Home Automotive News Are These The Factors Of The Rising JDM Prices?

Are These The Factors Of The Rising JDM Prices?

Earlier today, we wrote an article about how the internet may have potentially ruined the market for JDM cars with skyrocketed prices, especially for the actual enthusiasts. Though it may be true in certain aspects, it was more of a shallow and vague rant rather than a factual article. So, let’s look at it from the latter’s perspective.

Let’s put it out on the table that yes, the internet has played a big factor in causing the skyrocketed prices. However, it isn’t a determining factor that caused the surge in prices anyway. There’s a larger global factor on why this has happened in the first place and also what is the possible outcome for all of this.

Speculation

We believe that speculation is the biggest part of the reason why JDM prices are blown way out of proportion. The market thrives on speculating the US importation laws. In case you are not aware of the USA’s “25-Year Import Rule”, the US government only allows the import of cars not sold in the US after the car’s age has reached 25 years old.

So due to this known law, people start acquiring these cars way before the US even allows it, storing them in Japan or elsewhere and shipping them into the states once they are legal. This was made apparent after the legalisation of the earlier batches of the R32 into the US.

People have been observing the prices of R32s when the US allowed it to be imported in. However, some forgot that once people realize that it is pretty easy to get their hands on the R32 directly from Japan, the price starts to go down and stabilize itself. 

We could expect this to happen with the R34 as well. Unlikely that it would ever go back down to the RM2xxk mark but it will unlikely stabilize around the RM55xk mark either. 

Air-Cooled Porsches

Here is also another large factor that we believe contributed to the skyrocket pricing. Though we’re not blaming Porsche for making the 911, we’re blaming the fanatics and enthusiasts or “Porschephiles” who overhyped these old cars.

Because of these “Porschephiles”, people started to see cars as an investment opportunity rather than a hobby. Yes, special edition cars like the GT-line or RS-line can fetch higher values but the run-of-the-mill 911? Who in their right frame of mind would want to hoard and flip for fortune?

Also, might as well blame RWB too for triggering the movement to ‘save’ air-cooled Porsches when there is literally nothing to be saved as these old cars were manufactured in mass numbers. 

It’s not helping that the newer gens of Porsches are also falling victim in this flip for fortune scheme. People secure allocation and immediately sell to other buyers. People would rather buy cars as investment than stocks and properties because more often than not, you make money out of thin air and the return is way higher and faster than the property market! 

Bonus point, in between the buy and sell period, you could at least parade around in it. Unlike property where you can’t show off much. As the saying goes, you can sleep in a car but you can’t race a house. 

Scarcity of Parts

This should go without saying as the older your car gets, parts will most likely be hard to come by. These old cars are prone to breaking, especially in the “wear-and-tear” department. 

So logically, any rational owner would need to replace the damaged parts to elongate their life, to which, equates to value, and this is a normally accepted practice in accounting. Basic principle. 

So when these cars are restored no matter to what extent, they indeed increase in value as well. 

The Cars Themselves Are Hard To Come By

This is also a basic economic concept. When supply is lower than the demand, it is only logical for the price to go up. This does not apply to JDMs only. This has been happening to the supercars and euro cars even before the JDM is being hit with it. 

Just look at some of the much rare supercars compared to the normal mass produced ones. They retain value much better, most of it even higher than newer and more powerful breeds of supercars. Yes, some of it has racing pedigree but some of these JDMs also have rich racing history. 

Why do we hate to see them fetch a high price but we normalize the supercars getting much better appreciation? The Ferrari 250 GTO only produced about 300hp but why are we just “okay” with it being history’s most expensive car ever sold? Even the current generation Honda Civic Type R is way more powerful than that.

Companies Like Nismo

Nissan knows that people buy their Nismo products. Even though these parts are all just reproduced parts from 20 to 30 years ago with no significant value other than that “Nismo” badge. It’s a cash cow for them which they won’t ever let go.

This didn’t help when Nissan/Nismo introduced the restoration program for the Skyline which shoots the price up to a different atmosphere altogether. Allowing flippers to justify the high resale price of these cars despite their cars being nowhere near the quality of being restored by Nismo.

The Pandemic Happened

COVID-19 may also be the biggest factor that we can relate with currently. People are locked in their homes, with nowhere to go. So they are shifting their money towards something that can satisfy them instead of hoarding an unreasonable amount of cash.

Are Stable Prices On The Horizon?

Honestly, one can only hope for a time where prices are stable and be in reach to people who are actually enthusiasts of these cars. Even then, it’ll undoubtedly still be expensive. Though some manufacturers have stepped in to attempt balancing out the prices.

One manufacturer being Toyota, who are already reproducing parts for the A70 and A80 Supra. With this intervention, parts are less scarce now which hopefully will aid with the cost of maintaining and restoring a unit. 

As for Porsche, it is believed that they are also doing it to stop people from flipping their cars instantly. The same goes for Ferrari with their limited-production hypercars. Though it may be difficult for Japanese manufacturers to implement this exclusive-style of purchasing cars since most of their cars are mass produced.

And at the end of the day, an intervention is required and maybe that is one of many ways to do it. As an enthusiast, we can only hope for better days.