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'Art' and Automobiles

by Rick Carey

2013 saw unprecedented results in the collector car auction market culminating in RM Auctions' landmark sale in November at Sotheby's in New York City. Characterized as 'The Art of the Automobile', RM and Sotheby's put collector cars front-and-centre in the art market spotlight.

Presented in Sotheby's 10th floor exhibition space, a space discreetly shared with the Bay Psalm Book - 'The Whole Booke of Psalmes Faithfully Translated into English Metre', Cambridge, Massachusetts, 1640, sold on 26th November for $14,165,000 - RM and Sotheby's set a new standard for collector car consignments and presentation. The Bay Psalm Book, one of the rarest books in Western history, brought $135,000 less than the $14,300,000 RM got for the Ferrari 250 LM s/n 6107.

Nearly simultaneously, however, Christie's sold Francis Bacon's 1969 triptych 'Three Studies of  Lucian Freud' for $142.4 million on 12th November, eight days earlier. The Bacon was by itself 2.3 times RM/Sotheby's $62.6 million total for 'The Art of the Automobile'. Collectors can only look at their Francis Bacon triptych; they can drive their 300SL, Talbot-Lago Figoni & Falaschi cabriolet or XKE.

You thought GTOs were expensive?
Even more valuable than a Ferrari manual...

The refreshing presentation arranged by RM at Sotheby's signaled a step into a rarified world for collector automobiles. Considering them as art, stationary in a prestigious exhibit space and sold on Sotheby's main auction floor represented only as Michael Furman's superb photographic images on an easel on Sotheby's turntable and on video screens, is something that has rarely, if ever, been done with automobiles. Even the catalogue employed a different format, eschewing the dry opening specifications block for a full text layout focusing on design and style.

Sixteen of the 32 vehicles sold (out of just 35 offered) were hammered down at bids of $1 million or more, topped by the Ferrari 250 LM, a predominance of prestigious, desirable and beautiful automobiles rarely before seen at a single auction.

It was a fitting way to mark nearly the end of the 2013 auction year which saw an unprecedented offering of rare and desirable cars.

Unique Maserati A6G Zagato Spyder tripled in value in as many years
Figoni-bodied Talbot epitomised the car as art

In addition to the 250 LM these included Bonhams sale of the Mercedes-Benz W196R at the Goodwood Festival in July for $29,613,950, RM's sale of the Ferrari 275GTB/4 NART Spider at Monterey in August for $27.5 million and RM's sale of the Ferrari 375 MM at Villa Erba in May for $12.7 million. It was a year of extraordinary results for the most valuable automobiles, piling jaw-dropping prices one upon the other in remarkable succession.

The frenzied top-of-the-market transactions, though, were underpinned by solid results throughout the market. In a sketchy sampling of auctions I've compiled, only five of the 22 established venue auctions compared showed lower sale totals in 2013 than 2012. For the group total, sales increased from $776.8 million in 2012 to $933.3 million in 2013, an increase of 20.1% year-on-year. In the economic malaise of 2013 any retailer would be overjoyed to achieve even a quarter of that increase in same-store sales.

Even consignment auctions like Mecum and Auctions America showed strong 2012-2013 gains in individual sale totals and in their median (half sold for more, half for less) transaction values. All the stats indicate a robust collector car market. The headlines are dominated by headline seven and eight figure transactions, but thousands of cars in low- to mid-five figure US$ prices changed hands. The overall numbers would have been even greater but for a number of single-owner collections sold in stand-alone events which would otherwise have added their millions of dollars to the auction companies' other consignments.

Labelled by some as a Ferrari which looks like a Fiat, but what a Fiat!
Buyer of $500k E-Type had presumably never read a car magazine

It all begs the question, "Can the momentum be maintained?"

On the evidence of 2013 it seems the inference is "yes." Despite anemic economics in North America and Europe collectors have spoken with their bank balances, buying cars for fun - and maybe for a place to park a few $ or £ or € when those balances are earning peanuts without assuming unacceptable risk.

The view that they are acquiring physical assets as a hedge against economic catastrophe is at best weak. The prices being paid at the top of the market are by any standard generous, an irrational way to hedge. And if there is an economic Armageddon, how liquid will a W196, NART Spider, 250 LM, 540K or L88 Corvette be? As a store of value, high end collector cars rank well below gold, producing oil wells or even waterfront real estate. They produce no income, and are costly to maintain.

If, as seems likely, collector automobiles are being bought by collectors who want to use them, enjoy them and accumulate them, as long as there is discretionary capital available for them they will continue to be bought, driven, restored, shown and enjoyed. And there seems to be ample, possibly even abundant, discretionary capital out there.

Here's to 2014. We'll see. 

Images courtesy of Tom Wood, Corsa Research, Steve Wakefield, Bianchi-Piras and Peter Marshall 

Another auction, another record, this time for an early 300SL roadster
Sothebys and their clients had never seen anything quite like it