Take the following financial quiz: a young couple gives birth to its first child in 2005. The grandparents donate $35,000 for the child’s college fund. The parents can best invest that fund by:
A. Putting it into an index fund.
B. Investing in blue-chip tech stocks.
C. Buying federal savings bonds.
D. Purchasing a classic muscle car.
Obviously, D is a throwaway wrong answer, right? Not so fast. Answer A certainly could pay off, though at some risk. B, like A, could earn terrific returns, none at all or lose money. C will bring modest guaranteed returns. Truth is, the potential big winner here — the hot commodity that could produce the biggest payday — is the muscle car, particularly if it is now or becomes a highly sought-after model.
One of the automotive industry’s best kept secrets — although the public is becoming more aware — is the red hot market for ’60s and ’70s era muscle cars. Barrett-Jackson Auction House reports a 1969 Camaro ZL1 could command $550,000 to $750,000, up from $250,000 in 2002. A 1965 Shelby GT350 Mustang would fetch $110,000 to $120,000, up from $55,000 two years ago. Owners of 1971 convertible Hemi Cudas say their vehicles have been appraised as high as $1 million.
Investors young and old, corporate and private, have cashed into the market. Chris Sachs, co-owner of Northeastern Auto Coach in Hudson, N.Y., and a 40-year veteran in restoration, says many investors put their money in muscle cars after watching the stock market slump in 2000. “I know one guy who got rid of his stocks and now owns a garage with seven muscle cars,” says Sachs.
Bear markets aside, one central factor has driven the muscle market for almost 20 years: the car owners themselves. Jim Spoonhower, vice president of market research for the Specialty Equipment Market Association (SEMA), describes the average muscle car owner as male, early 40s with income in the high $50,000s. Translation: the majority of buyers are the product of the latter part of the baby boom, dropping their disposable income into cars from their childhood.
The heavy involvement of baby boomers begs one very large question. Of all the cars to pursue, why buy short-lived, gas-guzzling coupes with reputations as public nuisances — cars essentially outlawed out of existence? Answering that is the key to understanding the muscle industry and the $3 billion aftermarket that grows an average 4 percent per annum to support it. The first step in solving this riddle entails understanding the remarkable, intertwined histories of both car and owner.
Prologue to the muscle era
You might say it all began with heroes. In 1945, after almost a decade of conflict, peace broke out on both the European and Asian continents. So began the grand exodus of American soldiers, sailors and air personnel. From bases and camps in far corners of the nation and the world, they loaded buses, trains, planes and troopships, beginning the last leg of an adventure that would take them to the most important place on earth — home. Uncertainty and separation from loved ones, along with the nightmare of war, magnified the need for comfort in family — along with a calling to a simpler life.
When the troops did make it back, home and family became a national obsession. The year 1946 recorded an astounding 3.4 million births. For the next 18 years, the birth rate continued to skyrocket. By the end of the baby boom in 1964, America had added an astounding 75.8 million children. So great was this boom that by 1970, fully 52 percent of the U.S. population was under 30.
Marketing professionals had an entirely new demographic to cater to. Corporate America geared up to attract this exploding demographic. Companies soon were producing an array of clothes, music, movies and television shows aimed solely at the young. Even button-down, conservative Detroit was beginning to take notice.
GTO hits the scene
Such notice was at first slow. American car companies had survived for decades by appealing to an older, practical-minded buying segment. Detroit did offer a limited number of sporty coupes attractive to younger buyers, but priced well outside most drivers’ budgets. Detroit’s hand, however, was about to be forced. Automotive writer Mike Mueller notes that in the early 1960s, two powerful, growing movements eventually diverged to compel automakers to produce a new line of cars aimed squarely at youthful buyers.
The first was the growing popularity of America’s hot rod culture and love for speed. In the 1950s, young motorists helped build a billion-dollar aftermarket parts industry to increase horsepower and rejuvenate the 1930 and ’40s era cars they were able to rescue from salvage yards and used car lots. Starting in the late ’50s, popular music and movies both began paying tribute to these vehicles.
At the same time, Detroit was investing heavily in the racing scene. Racing technology began showing up in production vehicles. Most notably, GM began placing small V-8 engines in its LeMans coupes. Meanwhile, its upstart Pontiac division had something even more revolutionary in mind, a product that would mark 1964 as the dawn of the muscle car era.
To anyone familiar with the auto industry, 1964 immediately calls to mind the introduction of the Mustang. Indeed, the Mustang was Ford’s, and specifically Lee Iacocca’s, gift to the baby boom youth. Practical, sporty and featuring a base six-cylinder engine, the car immediately caught the nation’s attention. Down the street, Pontiac released the first true muscle car, the 1964 GTO (nicknamed the Goat), sporting a Tri-Sport engine and belting out 389 horses of power.
In its first year, Ford sold more than 400,000 Mustangs, easily eclipsing the 32,400 units snapped up by GTO buyers (production was limited its first year). More significantly, Detroit had taken note of both sales figures. The boomer generation had spoken; it wanted something the old man wouldn’t drive.
Given these two examples, manufacturers could either put development dollars in their own pony car, like the Mustang, or follow Pontiac’s lead and wedge an oversized racing engine into a common mid-size frame. Pure economics spoke. Muscle cars would roll off assembly lines.
Before 1964 was over, Chevrolet produced its first Chevelle SS. In the years that followed, Mustang itself would get into the muscle car act with its Cobras, GTs and other fire-breathing models. Dodge would deliver the Charger, Challenger, Plymouth and the much loved Hemi-powered Barracuda — or “Cuda” as it came to be called. With them would roll out Novas, Camaros, Trans Ams, Road Runners and a host of other models.
For the 10 years following 1964, engineers found new ways to deliver even higher engine outputs. Horsepower charged ahead, breaking one barrier after another. Detroit had effectively built a vehicle fleet equally at home on highways and racetracks. An adoring public, almost exclusively young and male, couldn’t get enough.
Young motorists at last had a vehicle that was everything they were or wanted to be — noisy, obnoxious, antisocial and irresponsible. Considering the counterculture movement of the ’60s and early ’70s, muscle cars arguably were the perfect cars for the time. They were overpowered, danger-packing outlaws — renegades that frightened parents and other upstanding citizens.
With each passing year, their power and legend grew. Hollywood eventually tapped into their icon status. In 1968, Steve McQueen raced a Mustang GT in “Bullitt.” International bad boy James Bond led local law enforcement on a merry, destructive chase in a 1971 Mustang Cobra in “Diamonds are Forever.” Just as their star was reaching its zenith, however, muscle cars were quickly turning into a dying breed.
Early death produces immortality
Beginning in the mid-1960s, state and federal legislators passed emission control laws that effectively would put the clamps on high compression engines. At the same time, safety advocates and Congress began taking notice of the lethal combination that impassioned youth and unbridled horsepower were producing. Legislators began looking to make the nation’s roads safer, and muscle cars took the brunt of their complaints.
Insurance adjusters similarly took note, raising premiums to stratospheric levels. In 1967, a young male under 25 with a clean driving record would have paid $700 a year for GTO coverage. Finally, in 1973 the Middle East oil embargo cut gasoline supplies, raising pump prices and putting the proverbial nail in the muscle car coffin.
Detroit quickly backed away from muscle car production, extinguishing most models — or at least their engines — by 1974. For manufacturers, it was an easy goodbye. Muscle cars only accounted for about 10 percent of Detroit’s business from 1964 to 1974. Manufacturers needed more practical vehicles better suited to cash-strapped youths — namely inexpensive, gas sipping compacts young buyers snapped up as eagerly as they turned to Asian imports.
Eventually, like most youthful pursuits, the entire muscle car era seemed a bit silly. In retrospect, the cars seemed downright cartoonish. Who really needed that much power? Weren’t racecars better suited for the racetrack? How much freedom could be delivered by a vehicle whose insurance costs tied the working class to a factory press for double-shifts? As the muscle breed died, the rest of America — an older, mature, more practical America — seemed to say, “I told you so.”
Ironically, an early death actually saved these cars. Rich Saccone, owner of Flashback Unlimited, a restoration shop in Akron, Ohio, says, “They don’t make them anymore,” explaining the resilient popularity of muscle cars. When Detroit ended their production, fans hoarded the cars, stashing them in garages, shops and barns, setting the stage for an industry dedicated to preserving the heroes of their youth.
Making the cars even more attractive, they had the good fortune to say goodbye while they were still young, brash and popular. They didn’t suffer the indignities of living past their prime.
For the next 14 years, regardless of their disappearance from the new car scene, muscle cars remained close to the public’s hearts and minds. Muscle car races and shows proved popular venues throughout the 1970s. In the early and mid-1980s, no television star was hotter than the General Lee, a suped-up ’69 Dodge Charger that regularly received more fan mail than its less impressive “Dukes of Hazzard” costars.
By 1988, muscle cars were ready for a return. Sachs says that year marked a striking upturn in the muscle restoration business. The children of the first wave of boomers were leaving college and starting their own lives. Suddenly, mom and dad boomer were left with a lot more disposable income. Quite often, that money promptly went into the hands of muscle car restorers.
Boomers preserve the past
If there was one image to define the muscle car era, it had to be that of 10 teenagers surrounding a muscle car, enviously looking on as the lucky owner described how he was going to customize his prized ride. In 1988, this owner was buying back the car of his youth, along with the other 10 onlookers. In the years that followed, increasing numbers of boomers joined the act, pouring money into a piece of their lost youth.
Certainly, many of these cars have turned out to be good investments, but the drive to own one involves more than money. David Atkin, owner of Red Line Performance and Restoration in Salt Lake, Utah, warns customers that muscle cars are not a gold mine. “I tell most of them that they’ll probably lose money. Unless they have a special car, they’re not going to make anything,” he says. Still, owners request work.
Some writers have suggested that boomers are attempting to relive a simpler time. Truth be told, the muscle era was anything but simple. It shared its beginning with Congressional passage of the Tonken Gulf resolution, which committed the U.S. to a decade of disastrous fighting in Vietnam. That same era also marked social and racial unrest. Detroit and Watts burned. Protests broke out on college campuses. As the muscle era ended, news on Watergate hit, and President Nixon was forced to resign. Hardly a simple time. As for the suggestion that boomers simply are attempting to relive their youth, how many have spent $35,000 to restore a car only to set about disturbing their neighbors?
Some other factor is at work here. Surely these cars represent some part of America that boomers wish to maintain. Given all the possibilities — simplicity, youth, midlife crisis — and the factors that dispute them, the best answer, perhaps the only remaining possibility, is simple honesty.
Review the muscle era and one striking, undeniable truth stands out — these cars were (and are) genuine. They never changed. Juvenile, with more moxie than control, more power than sense, they were youth in automotive form. They were always true to their form.
They looked fast because they were. They looked mischievous because they could be trouble. Even as later models added disc brakes, climate controls and power windows, nothing about them was ever high-end or mature. When manufacturers stopped production, even the youngest fans knew they would never see their kind again.
This “once in a lifetime” reputation has helped dictate how their fans restore and maintain them. Muscle fans want their vehicles to look as they did coming off the factory floor or out of the family garage after being customized in ’60s or ’70s fashion. For enthusiasts, restoring the car means restoring the era. Although some of these vehicles receive safety and convenience updates, anything modern typically is hidden or camouflaged. On the outside, these cars proclaim muscle era and in the cockpit they run fast, furious and without hesitation.
Perhaps most revealing, their owners still drive them. Sachs estimates that except for 10 percent of muscle cars — the rarest and most valuable — most still perform 5,000 to 10,000 miles a year.
Looking back to 1945, America’s returning heroes retired to adulthood desiring the foremost thing they had abandoned, that most familiar and genuine of all things: family. Although the world and their hometowns had grown and changed, family — always faithful and forthright — waited for their return. Millions embraced this loyalty by creating their own families.
Sixty years later, their children are repeating a similar quest for reassurance in changing times. Who would have guessed so many would find it in the thundering, growling bellies of petrol-guzzling street beasts?
The aftermarket retro-revolution
Northeast Ohio’s Flashback Unlimited regularly sees a scenario familiar to many Midwest restoration shops. Rustbelt customers often deliver restoration projects with rust eaten bodies. “We always suggest they find a better body so they can put more money in the engine,” says Saccone. “Most often, we end up dumping the better part of the repair into the body.” That’s just one of the idiosyncrasies restorers face.
Certainly, some general rules apply to muscle car restoration. Driven by a trend set by baby boomers, enthusiasts usually want a product straight from the ’60s and ’70s. “You rarely see a request for custom paint,” says Saccone. A handful of other trends also are driving the industry.
For example, Saccone says most customers are content with aftermarket parts. Those seeking stock parts usually do so because they want to compete in stock contests. Also, “Boomers tend to ask for parts made by aftermarket companies they recall from their youth,” says Spoonhower, who notes that most restoration work is performed by shops. “You do see some enthusiasts doing the whole job, but most will turn the more complex work over to a shop.”
When shops go to buy parts, Sachs says they look to companies with a reputation for providing parts with the best possible fit. “Fit is much more important than finish,” says Sachs. “If a piece doesn’t fit right, shops will send it right back. They’re not going to waste time trying to make a bad piece fit.”
The latest and perhaps most significant trend to hit the muscle industry is the addition of safety and convenience updates. Because the majority of muscle car owners still use their vehicles, they’re often, and unfortunately, tied to underwhelming technology. The aftermarket has come to the rescue with modern climate control systems — with much needed air conditioning — that can be retrofitted to muscle cars. Enthusiasts also are refitting their vehicles with four-wheel disc brakes to provide the kind of stopping power muscle cars rarely had. Other hot updates include stereo upgrades and radial tires, which provide a much better ride than original bias ply tires. Additionally, enthusiasts are investing in new shocks, modern seat belts and airbags, along with traction control.
Performance modification, the most popular traditional customization, also is being addressed. One of the most interesting developments is the inclusion of modern high performance engines in classic bodies. While this may sound like breaking one of the cardinal rules of muscle restoration — keeping the car in the era — aftermarket companies have produced ways to retrofit these engines, engineering them to produce modern horsepower in muscle era form.
For example, Edelbrock’s LS1 Carbureted Manifold Package converts GM’s popular GEN III engines from EFI to carburetor. Enthusiasts can now put popular high-output V-8 engines designed for post 1997 Camaros and Corvettes into muscle cars and replace computer controls with a traditional carburetor. The engines can then be tuned for maximum power and a broader torque curve.
This power can be tied to modern five- and six-speed manual transmissions Sachs says are becoming popular additions to muscle cars. The result is a product entirely palatable to muscle fans, a muscle car with racecar performance.
Good news for aftermarket companies: no muscle car is ever a finished product. Usable parts — wheels, shocks, brakes, etc. — must be replaced. Owners also constantly tinker with aftermarket devices to make their cars run, sound and look different.
Two rules continue to guide both the muscle car and aftermarket industries. The uniqueness of the car is tied to the uniqueness of the owner. Enthusiasts see their cars as extensions of themselves. These bonds continue to drive the muscle market and feed the aftermarket, forming a long-standing tie between owners, cars and parts sellers.
