As classic cars continue to show positive returns in the luxury investment market, we look at how purchasing a classic Mercedes-Benz fares against purchasing shares of Daimler AG.
Mercedes Benz is one of the most sought-after and iconic brands in the world. Officially named Mercedes-Benz in 1926 after the merger of companies Benz Cie and Daimler Motoren Gesellschaft AG with input from businessman Emil Jellinek – who sold the cars and liked to name everything after his daughter, Mercedes. In its current form, Daimler AG builds everything from cars to trucks while creating technology and offering financial lending services. Here we take a look at what has been the better investment: Daimler stock or the company’s most well-known car marque, Mercedes-Benz.
DAIMLER AG STOCK
Daimler AG is listed on the Frankfurt Stock Exchange, and the past 10 years has seen the share price drop from just over €74 (US$105.29) in October of 2007 down to the teens in 2009 and rise again to more than €94 (US$101.80) in 2015. Shares of Daimler AG currently trade at €72.74 (US$84.79). Arguably, if you had invested in 2009, then you would have done quite well. However, over 10 years, the value is actually down by around 1.7%.
Mercedes-Benz is the car marque with the fastest growing brand value in the world. The value of Mercedes-Benz cars shot up 5% from the beginning of the year to August, according to the Historic Automobile Group International (HAGI). That can be down to some very high prices paid for collectable cars at auctions.
Which model is the optimum investment choice? There are many to choose from. Here we highlight four Mercedes-Benz cars that we feel should be on your investment list, and reveal their price performance over the past 10 years. All of these models represent different eras for the manufacturer, yet at each moment dominated their respective categories.
540 K Special Roadster
Built in the 1930s, this beautiful WWII-era car was priced at around US$14,000 when new, which would be more than US$200,000 in 2017. With an 8-cylinder supercharged engine, compared to the Cadillac V16’s of the day it was considered small, however, its price was around 40% more. Due to this, only a few were sold in the US. It is one of the most beautiful Mercedes ever built and models of this car have been auctioned for as much as US$6.6 million and US$9.9 million. Values of the vehicle over the past 10 years have skyrocketed by nearly 150% based on auction data.
Perhaps the most infamous limousine to ever come from Europe, the Mercedes-Benz 600 is incredible. Known for being owned by dictators and celebrities alike, the car was way ahead of its time when built between the 1960s and ‘80s. This is because when it was built, Mercedes didn’t set a budget for the car. Engineers were basically given a blank cheque and models were fully customisable. You could find items such as bullet-proof glass on hundreds of the 2,677 built. However, the most incredible feature on all variants of this vehicle was the fact that the car didn’t have electrics, everything was powered by hydraulics. This meant the car was whisper quiet and operations like opening and closer a window could be performed at immense speed. In 1963, the car cost more than a Rolls-Royce at between US$22,000 and US$25,000 or up to a little over US$200,000 in today’s money. A fully-restored long-wheelbase Pullman model can set you back nearly US$900,000, although The Hagerty Group who insure collector cars, values the vehicle in concours-ready condition at around US$237,000. That’s an increase of 166% from around US$89,000 in 2007.
300 SL Gullwing
Arguably the most legendary classic Mercedes-Benz sports car for enthusiasts and non-enthusiasts alike. The car was built as a coupe gullwing and based off of the 300 SL race car. Produced between 1954 and 1957 and costing nearly US$9,000, the sleek beauty was actually launched in the United States before Germany due to one persistent New York City dealer and was the fastest production car on the road at the time. An immaculate example of a steel version recently sold at Monterey for US$1,485,000. However, if you are lucky enough to get hold of one of 29 Aluminium bodied Gullwings then expect to pay a fair bit more. In 2012, a 1955 example sold for US$4.2 million. The owner had paid US$57,000 for this car in 1980 (around US$170,000 in 2017 money) in its unrestored state. Even with what was most certainly hundreds of thousands spent on restoration, it still provided a good return on investment. Hagerty values some examples of the car in the US$6.9 million range, putting the increase in value over the past 10 years at around 200%.
Built in the early 1990s, the 500E is a classic within Mercedes that may offer exceptional returns in the future. From the outside, it appears to be an ordinary E class from the era, but this car was actually built by Porsche, which makes this an extremely rare collaboration between the two Stuttgart manufacturers. The car is hand built and has a whopping 5.0L V8 engine from the SL with 325 wild horses. Around 10,000 were sold worldwide, and when new it was priced at US$80,000. Today you can pick one up in good condition for under US$30,000, however a concours ready model will set you back around US$51,000. Since 2009, values have gone up 428%. Before that you could pretty much get one for free, so we wouldn’t be surprised if the 500E continues to increase in value over the coming years.
THE BOTTOM LINE
If you can afford it, a classic Mercedes-Benz in the right model could be an excellent investment. Perhaps not as stable as Daimler AG stock, but a lot more exciting with the possibility of big returns. And hell, even if it doesn’t go up in value, you can have a lot of fun with it. That’s part of the process with owning an investment “vehicle”. You’ve either got a car that could be worth something or already is or never will be, but it becomes part of the family. Try enjoying a weekend away with 10,000 shares in Daimler. We’ll see who has a better time.