The vintage car, a business at your fingertips?

Last updated:

Updated on 18 September 2020

Since the industrial revolution, the automobile has transformed transport and, with it, the daily lives of millions or even billions of people on Earth. After the appearance of Ford in 1914, its production exploded during the Glorious Thirty and has continued ever since. In particular, the car has revolutionized traffic and economic exchanges. It is now considered indispensable in households in developed countries. In addition to drastically improving the daily lives of individuals, it has become a veritable economic goldmine.

The automotive market, a major issue in the daily life of the French

An important economic burden for the country

The automobile is a universal market, with manufacturers and equipment manufacturers scattered all over the world.

France is a historic country of the automotive industry that continues to invest in infrastructure and innovative start-ups.

“France is the fifth largest car manufacturer in the European Union (EU), with 6.7% of European production in 2016” according to INSEE (1). The country is home to no less than 418 groups of manufacturers and equipment manufacturers. He is doing everything he can to establish himself as a major competitor in this field.

In addition to being renowned for its quality workforce, France also has a car service appreciated by customers. Indeed, the organization of large industrial groups often offers diversified subsidiaries. For example, commercial subsidiaries or well-established after-sales services are created to provide a more in-depth service than in our European neighbours. Automotive marketing in France is paramount. You have to play on aesthetics, on dreams, on desire. The car is no longer a simple means of locomotion, it has become an innovative luxury product, and in perpetual search of respect for the environment.

The car, a vector of social connection

The economics of the automotive industry are colossal. However, the car is an indispensable tool for the movements of the French. Whether these trips are professional or private, they require a means of locomotion. According to an analysis by the Ministry of Economy and Finance (2), “about 70% of French people drive to work every day”. This is a significant number that demonstrates the importance, particularly in rural and suburban areas, of owning a car to support itself.

Finally, the automobile is also an “employer” sector. Indeed, in 2016, according to the Ministry of Economy and Finance, the automotive sector at the time had 4,000 industrial companies with a total of 400,000 employees in France.

Young couple riding in a vintage vintage vintage car by the sea
As of January 1, 2018, the car fleet in France is composed of 39.5 million units, of which 32.7 million are private vehicles (84% of households) (2)

Post-confinement recovery plan for the automobile

The rise of long-term rentals

From an economic, cultural, work and employment point of view; the automotive sector must not perish. Individuals need cars to work, travel, consume. The entire economy of the country is called into question if this sector is on hold. Yet this is thechallenge that the Covid-19 crisis is launching today in France.

In view of the figures of the National Union Sesamlld, published in their bi-monthly summary, the market for Long-Term Rental (LLD) restarts following the deconfinement. It is a significant branch of the automotive market as 57.6% of company vehicles were in LLD at the month of May 2020.

The growing “green”

The general consciousness, after this crisis, has also been impacted as France observes a good growth in registrations of hybrid and electric vehicles. Indeed, it increased by almost 8% according to the National Union Sesamlld, concerning the month of May 2020. A greener consumption of French citizens is then noticeable. The French have learned from this crisis in terms of ecological and solidarity and thus continue to deepen the market of hybrids and electrics.

On the other hand, deconfine now rhymes with a recovery plan. Despite some disappointments felt by the FNA (National Automobile Federation) regarding the lack of state measures concerning the services of the automotive sector, support is still visible. An $8 billion plan to provide significant support for the purchase of new vehicles and the modernization of the industry has been lifted by the state.

This recovery plan resonates with the current trend of the French: that of moving towards the purchase of greener vehicles. This automotive sector seems to be adapting brilliantly to this post-confinement period.

Collectible cars, a business that crosses the ages

While the hybrid and electric car trend is in full line with the post-containment behaviour of its customers, what to do with the old vintage car market? Here’s the answer. In recent years, dematerialized platforms have connected owners of old vintage cars with tenants. In Bordeaux, Classic-Hub.com aims to become the digital reference in this market. This platform can depreciate the cost of maintaining owners’ vintage cars, while allowing individuals to rent a car for an occasion. One can imagine this kind of configuration during a wedding or during a filming of an advertisement for example.

According to a study carried out by the FFVE, the vintage car business is a predominantly male sector. The most used old vehicles in France date from 1970 to 1987 (3). The owners of these cars are mainly in the countryside. The use of vintage cars is mainly private, for leisure; and they are used very little to get to work. Indeed, only 2.8% of vintage car enthusiasts do so (3). It is therefore a good of the order of passion and distraction.

2CV Citroen vintage car on the streets of a city in summer
75.8% use their vintage cars for leisure. 2.8% use them for work or professional use. 21.4% use it in both cases. (3)

Between fluctuation and passion, a business of experts

In France, the used car market comprises about 800,000 vintage vehicles, according to the FFVE (French Federation of Vintage Vehicles). This represents 1.5% of the French fleet. And for good reason, the business of the collector’s car is not necessarily accessible to all. Indeed, some models are considerably expensive. For example, a 1956 Mercedes 300SL sold for almost one million euros in 2011 (5). While some annual transactions exceed one million euros worldwide, part of the vintage car market remains affordable, often equivalent to buying high-end new cars. However, it is still possible to find beautiful vintage cars at a lower price. The cost of acquiring some models can then be comparable to that of a new entry or mid-range car, i.e. between 6,000 and 25,000 euros (6). His research is done with specialized garages, then comes the time of negotiations.

Collectible cars are part of these products whose value fluctuates from year to year. Thus, while prices rose by an average of 16.8% each year between 2008 and 2016, the market experienced a period of near-stagnation in 2017 and 2018, losing 6.8% on average in 2019 (6). Nevertheless, high-end brands and models continue to grow in value. About 400% over ten years for the best performance. In addition, vintage cars benefit from a special tax regime, exempt from the tax on polluting vehicles in particular (7).

These are important parameters to take into account when purchasing an old car. The fluctuation in the price of vintage cars contributes to the fascinating appeal of this market: demand is based on abstract, sentimental, historical or symbolic criteria. We buy a vintage car for what it represents, for the time it went through or for the history it carries. It is this value that fluctuates from year to year, making its price a criterion of purchase that is never fixed.

From reason to passion for cars, a business that is anything but pragmatic

The automobile has passed through the ages. After transforming the daily lives of people around the world, it has been trying for some years to become more environmentally friendly. It is a sector of constant innovation. It is once again against the Covid-19 that the car market is being pushed around. Despite the obstacles to overcome in its path, the automobile adapts to its time and its market.

Sources

National Union Sesamlld.

National Automobile Federation

Classic-hub.com

(1) The automotive industry in France: the internationalisation of group production weighs on the trade balance, insee, from 21 November 2019:

(2) The automotive industry in France, from the Ministry of Economy and Finance, from 2018.

(3) Future of the vintage vehicle collection in France, 2017 study, of the FFVE

(4) The FFVE, more than 50 years at the service of the passion of vintage vehicles, of the FFVE

(5) Lhas collection of vintage cars: a very lucrative business,of Old Cars

(6) Interviews with AutoCollec

(7) Better Living, Collectible Automobile: What Prospects for This Passion Investment?,June 19, 2020

(8) Grey card, CO2 tax: scale of malus on used vehicles

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