Hagerty Predicts a $2M Japanese Classic Car in 2022 as Values Spike
The firm’s valuation expert offers his insights into the latest trends in the classics market.
Hagerty’s Manager of Valuation Analytics, John Wiley, is well known for making predictions for the classic car market. His 2022 list includes five prognostications about the growth of online auctions, big upcoming sales of Japanese cars, the fate of project vehicles, an increase in $10-million-plus classics, and higher prices for SUVs and supercars. I needed to know more, so I called him up for details.
First up, let's talk about the growing Japanese classic market. Wiley believes a confluence of two things are at play: on one hand, there's a lot of appreciation in the market in general. That means people are paying more for exceptional cars. On the other hand, there's increasing recognition that some Japanese cars, especially those that were built in the 1990s, are pretty special outright. Those that are unique and have a good pedigree, like a Nissan Skyline or Lexus LFA, are likely to break the $2 million threshold at auction this year.
"The Skyline is seen as the pinnacle of that era of car production in Japan," Wiley says. In fact, if you have one of these models in your garage right now and it's in great shape, hang on because you're about to have a wild ride.
The next prediction on the list is that sales at online auctions will double again. There are already some pretty big online auction houses that are doing very well, like Hemmings, Bring a Trailer, and Collecting Cars. Some of the traditional companies like Mecum and Barrett-Jackson have boosted their online presence in the last few years. Seriously, John, is there room in the market for more auction houses? He says yes, and to expect to see more upstart companies to emerge. He's also confident they’ll succeed.
“There are a couple of online auction companies that started last year and they seem to have regrouped or are sort of deciding if they want to continue in this space,” Wiley says. “But I do think that the online options will continue to grow. Part of that is that it seems like the big auction companies have trouble fulfilling the supply of cars. So there are a lot of people that want to try to sell their vehicle on Bring a Trailer, for instance, but they get turned away for one reason another. That creates room for other online auction companies. All of the sites will continue to grow too.”
He also believes the project car segment will stall, which set off all kinds of alarm bells in my head. The ‘ran-when-parked’ segment of the classic car market has been declining for some time, Wiley observes, and it doesn’t appear to be picking back up. Visions of half-finished pre-war and later classics filled my head.
“There are some generational trends at work; aging baby boomers may be less inclined to take on a restoration that will carry into their 80s,” Wiley says. “And many younger enthusiasts are after vehicles they can use and enjoy with their families.”
In the meantime, skilled restorers who take on comprehensive projects are retiring and leaving the industry faster than they're being replaced, Wiley notes. On top of that, shops are slowed down by the labor and parts shortages the industry is facing, which also increases costs.
“The biggest factor is simple math,” Wiley says. “It's rather tricky to bring a rough car back to life without winding up financially underwater. As such, cars with minimal needs will continue to be the most sought after.”
If that sounds as depressing to you as it did to me, Wiley points out that you can take solace in the fact that his predictions don't always come true. I asked him if he’s worried about that particular outcome for project cars, and he says no.
“I think there's a lot of information available online, and I think generally if you can make it in the past then you can figure out how to make it again,” Wiley says. “So I'm not as concerned about knowledge disappearing or being lost.”
I'm not sure I share his confidence. After speaking with the head of the Automotive History Preservation Society Bob Germotta this week, who is working feverishly to capture as much historical data as he can about classic cars, I'm more concerned about that than ever. CEO of auction house Barrett-Jackson Craig Jackson agreed that project cars are slowing, and it’s painful, he told me last week. He thinks restomods and electromods will end up dominating.
“Car collecting is going to keep evolving,” Jackson says. “I’m still putting fire-breathing dragons under the hood; ZR1 engines and stuff like that. But hybrids and electrics will be next.”
After seeing how cars are selling at the Scottsdale Barrett-Jackson auction this week with skyrocketing prices, it looks like Wiley is on target. I'll keep my eye on the auction market; now we wait and see.
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