2021 ends, and so much is changing with it

With 2021 coming to a close, I reflect back on so much that has - and continues to - change rapidly in the world. This set of changes has indeed affected all things automotive.  From a host of new EV models and companies coming online, to the sports and collector car market having a tremendous surge in sale prices, to an ongoing parts and supply shortage that has affected every make, model, and parts supplier in the industry, to the what-were-they-thinking grills of the new BMW M models, there has just been so, so much that has happened this past year that it's been hard to keep up.

Let's pretend this is Long Beach. Only the containers are ships waiting in the harbor.

The guys at Donut Media made a quick and entertaining video on how the shortage currently came to be. Its worth the watch.

 

As far as the automotive market in general, much like housing, it's a seller's market. Prices of new cars are virtually non-negotiable and in some markets with high demand models, are being marked up at the dealer with regularity. This has unsurprisingly increased demand in the used car market, where late model cars are getting extraordinary values. Sellers can, and most certainly are, able to ask a lot more than they normally would for typical Camry's, Accords, SUV's, and minivans. Dealers are putting strong offers on the table to try to get your trade in as well (Mazda has been coming at us every other month for our CX-9).  One could sell their two to three year old car for nearly the same price they probably bought it new. The Tesla Model 3 market is a prime example of that.

And if you're lucky enough to own any car with sporting intentions from the 80's onwards, now might be the time to cash in your chips if you've been on the fence about selling your modern classic.  The market is insane for any JDM halo car - particularly first gen Acura NSX's and fourth gen Toyota Supras.  I just witnessed the first $200k sale I've seen for a pristine NSX on bring-a-trailer.com, while 6 figures for other sub-100k mile ones are a practical guarantee, assuming its equipped with a manual transmission. Integra Type-R's from the late '90s, low mileage Nissan Z32 Twin Turbo's from the early '90s, and others in the category are increasing in value despite having modern successors debuting in  2022, while long time favorites like the Lexus IS-F and GS-F, and anything else with a strong naturally aspirated V8 are holding their own when they should have depreciated 20% more by now.

If only I had the foresight 11 years ago to hang on to it for a bit longer....

Why the tremendous surge in older sports coupes and sedans?  Well the end of the internal combustion engine era is actually upon us.  It's here folks. We're in likely the last decade where I.C.E. car sales represent the majority of production models.  Many countries (and now a handful of states) have already targeted 2030-2035 as the final years for new car sales with combustion engines, period.  That means we're also in probably the last decade of acquiring anything that has been sought after for that particular driving experience of yester-year that enthusiasts seek, at still attainable prices. Witness what's going on in the '90s JDM market, where sellers are cashing in on what they've held onto and selling at eye-watering numbers. The Euro market has seen a dramatic upturn in BMW E30 and E46 M3's, E39 M5's, '80s and early '90s Mercedes AMG cars, rare sport wagons, etc. V8's across the board are an endangered species, quickly being replaced by turbocharged 4 and 6 cylinder hybrids as a stop-gap measure to the eventual electric transition. Old American muscle which were a dime a dozen are no longer depreciating, and good condition '80s through early '00s Mustang GTs and F-body Camaros and Firebirds are cool again, having hit bottom a decade ago.  And Porsche models continue their ascent into the stratosphere, at head-shaking prices, with older 911's often out pricing the MSRP on new ones.

 

Great article here from Hagerty on the current cars on a bull market run.

 

Adorned on the walls of 80's kids. Now, the same kids are replicating that garage while they still can!

Speaking of the end of the I.C.E., who are the new players in the EV space? Lucid, Rivian, Polestar have all made a big splash with proven demos and production quality models releasing imminently that represent another leap forward for the all-electric driving experience. With the necessary range, build quality befitting the price, dramatic style, and limitless performance, Tesla's "ace in the hole" super-charging network, is, in my opinion, the only thing that's going to keep them ahead while the competition starts to takes nibbles of sales in the coming years. Let's not forget that nearly ALL legacy automakers have EV models out now, that are going to make the competition quite interesting in the years ahead. 

Something tells me we're going to need to adapt this charger to other brands soon...

 

But if you're looking for your dream car from back in the day, it would be wise to keep a close eye on the market so you know whether now is the time to jump on it, or whether its so irrational that you should hold and hope for a correction in the coming couple years, or just plain reevaluate what that particular driving experience is worth to you.  On the flip-side, if you're looking for a new car but are not in a rush, you might be wise to hold off on spending thousands more than you normally would until the supply-side issues in inventory and production rights itself, which may take us to 2023.  Whichever way you slice it, the automotive market is putting the squeeze on everyone.