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End of Year: Market Round-Up

Always a sign of age, it feels surprising thatonce again it's time to reflect on another year of intense activity inthe classic car market whilst looking forward to see what the next 12months hold for us.

Most top-end dealers will probably concur that 2006was the best year they can remember since the heady late 1980s boom,and the recent launch of the authoritative new Bolaffi catalogueat the Royal Automobile Club in London threw up some interestingstatistics. This guide is published annually by an Italian house bestknown for their reference works on the art and stamp markets, withspecialist motoring expertise provided by Modenese historians Adolfo Orsi (scion of the industrialist family which owned Maserati from 1937-1971) and his longstanding colleague Raffaele Gazzi.

Bolaffi-Catalogo  Ferrari 
Left: 2005/2006 Bolaffi Catalogue.
Right: 1967 Ferrari 275GTB/4 NART Spyder: the second most valuable car to sell during the 2005-6 auction season (Gooding, August 2005).

The Bolaffi catalogue is now in its 13th year whichmeans that clear trends are starting to emerge. Consider these figuresfrom the 2005/6 edition, for example:

Of the 100 most valuable cars sold at auction worldwide in 2005-6, the best represented make was Ferrari with 21 cars, up from just 6 in 1993 but down from a peak of 45 in 1999.

The second most represented car was the Cobra, with 9 cars compared to 1 in 1993 and a low of none in 2003.

Equal second with 9 cars was Duesenberg, up from none in 1993, whilst third was Mercedes-Benz with 6 cars, compared to 17 in 2002 and 12 back in '93.

Bentley accounted for just 4 cars, compared to 8 in 1993 and a high of 16 in 1994.

The average proportion of Ferraris successfully sold out of those auctioned last year was 60%, compared to 57% back in '93 but down from a high of 74% in '99.

Rolls-Royce had 14 cars in the top 100 back in '93, compared to a high of 16 in '95, and just 1 per year in 2004/5 and 2005/6.

The average price of Ferraris sold at auction last year was $273,000, compared to $270,000 in 2004 and $99,000 in 1994. The low point was $45,000 in 1995.

The combined value of the cars auctioned in 2005/6 covered by Bolaffi was $281.6 million, compared to $181.2 million just a year earlier and $46.4 million back in 1994/5.

Classic car graph Bolaffi-Catalogo 
Left: Classic Car auction market turnover.
Right: Gregor Fisken.

After Adolfo Orsi had presented the facts and figures he invited theheads of the leading auction house car departments, plus theundersigned (despite no longer qualifying on the first count), tocomment on the market and the prospects for next year. The youthful Rupert Banner of Christie's(who recently announced that they were ceasing UK motoring sales)commented enthusiastically on his firm's results and predicted more ofthe same, with strong prices in 2007 and a growing market. My formercolleague Max Girardo, back in the auction world as newly appointed head of RM's European operations,concurred and thought the present bull market would probably remainunchanged. I expressed the view that the current rate of priceinflation was unsustainable and that whilst common sense and experiencehad both shown that 'the best' was always in demand, no market roseindefinitely across the board. Rob Myers, the founder and CEO of RMwho had stopped off in London to attend, shared this view and felt thatcertain areas of the market, notably muscle cars, had risen too fastand that pricing anomalies now existed which could not be justified. Simon Hope, genial founder and director of provincial UK auctioneers H&H, agreed. The optimism of youth versus the cautious older generation?

By way of comparison, I asked two friends who are well-known and respected in the business to share their views with us:

David-Gooding  10th-highest-sale,2005(700)
Left: David Gooding.
Right: Back in fashion- Duesenberg SJ Convertible, 10th highest sale at $2.2 million (Gooding, August 2005).

Well-known Kensington based 'high end' dealer and racer Gregor Fisken was typically optimistic: "Overall,a very strong trading year. We're regularly achieving prices equal tothose seen in the late 1980's and in some cases are exceeding theselevels. That said, we find our clientele increasingly discerning andsubsequently not all areas of the market are growing. Originality andprovenance accelerate the chances of a good sale result, and there isalways a strong interest in cars that are eligible for the 'blue chip'events such as the Mille Miglia, Goodwood and the Tour Auto.

"With the weakening ofthe dollar and a large part of the market being based in the US, theremay come a point when a disagreeable exchange rate holds Americans backfrom making acquisitions in Europe. However, I am sure we will seeEuropean collectors taking advantage of the discounted dollar and takeon stock priced in dollars. An overall scarcity of the right cars willunderpin the markets present price levels and the outlook for 2007 isgood."

Respected US auction entrepreneur David Gooding commented: "Mysense of the market for the next year is that the extremely rare, low,production pre-war segment of the market, as well as the post warsports/racing and coachbuilt cars will continue to appreciatedramatically in value. I can cite many examples in the past few monthswhere I have brought record price offers to clients, only to be refusedbecause they love their cars. We will see a few cars change hands inthe $20 million range soon....

"However, I cannotunderstand or support the sales results of many muscle car pricesrecently. Plymouths should not be worth three to four times more than agreat open Ferrari of the same period!! New hotrods that were built inthe last 6 months are not all automatically worth the $400,000-500,000asking price. I personally do not buy into it. Some rationality inthese two segments of the market would be healthy for all."

My own views are similar and whilst the Bolaffistatistics show dramatic rises in value over little more than a decade(consider the six-foldincrease in the value of sold cars covered by the guide), they alsoshow that different cars come into - and fall out of - fashion. Bentley and Rolls-Roycewere for years the mainstay of collecting on both sides of theAtlantic, whereas now they have been superseded by 'racier' marquessuch as Ferrari and even hybrid V8 engined upstarts (no names). The rarity and mystique of the Duesenberg, however, has seen a new generation of collectors begin to chase them. On the Ferrarifront, the statistics show that the percentage of 'top 100' cars soldcompared to those offered has dropped from a peak in 1999 when, in myopinion, vendors expectations were still in line with those of buyers'rather than often ahead of them. I don't think it's a coincidence thatthe number of Ferraris in the top 100 cars sold at auction (and this is an important distinction from those sold privately) is less than half as many as in 1999,reflecting that speculative Ferrari sellers probably know their pricesare high and don't want to risk a public 'no sale', and they may notthink they need to with so many private buyers around now anyway.

66_Cobra(500)  AU-Car-003(500) 
Left: 'Supersnake'- the twin supercharged, 7 litre, automatic Shelby Cobra starring at Barrett Jackson next month.
Right: 1939 Auto Union D-Type to be auctioned by Christie's at Paris Rétromobile 2007.

With the usual January auction madness looming nextmonth in Arizona, we're already hearing huge numbers bandied about fora variety of improbable motorcars. 'Five million bucks' is said to bethe estimate on 'The Cobra to End All Cobras', the twin supercharged, 800bhp, three speed automatic (!!!) 427 Cobra built in 1966 for Carroll Shelby and on offer at Barrett Jackson,who this year shifted $102 million of heavy metal at their Scottsdaleextravaganza. Not to be outdone when it comes to understated titles,rival firm RM offer 'The King Kong of Muscle Cars', which in case you were wondering is a purple 1971 Plymouth Hemi Barracuda Convertible. "One of 11 built and the only one featuring the rare color matching 'Elastomeric' bumpers",they inform us. Enthusiasts of Elastomeric bumpers (no, I don't knoweither) will have to stump up at least $2 million to own thisinteresting conversation piece, which has covered just 282 miles fromnew, presumably because it's so rewarding to drive.

The European end of year sales showed just how few good quality cars are available on the market over here: Bonhams' results at Olympia were buoyed by cars from the Rosso Bianco collection, acquired by a friend of the company earlier this year, but only one lot was hammered at over £200,000, whilst Coys' most expensive Lot, a Bentley R-Type Continental Fastback with 'the more desirable automatic transmission' (there's some expert advice), was also in the same range. Christie's of course were absent from this month's sales calendar, but all eyes will be focused on their Retromobilesale in February. This year their Parisian sale results were average,but for 2007 they have consigned the most expensive car to be offeredat auction since Bonhams took a 1962 Ferrari 250GTO to Gstaad back in 2000 (yes, I admit, we took it home again afterwards too).

But is Christie's star Lot actually saleable? There's no doubting that a pre-war Grand Prix Auto Unionis about as exciting as motorcars get, symbolic not just of the groundbreaking, Nazi backed technology of the era but also of a rapidlychanging world which was soon to be transformed forever. But singleseaters are notoriously hard to sell, due to limited opportunities foruse, demanding maintenance (in this case, imagine 485bhp, 12 cylinders,twin supercharging and just four similar cars in existence- don'tbother calling the owners club for tips or parts...) and the demands theyplace on drivers too. They didn't call Germany's pre-war pilotes 'The Titans' for nothing. Christie's have announced a pre-sale estimate of €8-12 millionon this, in Scottsdale-speak presumably 'The King Kong of Grand PrixCars to End all Grand Prix Cars'...never mind. The world record for a carat auction, set almost 20 years ago by Robert Brooks whenstill at Christie's, stands at £5.5 million (that's €8.1 million attoday's exchange rate). I wouldn't be surprised if it stands for alittle bit longer, but I wish Christie's well. If they can pull it off,it'll feel like the bull market of the late 1980s all over again. Justwithout the red braces.

'The King Kong of Muscle Cars': well-endowed 1971 Plymouth Hemi 'Cuda coming up soon at RM.

The 2005-6 Bolaffi Catalogue costs €40 plus postage and may be ordered from club@bolaffi.it.