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Photo credit: Kurt Engelhorn
Classic Car collector Kurt Engelhorn and his advisor Florian Seidl talk about the passion of collecting, market developments, the future of St. Moritz Automobilwoche and future business opportunities in Roarington. An exclusive interview in three parts.
Part 1: How someone becomes a collector, what he should pay attention to and why Kurt Engelhorn needs his advisor.
Kurt Engelhorn, important classic car collector with his British racing green Jaguar D-Type.
Where does your interest in classic cars come from?
Engelhorn: My interest in Classic Cars became more intense in 1994 when we moved to England with the family. The first cars there were a Land Rover Series II and a black Jaguar MK 2. Especially the Jaguar sparked my interest. They were still relatively affordable, beautiful, and fast back then. However, a philosophical component always played a role for me.
In what way?
Engelhorn: Even before I moved to England, at the beginning of the 1980s, the question in my mind was: What is the ideal car? I was living in Switzerland at the time. Finally I came to the conclusion: The ideal car is the Lotus Seven. My first real car was a Donkervoort S8. But my interest in cars actually developed in the Lotus Seven.
Before that, you had rather no interest in classic cars?
Engelhorn: No. Actually, not on ordinary vehicles either. I only drove used cars. I bought any old box and drove it until it broke down.
"Ten or twelve years ago, I had about eighty vehicles sitting around. I got a little restless, wondering, "Where is all this going?" It became clear to me that I had to professionalize it all a bit." Kurt Engelhorn
Then the classic cars came?
Engelhorn: Yes. Over time, there were more and more. Ten to twelve years ago, I had about eighty vehicles standing around and a handful of nice motorcycles to go with them. I got a little restless, wondering, "Where is all this going?" It became clear to me that I had to professionalize it all a bit. That's how Florian Seidl came into the picture as a consultant, who has a great deal of experience in the care, management and development of collections of historic vehicles.
What was so urgent?
Engelhorn: With so many historic vehicles, you have to deal with the mechanics and the restorers, guide them and keep them under control. That's how we slipped into a professional process over time.
You could have sold objects, made the collection smaller and more manageable. Or do you not sell as a matter of principle?
Engelhorn: We do sell, too. Florian has brought order and structure to the collection. Of course, that was also connected with sales, with the idea of reducing. Which I also regretted in part.
Engelhorn: It was also about bringing a certain focus into the collection. The two of us have always had a healthy discussion about what is actually necessary to maintain the right style in the collection. That also has to do with common sense. That's the only way to make the right decisions.
What does all this mean?
Florian Seidl: Initially, it was about converting the existing collection into a coherent field. It was about reducing the collection's overfeeding. This was initially based on the personal use of vehicles by the collector. With the increasing number of vehicles, the ratio got a bit out of balance.
Florian Seidl, advisor to Kurt Engelhorn, specializes in the care, management, and development of classic car collections.
How can this be restored?
Seidl: From a collection management perspective, the number of objects should be in reasonable proportion to the existing values. Of course, this includes the collector's personal inclinations towards certain historic automobiles. The special vehicles should then be found and integrated there.
"From a collection management perspective, the number of objects should be in reasonable relation to the existing values. Of course, this includes the collector's personal inclinations towards certain historic automobiles." Florian Seidl
Perhaps the collector sees this quite differently...
Seidl: Kurt Engelhorn once coined the right expression: "A collector collects." For cultural reasons alone, a collector is not a dealer. There is a fundamental difference. Today we have many market participants who actually call themselves collectors, but are basically always "engaged in trading". We don't want that.
Seidl: What has always interested us is that if there is an interesting vehicle on the market but it doesn't quite fit the collection character, we can certainly buy it, also because the financial resources are available. If there is a collector who cares about this cultural asset, then we will give it back. That is a logical consequence that has to do with the character of collecting.
Do you see collecting as part of wealth accumulation?
Seidl: That always has to be judged from the viewpoint of usage. For example, anyone who uses vehicles for historic motor sports thinks in different contexts and acts in accordance with the intended use. Per se, this becomes a commodity, so to speak, which also triggers higher costs.
What does this fundamentally change?
Seidl: Anyone who speculates exclusively on value appreciation is leaving a 15-year-old factory race car from a significant racing series in the garage. He is simply waiting for the car to be in demand again after another 10 years because the fans from back then want to see and own the vehicle again. According to this historical formula, money can be made again when the car is sold. However, at the end of the day, such passive behavior represents speculation. However, if you use a historic vehicle in your possession for daily mobility needs or even for a racing activity, it costs a lot of money and you risk accidents and possibly a loss of authenticity in the automobile. All in all, we are talking about a complex environment here.
What would active behavior mean?
Seidl: First of all, very intensive discussions about what is happening in the collector vehicle markets. In the past thirty years, we have seen substantial, sometimes immense increases in value in the overall market. Whether that will continue, however, one can only speculate. In recent years, the overall market has been largely flat, with sometimes huge swings up and down. After all, pricing is a very complex, often opaque matter. It also depends to a large extent on how many market participants are active. If you don't want to fall flat on your face, you have to know who is playing what role, how prices are created, and which brands and models are currently being made. This is similar to the art market.
What does this mean in concrete terms?
Seidl: One example: Today, in the sports car segment, we have the model years of the 1990s and 2000s as value-driving vehicles on the market. The Porsche GT 1 road version, for example, was virtually unsaleable 15 years ago. If you got 500,000 euros back then, that was wonderful. Today, such vehicles might generate 10 million euros. The only thing is that the market is shaped by a few players. Whoever is in this circle can make a great deal. If you're not, you have to watch out like hell.
What should a collector do?
Seidl: As we see it, the view of a collection must always have both: On the one hand, what constitutes passion, use, joy in collecting. But on the other hand, we also have to look at how markets, brands and car types develop. This makes forecasting increasingly difficult. It has become a complex field. I'm not saying that the markets are saturated. But they are also dependent on the overall economic situation, the financial markets and the interest rates relevant for financing.
In this situation: What do you advise your customers like Mr. Engelhorn?
Seidl: In the best case, anyone who owns the right vehicles still has an investment that retains its value. But: Whether the value increases of the last thirty years will continue in this way is not clear. Anyone who wants to tell you today with certainty what tomorrow's trends will be is a charlatan.
"In the best case, those who own the right vehicles still have an investment that retains its value. But: Whether the value increases of the last thirty years will continue in this way is not clear. Anyone who wants to tell you today with certainty what tomorrow's trends will be is a charlatan." Florian Seidl
How can security be gained in such an environment?
Seidl: The question must always be: Which objects are recognized by the market as worthy of collecting? Today, we see some insane distortions in everything that is collected. For example, sports shoes from sports stars. Ten years ago, all but a few freaks would have said, "I'll throw them away because they're worthless". Today, such 20th century collectables sometimes fetch insane prices. Many things no longer follow market logic. The only way to gain security is to think about your individual values and collection goals.
Seidl: The way we tried to do it, Mr. Engelhorn and I: Passion, use, in the end also taste, pleasure in the technical implementation, exceptional pieces, and finally, trying to have the best possible specimens of the models. The rest is subject to markets.
Kurt Engelhorn and Florian Seidl in a Porsche 550 during 1000 Miglia.
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