Classic car market and tarriffs

[NC-car-guy]

Ok,  I debated with myself about whether to post this.  I'm going to risk it and I ask that the discussion stay focused on the topic and not stray into politics.  I am curious if anyone else had heard about the possibility of these tariffs hitting our hobby.  Not real concerned in the fist part of the article talking about millionaire buyers, but the second half talking about the hobbyists.  How many of our aftermarket parts are imported?  How many out of that might fall victim to additional tariffs? Thanks in advance for your maturity and etiquette.

 

https://www.cbsnews.com/news/the-classic-car-industry-braces-for-a-trump-tariff-crash/

Edited August 8, 2018 by wndsofchng06 (see edit history)

[old-tank]

You are going to get a lot of "I think" "I don't think" here.

Most of the parts that would affect us are made in China and they are already highly marked up:  $4 mirror is now $5 for a Buick parts supplier who is already charging $60.

[auburnseeker]

Good time to stop buying the aftermarket stuff and buy NOS.  Though as mentioned " I think" the markup is going to be nominal, unless the suppliers decide to gouge a bit more and blame it on the tarriff.  Kind of like gas at the pump goes up the day it something affects supply three weeks down the road,  but doesn't go down until the cheaper gas has actually been pumped into the stations tanks. 

I wonder with cars they say the price is going to skyrocket on them because steel is going up.  How much raw steel is in a car as far as cost?  And how much will that go up?  I'm sure with the ripple affect, If it costs Ford or any other manufacture an extra 200 for materials the price of the car will go up 3 to 4 grand.   Good way to increase profit without looking greedy. 

[Matt Harwood]

I am seeing more European buyers buying cars now because they believe they will not be able to import them in the future, which concerns me a bit (10-15% of my cars sell overseas). That is not likely due to US tariffs, but due to the retaliatory tariffs that their own countries will be imposing on goods coming from the US. If you deal overseas, you will probably be affected by this somehow even if you don't think your industry is directly related to the tariffs on raw goods. There's always a chain effect with unintended consequences. 

 

The price of scrap steel will go up which means a lot more cars are going to be taken out of circulation and people with old parts (like the kids of guys with barns full of rusty stuff) will do less work to find those parts homes and just sell them as scrap. Is that a problem we should think about? Maybe.

 

People forget that trade isn't a one-way street. It isn't only that things are going to get more expensive as the tariffs raise prices, but also that things we make won't be sold in international markets and that's going to kill jobs and slow our economy. Any of you notice that China just decided not to buy any more US oil and will only be buying it from place like Iran and Russia now? What does that mean? I don't know. But it can't be good, because not buying oil from those two places was pretty much the only leverage we had against them.

 

Whatever. Not political. I won't make any more comments not matter how kooky this discussion gets.

 

 

[Ben Bruce aka First Born]

I am on board with Willie. I think..  Probably will not affect most of us.   MAYBE encourage some of the "suppliers" to produce here at home?

 

  We shall see.

 

  Ben

[NC-car-guy]

These are great responses. Willie, I'd not considered how much they already mark stuff up.  Matt, I'd not thought of scrap prices and it's implication.

 

Auburn and Ben, I currently work in automotive manufacturing. We produce 40% of the global market's drive shafts. We have had to do a lot of shuffling and negotions in preparation for the tariffs, our material cost has gone up significantly, but the bigger issue is we only have some processes in some countries. A part may cross more than one border before its complete and the paperwork burden can be excruciating to be sure we aren't taxed to get our own stuff back.

Edited August 8, 2018 by wndsofchng06 (see edit history)

[Beemon]

1 hour ago, auburnseeker said:

Good time to stop buying the aftermarket stuff and buy NOS.

 

But, only if it's still available and affordable and in good condition. The well dries up eventually. 

[auburnseeker]

One thing to remember with stuff like food and oil.  There is only so much in the supply chain and not much of it goes unused,  so if China stops buying our exports of those materials,  then they are going to buy someone else's imports,  thus making that 3rd party country shop for a different supplier.  Guess who comes up as the supplier with product in hand to feed or fuel your country.  (yup the USA). so it will be bought and probably for not much less if any less than China would have paid for it. 

On the car side I would actually worry more about countries implementing things like Australia did with the Asbestos thing pretty much haulting the cars being imported into other countries,  except maybe the true higher Echelon cars where hte owner will pay to have those items removed before export,  like brakes and Clutch etc.

It might be a global economy (pretty much has been since world war II) but we are one of the biggest consumer of the more expensive stuff where the profit really lies.  No one wants us to take all our money and leave the table.

 

With NOS parts,  there are actually a big supply of NOS service parts in the system sitting on shelves because it isn]t worth the guys time to prep a 20.00 wheel cylinder for sale much less ID it if no one is looking because they buy from a big supplier that is importing from China.  Maybe if the price comes up on them and people start shopping for parts other than from a big supplier,  they will get dusted off and brought out into circulation.  With ebay (as much indigestion I get selling on there) and the rest of the web there is alot of stuff available you just need to be ready to really search for it. 

Only time will tell,  but it's time to start down a path to keep from hemridging money and technology from this country. 

 

I was at a zoo with the family and was surprised to read on a plaque that the USA takes care of, through efforts and financially , 60 percent of the effort to conserve animal species around the world.  But wait our country doesn't even account for 10 percent of the land mass on the planet.

Seems we are doing this with everything.  We can't keep taking care of the whole world and being treated like the black sheep in return. 

 

If anyone doesn't think there were tarriffs on our goods to start with you would be surprised how crazy one sided it has been.  From European and South American countries to just about everywhere else in the world I ship.   I suspect Mexico may have some pretty good tarrifs as well,  since in 10 years of selling NOS parts for just about any type of car you can imagine,  including many service type parts,  I shipped to Mexico maybe once a year and I think it was the same guy.  You can't tell me there wasn't a need for our vintage parts down there.  There is some other force keeping them from buying from North of the Border if not tarriffs. 

Edited August 8, 2018 by auburnseeker (see edit history)

[Bhigdog]

Seems like the sky's falling with some regularity of late. There's always some new thing bringing life as we know it to an end. For 99 %  of us old cars are a hobby. If a part you buy maybe once in a blue moon costs $5 more (or less) who cares? Got better things to grouse about. .................Bob

[NC-car-guy]

2 hours ago, Bhigdog said:

Seems like the sky's falling with some regularity of late. There's always some new thing bringing life as we know it to an end. For 99 %  of us old cars are a hobby. If a part you buy maybe once in a blue moon costs $5 more (or less) who cares? Got better things to grouse about. .................Bob

Right, but if you're considering a resto, if parts go up 5% eh, 10% hmm, 15% uh oh, 20% not doing it.  Especially when you look at cars that already don't hold great value.  If parts go up 20% (not saying they will, just an example) I would have to rethink finishing my century.

[60FlatTop]

Could be similar to the 2012 tariff on Asian tires:

https://www.washingtonpost.com/news/wonk/wp/2012/10/23/how-obamas-tire-tariffs-have-hurt-consumers/?utm_term=.6dd45d76003b

 

Ooops. HE didn't really do that, did HE.

 

Bernie

[Ben Bruce aka First Born]

39 minutes ago, wndsofchng06 said:

Right, but if you're considering a resto, if parts go up 5% eh, 10% hmm, 15% uh oh, 20% not doing it.  Especially when you look at cars that already don't hold great value.  If parts go up 20% (not saying they will, just an example) I would have to rethink finishing my century.

 

 The total price should not go up the amount of the increase in tariff.    For instance,  I just replaced a seal in my transmission.  Of course it came from overseas.  Price , to me, from a vendor, was just over $12.00.   I researched the name and number ON THE SEAL and came up with a  Web site for the overseas company with prices.   Just over $1.00 when bought in lots of 100.  The tariff increase to the vendor should be on the $1.00, NOT the $12.00. So $0.25 per unit. Even if the tariff was 100%, the vendor is still making good money.

 Am I right?

 

  Ben

[Bhigdog]

2 hours ago, wndsofchng06 said:

Right, but if you're considering a resto, if parts go up 5% eh, 10% hmm, 15% uh oh, 20% not doing it.  Especially when you look at cars that already don't hold great value.  If parts go up 20% (not saying they will, just an example) I would have to rethink finishing my century.

 

The absolutely smallest part of any restoration is the cost of "NORS" parts which may or may not be imported. If farming out the restoration the labor will be far far and away the biggest cost. Even if doing the restoration yourself, when looking at 3 to 4 thousand for paint and supplies, 10 to 15 thousand for chrome, 5 grand or so for a cloth interior, coughing up an extra couple hundred for running gear parts doesn't sound like it should break the bank. Not to mention, how often are you doing this?

 

Bottom line, for the average hobbiest any tariffs are little more than a pimple on the ass of progress................Bob

Edited August 8, 2018 by Bhigdog (see edit history)

[NC-car-guy]

17 minutes ago, Ben Bruce aka First Born said:

 

 The total price should not go up the amount of the increase in tariff.    For instance,  I just replaced a seal in my transmission.  Of course it came from overseas.  Price , to me, from a vendor, was just over $12.00.   I researched the name and number ON THE SEAL and came up with a  Web site for the overseas company with prices.   Just over $1.00 when bought in lots of 100.  The tariff increase to the vendor should be on the $1.00, NOT the $12.00. So $0.25 per unit. Even if the tariff was 100%, the vendor is still making good money.

 Am I right?

 

  Ben

On high margin, pass- through parts, yes.  At work, our raw material cost is going up ~ $1 million  a year due to new tarriffs. Then since some processes happen in different countries we set up a 3rd party warehouse to avoid tarriffs on parts that we already "owned".  We then pass that cost on to Ford, GM etc, who then passes on to the car buyer. This is new cars of course, but realistically if not many of our old car parts are imported and those that are imported are low value, it might not be a big hit to hobbyists

[60FlatTop]

If a person really likes cars and has enough money to own one or more as "toys", the hobby has been adaptable enough for them to enjoy participation at every level.

 

Adaptations due to the dogmas of the hobby have caused more change than any tariff can. There is a tread going on the Simplex car. I noticed the pictures are all open cars. When the cars were 35 years old in the beginning of the '60's the influential mavins of the time wouldn't take a second look at a closed car. Where did they end up?

 

Even today the age of a car can block a hobbyists fulfillment. One can buy a stunning example of a well maintained 15 year old special car. Again, a grunt and a snort and "Why did you come with this?" Ten years pass and it is "Oh, those were great cars." That is the stuff that is much more damaging than any tariff.

 

Wealthy people own hobby cars, not rich, but people whom have more than the minimum. That's wealth.

 

Tariffs will probably increase discretionary spending in the long run. Look at then as a counter attack on the destruction of the southern US furniture manufacturing. An economic war may be painful, but at least there won't be tanks driving through my back yard.

 

If a person really likes cars they will do just fine.

Bernie

[auburnseeker]

5 hours ago, wndsofchng06 said:

On high margin, pass- through parts, yes.  At work, our raw material cost is going up ~ $1 million  a year due to new tarriffs. Then since some processes happen in different countries we set up a 3rd party warehouse to avoid tarriffs on parts that we already "owned".  We then pass that cost on to Ford, GM etc, who then passes on to the car buyer. This is new cars of course, but realistically if not many of our old car parts are imported and those that are imported are low value, it might not be a big hit to hobbyists

Your raw material cost is going up by 1 million but how many parts does that raw material make?  if it's hundreds of thousands then the increase is relatively small.  Now if you only turn out 1000 parts,  that makes a big difference.  Scale is important to get a handle on just how this affects production costs. 

Edited August 9, 2018 by auburnseeker (see edit history)

[Pilgrim65]

had an emailed this subject  from a great friendly guy Alex  at West Coast Shipping , who I used to bring Ruby to uk.

lots of Europeans buy their classics in the US and the worry is that any import tax hike in US ,will be retaliated by a similar hike over here that could have serious consequences, make you think twice if say 25% added to costs , and result in less sales which will affect US and the resto businesses and hobbyist over here .

[NC-car-guy]

5 hours ago, auburnseeker said:

Your raw material cost is going up by 1 million but how many parts does that raw material make?  if it's hundreds of thousands then the increase is relatively small.  Now if you only turn out 1000 parts,  that makes a big difference.  Scale is important to get a handle on just how this affects production costs. 

Thats correct. Hence the avg. Cost of a new car will increase about $4k over all parts

[Dynaflash8]

Seems like a whole more worry and discussion about parts than is warranted to me.  If another antique car is never sold outside of the USA that would make me happy, personally.  I'm not in the business of selling antique cars, and I can see how that concerns those who are.  But, my gut aches every time an old car leaves the country, especially one that I've owned.  That said, would I sell one of my cars to somebody outside of the USA?  Well, a local dealer sold one for me and I was glad to see it go anywhere it could.  So, what can I say on that subject?  Somebody said "You do what you have to do."

 

As far as NOS parts being available, maybe if you're talking late model cars the writer was correct that many are sitting on shelves.  I have one such car but it is certainly only functional when I need A/C and want to drive some old car a little further from home.  For the pre-War cars I do cherish, NOS parts have virtually disappeared.  One dealer who had scads of Buick parts for pre-War Buicks 15 years ago had virtually none available today.  Maybe one of this or one of that in mechanical parts, but no trim parts at all.   But, when you turn to reproduction trim parts made outside of the USA , half of the time they don't fit or fit poorly.  Bottom line is, if the price goes up for overseas reproduction parts, maybe some small companies in the USA would be willing to set up and produce parts inside of the USA?  And that would be a good thing.

 

The way I feel is that my forebears on my father's side came over here in the late 1600's and on my mother's side sometime in the late 1800's and my family didn't leave anything over there.  Now watch everybody come down on me.

[auburnseeker]

Well one thing with cost and price.  It cost X number of dollars to make and the profit comes in at how you price it above that.  Profits may have to come down a tad,  as you can only jack the price up to the point where people will not pay it.  Then price will come down, people will buy , profit might be a tad lower but merchandise will still move.  It will find a flow point that works.  As mentioned , some manufacturing may shift back to the states especially if using all new machinery they use more robots so less workers to build the stuff,  but you will still have more workers being employed than they are now.  If nobody here makes something that someone finally sees a way to and turn a profit any person they hire, building they build,  or support crew (deliveries to and from,  even a new restaurant  that opens up in that town or whatever because of an increase in demand as workers get hired is all a step in the right direction. 

Look at how big small towns sometimes get even when the business that opens isn't that huge or employ alot of people.  It's a ripple affect.   If you never have the drop in the pond to make the ripple though, you will never see it happen.  

 

 

Still lots of NOS and nice used parts out their for lots of cars even in the 30's. I know of some 37-38 Buick stuff now that I bought half of but the guy is just really hard to pin down to buy the second half.  Parts stashes are being uncovered daily as hoarders are passing on and estates are being liquidated.  Even if scrap steel goes up, alot of the good stuff won't get scrapped.  With all the TV shows including pickers showing every body how valuable that pile of rust is,  few are just turning a blind eye and throwing out anything,  Most have stars in their eyes when it comes to how valuable this stuff is.  I've bought a bunch of parts loads and liquidated them.  Lots more out there people are sitting on that they want phone numbers for.  Look on ebay there is a huge Ford one out west I believe NOS parts.  There is another I know of in a trailer body and it's a lot of stuff but the guy is very flaky to deal with and it was too far away top buy sight unseen and get trucked here.  (I worked on it for a year and finally gave up when he just couldn't produce enough information on what I was getting). It was the stock from 4 dealer's that he ended up with combined into one then built a new dealership and these were the contents of the 4 old dealerships.  He knew them well because he was the parts manager for years before working up to actually owning the dealership.   Definitely not a scam artist,  just flaky.  He sent me back my deposit a year later with 10 percent interest for the time he had it and he's the one that insisted on that.  All that's getting thrown out,  probably should have been tossed years ago.  A few good things will probably get tossed but that's happened regardless of the price of scrap since World War II

[NC-car-guy]

 

2 hours ago, Dynaflash8 said:

if the price goes up for overseas reproduction parts, maybe some small companies in the USA would be willing to set up and produce parts inside of the USA?  And that would be a good thing.

I'd like to see this... 

[Pilgrim65]

2 hours ago, Dynaflash8 said:

Seems like a whole more worry and discussion about parts than is warranted to me.  If another antique car is never sold outside of the USA that would make me happy, personally.  I'm not in the business of selling antique cars, and I can see how that concerns those who are.  But, my gut aches every time an old car leaves the country, especially one that I've owned.  That said, would I sell one of my cars to somebody outside of the USA?  Well, a local dealer sold one for me and I was glad to see it go anywhere it could.  So, what can I say on that subject?  Somebody said "You do what you have to do."

 

As far as NOS parts being available, maybe if you're talking late model cars the writer was correct that many are sitting on shelves.  I have one such car but it is certainly only functional when I need A/C and want to drive some old car a little further from home.  For the pre-War cars I do cherish, NOS parts have virtually disappeared.  One dealer who had scads of Buick parts for pre-War Buicks 15 years ago had virtually none available today.  Maybe one of this or one of that in mechanical parts, but no trim parts at all.   But, when you turn to reproduction trim parts made outside of the USA , half of the time they don't fit or fit poorly.  Bottom line is, if the price goes up for overseas reproduction parts, maybe some small companies in the USA would be willing to set up and produce parts inside of the USA?  And that would be a good thing.

 

The way I feel is that my forebears on my father's side came over here in the late 1600's and on my mother's side sometime in the late 1800's and my family didn't leave anything over there.  Now watch everybody come down on me.

I apologise for taking one of your old cars out of the US , but you should be happy because if your forebears came from over here I may be a relative ?

Edited August 9, 2018 by Pilgrim65 (see edit history)

[Dynaflash8]

35 minutes ago, Pilgrim65 said:

I apologise for taking one of your old cars out of the US , but you should be happy because if your forebears came from over here I may be a relative ?

You took one of MY old cars overseas?  That had to be a 1939 Buick that a local dealer sold for me and sent to Germany.  One other car that I sold locally ended up being taken to an auction by the guy who bought it from me and a dealer bought it at the auction and sold it to somebody in Spain.  That was a nice old 1935 Buick Series 40 and I do grieve some over the loss of that car here.  If it were still in the USA I might have bought it back some day.....I've been known to do that before......once (1939 Buick 41-C convertible sedan) and I'd do it again for a '41 Buick Limited if I could, which I can't.

[Pilgrim65]

23 minutes ago, Dynaflash8 said:

You took one of MY old cars overseas?  That had to be a 1939 Buick that a local dealer sold for me and sent to Germany.  One other car that I sold locally ended up being taken to an auction by the guy who bought it from me and a dealer bought it at the auction and sold it to somebody in Spain.  That was a nice old 1935 Buick Series 40 and I do grieve some over the loss of that car here.  If it were still in the USA I might have bought it back some day.....I've been known to do that before......once (1939 Buick 41-C convertible sedan) and I'd do it again for a '41 Buick Limited if I could, which I can't.

 

23 minutes ago, Dynaflash8 said:

You took one of MY old cars overseas?  That had to be a 1939 Buick that a local dealer sold for me and sent to Germany.  One other car that I sold locally ended up being taken to an auction by the guy who bought it from me and a dealer bought it at the auction and sold it to somebody in Spain.  That was a nice old 1935 Buick Series 40 and I do grieve some over the loss of that car here.  If it were still in the USA I might have bought it back some day.....I've been known to do that before......once (1939 Buick 41-C convertible sedan) and I'd do it again for a '41 Buick Limited if I could, which I can't.

A

 

23 minutes ago, Dynaflash8 said:

You took one of MY old cars overseas?  That had to be a 1939 Buick that a local dealer sold for me and sent to Germany.  One other car that I sold locally ended up being taken to an auction by the guy who bought it from me and a dealer bought it at the auction and sold it to somebody in Spain.  That was a nice old 1935 Buick Series 40 and I do grieve some over the loss of that car here.  If it were still in the USA I might have bought it back some day.....I've been known to do that before......once (1939 Buick 41-C convertible sedan) and I'd do it again for a '41 Buick Limited if I could, which I can't.

Afraid ment in the general sense car being an American Buick convertible, would loved to have the one you sold 1939 Buick , but sadly not me 

Edited August 9, 2018 by Pilgrim65 (see edit history)