As we all know, the world is throwing out some pretty unusual curve balls right now. Whether it be operational, personnel, sales, legal and legislative, supply side, whatever, there’s virtually no way that your business or industry has not been affected by the COVID-19 pandemic. Over the last several days, we have reached out and had fairly lengthy conversations with every single one of our clients and at the time of barking this into my mobile device at 10,000 miles per hour, I’m very grateful to report that we have not lost or been furloughed completely by any of them, we are facing no layoffs, we are 100% work from home equipped and we will not be shutting our doors in any capacity. That’s not to say that there still isn’t a fairly significant degree of anxiety out there for us and virtually everybody we work with currently, but once again it breaks down to what we all already know: We are extremely lucky to be able to play with cool cars for a living.
This of course means something completely different than what it usually does. Electing to pass over what most people normally think about when they assume they know what we do on a day-to-day basis, the thing we keep hearing the most, is the word “safe” and fortunately it keeps coming up from different places. Although, we all certainly do have reasons to be nervous considering the situation, here is a couple of reasons why we should all once again be very grateful that we are in the collector car business.
Collector Cars are Traditionally Financially Safe
During times of economic downturn, collector cars traditionally preform very well. They tend to be far less volatile and much less prone to extreme swings, than things like the stock market during bear years. Additionally, they also offer a level of comfort associated with tangible goods that is to a large degree undeniable. Want proof? Reference basically everything from 2007 to 2014 and what things like Musclecars did in the early 2000’s following 9/11 and the altered demand curves therein and what that provided for investors. Of course, this is not anything that should be considered foolproof. There are certain segments of the marketplace I would recommend nobody the venture into right now. However, if you stick with bread and butter, entry level or easily forecasted up and coming segments, collector cars are a pretty safe place to put your money when everything else is going crazy.
It’s Easy to Buy, Sell and Restore from the Safety of Your Home
This should be prefaced with a bit of an asterisk. As long as vehicle transporters are allowed to operate and the mail continues to run, you can continue buy, sell and rebuild/restore collector cars and acquire what you need to do so very easily. Fortunately, as with most things that generate extreme enthusiasm, the internet and mail order have been the gateway for many years to the collector car business. Many dealers are being allowed to continue to work in a closed-door capacity and deal online and parts distributors and manufacturers are still drop shipping and sending orders through the mail. If you’re looking to sell, in most circumstances, most of the more reputable people looking to buy or help you consign, already have very safe processes and procedures of getting your car from your driveway to their showrooms or their garages in place. Additional services like Bring-a-Trailer or any of the auction houses that are currently transitioning to online events simplify this even beyond that. This is great news for companies who have kept up with modern buying preferences and already have the means in place to accommodate. Couple this with the fact that people are largely contained and without traditional entertainment methods like restaurants, sports and so on available, this may be the easiest time in recent memory to reach your customer base directly and open dialogue. As complicated as this situation is, there are businesses that will thrive in this environment and the collector car business to a certain degree, is already equipped for things like this. Additionally, a larger percentage of people invested in it are more financially secure that in most other industries, which means they can afford to keep playing.
In Many Places the Collector Car Business Has Been Deemed Essential.
At the time of putting this together, and to my knowledge, only one of our nearly 50 clients has actually been shut all the way down by a municipality. Although it is recommended that you check your local laws and keep track of daily announcements from state and local authorities, we’re seeing a lot of collector car-based businesses fall into the loophole of essential and many automotive based businesses are being deemed as such. This means in many cases you can stay open. Of course, in every organization, people are the greatest asset and by no means does this mean you should put your team at risk, but if you are in an area where you can follow proper social distancing procedures, it seems that right now, it makes a lot of sense to stay open, keep your people fed and keep things moving forward, at least to the best of your abilities.
Collector Cars Offer a Safe Escape and Low Risk Source of Entertainment
There are going to be economic consequences from this, I don’t think anybody is debating that. However, if you can take advantage of favorable conditions while this is going on, your recovery will certainly be quicker. We feel this especially holds true for large-scale internet dealers and parts manufacturers and distributors with available stock on hand. Again, there’s no sports, no restaurants and very little new entertainment being broadcast, so at some point, people are going to begin to seek ways to wedge themselves away from the social and streaming platforms. Fact is, it’s very difficult to contract things like COVID-19 while engaging in activities like restoring, working on/maintaining or taking short drives in your collector car and if you have something sitting in the corner of the garage, under a cover, that you haven’t had the time to finish, it’s probably starting to look like a good time to push that project from the maybe next weekend file, to the now’s the time file. As recently stated by a gentleman named Axel Catton in a Iso/Bizzarrini group I follow on Facebook:
Avoid crowded spaces – Drive your collector car
Keep a safe distance from others – Drive your collector car
Do not use public transport – Drive your collector car
Expose yourself to sunshine – Drive your collector car
Avoid circulated air – Drive your collector car
Stay home from work – Drive your collector car
Maintain a positive and prudent attitude – Drive your collector car
This general type of thinking isn’t only spent on those helping to repair and keep collector cars on the road, but also to dealers. There is a strong potential to take advantage of bored impulse buyers looking for new toys here as well. If you have developed your digital channels thoroughly enough, chances are if you’ve got a small block ’72 El Camino or something similar sitting around and you put it out there, somebody is going to say to themselves “You know, I’ve always wanted one of those and I got nothing better to do, sooooooo….”. The audience is there right now, and they have free time. Are you capable of staying in front of them?
Sure-Fire Outlets for Pent-Up Demand are Coming
As with most “lifestyle” types of hobbies, there is a pretty heavy event/activity component to collector cars. Of course, we know how badly events companies and promoters are being hit right now, but many of the major ones are rescheduling vs cancelling. This means once the smoke clears on this, every weekend for quite a while is going to be like Superbowl Sunday, if you love cool cars. Should you expect a complete and immediate recovery here? Of course not. It is absolutely going to take a while for everybody to get their feet back under them and restaurants, bars and sporting events will probably see the initial benefits of any immediate pent-up demand scenarios first. However, people will want to see their friends and engage in their passions again pretty early after the leash comes off, they will spent or borrow the money to do so and that should lead to a lessening of any long-term impact felt across the collector car business.
Again, I don’t want to pretend like this isn’t a terrible thing that’s happening and that it’s not very scary in both the long and the short term, but compared to a lot of the other little corners in the economic stratosphere, were in a much safer place than most.
PLEASE, everybody be careful, remain vigilant and stay safe!
Darin Roberge is CEO of Motorwerks Marketing and is a Marketing and Media Consultant in the Specialty Automotive and Live Events industries. Darin has been named a Business Trendsetter by Arizona Foothills Magazine, is a two-time nominee to Phoenix Business Journal’s 40 Under 40 list and is one of Sports Car Market Magazine’s 40 Under 40. Learn more about Darin at www.MotorwerksMarketing.com