic car sales are:

Autoscout**: is one of the largest used car ad portals in Europe and also offers a large selection of classic cars. In Italy, those over ** years old number more than *,***. Subito: is a popular free classifieds portal in Italy, covering several categories, including cars. Those over ** years old number more than **,***. Classic Trader: is a website specializing in buying and selling classic cars internationally, with over **,*** ads, about *,*** of which are in Italy. Auto d'Epoca: is an Italian portal dedicated exclusively to classic and vintage cars. The site offers ads for cars for sale, as well as information on events, rallies, and clubs dedicated to classic cars.

The main auction houses operating in Italy, however, are [***]:

RM Sotheby's: is one of the best-known auction houses in the world for the sale of luxury and collectible classic cars. It regularly holds auctions in Italy, often in conjunction with high-profile events such as the Concorso d'Eleganza Villa ...

3.2 The value chain

3.3 The maintenance market

A survey conducted in **** by FIVA shed light on the expenses that Italian owners of classic cars incur each year for the maintenance of the vehicle. Owning such a car involves an average expenditure of *,*** euros, while expenses directly related to maintenance and use (***) is *,*** euros.

Breakdown of annual expenses related to owning a classic car Italy, ****, € FIVA

Based on the data provided by the survey, the cost of classic car repairs alone in Italy can be estimated.

A historic car is driven *,*** km per year. From here, assuming an average fuel cost of * €/liter (***), and adding the flat road tax of **.**€ and the average insurance cost, which for the category is ***€[***], you can estimate the expense for annual use to be about ***€. Subtracting this figure from the maintenance and use figure leaves a maintenance expenditure alone of ****€ per car. There are *.*** million classic cars in the country, which would bring the total repair market to be €*.*** billion. This figure would account for about ** percent of the turnover of the automotive repair industry. It must be taken into account, however, that many cars that are still registered are no longer used and therefore not even maintained, so the value is realistically ...

4.1 The type of supply

In the Italian market, the most popular classic cars, considering both online and physical channels, are [***]:

Fiat, Porsche, Alfa Romeo, Volkswagen, Lancia, Mercedes, Ferrari, Maserati, Lamborghini, Aston Martin.

Here is an in-depth look at some of the most iconic in Italy:

FIAT

Fiat was Italy's first major automaker, founded in ****. It has enormous historical value not only for the city of Turin but for all of Italy. It produced a large number of iconic models, most aimed at the middle and lower classes of the population.

Porsche

Porsche is a German brand founded in ****. It produces sports cars known worldwide for their iconic styling, practicality, and unique location of the engine, which is still located on the rear axle. The most iconic cars of this brand are, according to the official website:

Alfa Romeo

Alfa Romeo is a historic Italian brand based near Milan. Founded in **** as A.L.F.A., the company was later bought by Nicola Romeo, who changed its name to its current one, in ****. It has participated in some of the world's most prestigious car races and has produced some of the most historically important models in Italy.

Lancia

Lancia is another Italian brand that has had ...

4.2 I Prices

Concerning the cars listed above, average prices as of March **** are given, as identified by classic.com, a site that groups together the leading international classic car bids and auctions.

Record-breaker: it is worth mentioning at this point that it was precisely in **** that the record previously held by the Ferrari *** GTO as the world's most expensive car was broken. In fact, during the RM Sotheby's auction held at the Mercedes-Benz museum in Stuttgart, a **** Mercedes *** SRL Uhlenhaut Coupe was sold for *** million euros. The car was created in only two examples and is based on the *** SRL driven in the ** Hours of Le Mans by Juan Manuel Fangio.

The same site also provides a ranking of the cars whose value increased the most in ****, the ranking judges the difference between the best price obtained in **** and the price of the previous sale. At the top two places are precisely the Ferrari F** and F**, testifying to the previously mentioned growing popularity of youngtimers.

Top ** classic cars by price increase from the previous sale World, ****, US$ million Classic.com

4.3 New supply trends, the rise of classic cars

All available data on the registration of cars in the past decades reveal that the ****s and **s were the years with the highest production, for this reason, it is likely that in the coming years, the supply of classic cars will increase considerably, as these vehicles will progressively turn ** years old. However, this trend on the supply side seems to be well offset by the trend regarding demand, analyzed in section *.*, which indicates precisely a strong appreciation of youngtimers.

Other data to consider when making predictions about the future of the market are:

The general trend of the economy, which is now in a very delicate moment, with the prospect of a new banking crisis and, at the same time, of strong inflation [***]. In this climate, it is possible that the liquidity needed to purchase classic cars, which until now has generally been plentiful, will come in short supply. Pollution laws: it is not known how various governments will deal with the issue of classic car circulation. For now, they have not been touched in any state, but, if restrictions on the circulation of polluting vehicles were to expand to this category as well, classic cars would practically become pieces ...

5.1 The regulation

Laws concerning classic cars in Italy concern [***]:

Circulation of historic vehicles: Art. ** Highway Code, defines the characteristics of vintage vehicles. Art. *** and *** Implementation Regulations to the Highway Code Ministry of Infrastructure and Transport Decree December **, **** Ministry of Infrastructure and Transport Circular No. ***** of October *, **** Ministry of Infrastructure and Transport Circular No. ***** of October *, **** Automobile Fees: Reconnaissance sheet of regional laws Law ***, December **, **** Resolution No. */ DF, June **, ****, Ministry of Economy and Finance, defines a **% stamp duty reduction for vehicles between ** and ** years of age if of historical significance. Art. ** Law No. ***, Nov. **, ****: defines the exemption for all vehicles over ** years old from paying car tax and defines a flat road tax of €**.**. Provincial Transcription Tax (***): IPT for historic vehicles, the transfer of ownership of staric alleys involves payment of a flat fee of **.**€ Restraint systems: Art. ** Highway Code Circular B ** **** DMV. Traffic documents ACI Circular - Prot. no. ***** of **/**/**** Legislative Decree No. ** of May **, **** Issuance of license plates and registration documents Law Dec. **, ****, no. ***

The Italian regulatory landscape defines classic cars as several economic concessions and exemptions, as well as the obligation of a biennial overhaul.

Some cities in which we find restricted traffic zones have also defined exemptions for classic cars, ...

6.1 Segmentation

The classic car market is segmented into:

Online sales sites, Auction houses, Sales and maintenance dealerships.

Online sales sites:

Auction houses:

Dealerships:

• AutoScout24
• Subito.it
• Classic Trader
• RM Sotheby's
• Bonhams
• Artcurial
• Finarte S.r.l.
• Aste Bolaffi S.p.a.
• Ruote da Sogno S.r.l.
• Luzzago 1975 S.r.l.