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The Inside Track From Pebble Beach: The Market Speaks in Real Time

By Simon Kidston

You've read the headlines and heard the gossip. If you want the backstory, read on.

The 2014 Pebble Beach auctions recorded the highest turnover in history and broke dozens of records. The first Ferrari 250 GTO to cross the block in over a decade was knocked down for $38.1 million to a mystery buyer, easily eclipsing last year's ex-Fangio Grand Prix Mercedes at 'just' $29.7 million. The last GTO sold at auction was back in 1987, when it too set a record at $1.5 million; if that rate of appreciation continues, by the year 2041 a GTO should command almost a billion dollars. And yet, as always, there's more to the picture if you look closely.

Many pundits wondered whether 2014 would be a watershed year for the classic car market. It's far from over yet, but what happens at Pebble Beach sets the tone at the top end of the business until the next merry-go round of auctions in January and that mood usually filters down to the lower echelons, so the effect on confidence is pervasive. As my friend SCM publisher Keith Martin observed, the Pebble Beach sales represent the market speaking in real time.
A brace of Ferraris- what else- greets shoppers at RM
Three months, three new records: the Countach market re-defined?

In the run-up to last weekend a seemingly never ending drip feed of auction house press releases, each announcing a heavyweight new consignment, were interpreted by some as nails in the market's coffin. Why had so many owners decided to cash in now? And did the auction houses really believe there were enough buyers out there, each willing to pay a record price just to meet the reserve, to absorb so much heavy metal? The arms race between the auction houses was clearly on.

Nowhere is their rivalry greater, and the media scrutiny more intense, than at Pebble Beach. Whilst collectors battle it out on the 18th fairway for the coveted 'Best of Show' trophy, fielding multimillion dollar machinery restored to a standard which in itself has come to be defined as 'Pebble Beach', the big guns of the auction world line up to conquer the two most prized accolades in a fiercely competitive industry: the highest turnover, and the highest individual sale.

In the past decade RM and Gooding have shared the honours equally for the former, with Gooding  trumping its rival six times with the most valuable car sold. Bonhams, for years the underdog in the US market, has never challenged the other two for turnover and has never claimed the top motorcar result...until 2014. With the art and financial press leaking details that the venerable British house was wooing suitors for a sale of itself, the stakes this year were higher than ever before.

Silent supercar: 1,000 mile McLaren F1 had been mothballed in Japan
Same idea, different era: this is Ferrari and Pininfarina's wild interpretation

Central to Bonhams' fightback was consigning the Maranello Rosso Collection, the jewel of which was the Ferrari 250 GTO, widely considered the Holy Grail of car collecting and the most valuable to be traded with any kind of regularity. Much was made in the pre-sale marketing about its long term provenance in one ownership, although the Italian mineral water tycoon who assembled and raced this legendary line-up of racing and GT Ferraris passed away early in 2010 and his collection had stagnated on the market as a package for the past four years until Bonhams facilitated its sale to a group of investors shortly before the auction (the longest continuous ownership GTO is actually tucked away safely in the garage of the US enthusiast who paid $6,000 for it in 1967...).

The tension was palpable as 5pm approached on the afternoon of Bonhams' auction, the first of the weekend. Seating in the vast tent was reserved exclusively for those in possession of the right credentials, including VIPs 'pre-approved' for special red paddles allowing them to bid on the most valuable lots, whilst regular auction goers jostled for space with camera crews behind rope cordons. Anxious that traffic outside was at a standstill and the seats had not yet been filled, the start of the auction was delayed by 15 minutes before, finally, chairman Robert Brooks took his place on the rostrum with a phalanx of telephone bidders to his left. Lots 1 and 2 passed uneventfully until lot no.3 roared on to stage under its own power, the barking side exhaust of its V12 leaving the first rows of bidders cowering in awe. "Ladies and gentlemen, the Ferrari 250 GTO" announced Brooks with a sharp rap of his gavel to bring to attention a bustling audience holding enough cameraphones aloft to resemble a pop concert. Opening at $10 million, Brooks rapidly took bidding to $30 million, but from there upwards it was like pulling teeth: reduced to accepting increments of $50,000, it took no less than 11 minutes to progress from $34 million to the hammer finally going down to a telephone bidder at $34,650,000.  

$40 million? $50? $75? In the end they were all wrong. There's probably a good reason GTOs don't appear at auction...

Considering that, leaving aside ill-informed rumours and hearsay, the last confirmed GTO transaction was for a less valuable Series II example in a private deal earlier this summer at just under $50 million, Robert Brooks' rhetorical questions to a hesitant bidder from the rostrum answer themselves: "When are you next going to get a GTO at auction? And is it going to be any less?"

To put the GTO result into perspective, you'd have struggled to find anyone before last weekend willing to bet that a Ferrari 275 GTB with a hot engine and racy bodywork (but which never raced in period) would be worth 70% as much as a 'pukka' 250 GTO, but that's exactly what RM achieved just two days later at their rival Monterey auction a few miles away. Supplied new to one of Ferrari's most faithful clients, WW2 resistance hero and paper mill owner Avvocato Pietro Ferraro, this 275 GTB served as a fast road car until the mid-1990s when it was sold for $450,000 and turned into a historic racer. Two American Ferrari collectors duked it out to own it, and the $26.9 million result is as staggering as the $10 million paid the same evening by a British enthusiast for a perfectly normal Ferrari 275 GTB/4- its previous owners must be kicking themselves for not knowing its original purchaser was Steve McQueen...  

'I'm thinkin' of trading the old red bus for a Mustang...whaddya think?'
'Guess I shoulda kept it after all'

Gooding's top lot- no prizes for guessing it's another Ferrari- attracted more curiosity than bidding. The eccentric 365P 'tre posti' (three seats) resembled the love child of a pregnant Ferrari Dino and a McLaren F1, presaging Gordon Murray's masterpiece by over two decades but emphasising how two interpretations of the same idea can be so drastically right and wrong, although that's perhaps part of the Ferrari's appeal. With a greenhouse topped by plexiglass, race derived mechanicals and passenger seats better suited to circus midgets than female company, it's no surprise the 'tre posti' has accumulated barely 7,000km in almost 50 years, but personally we loved it. Sadly nobody else did so enough to part with the required $25 million, so back into hibernation it goes. Gooding's other three seater, the more recognisable McLaren F1 in refrigerator white livery, also stopped short of the $12 million lower estimate, as did the elegant silver Ferrari 250GT SWB road car at $10 million and the steel Mercedes-Benz 300SL Gullwing delivered new to Briggs Cunningham, a further casualty at $3 million. Even in a bull market, savvy bidders don't like to feel they're competing against the sellers reserve rather than each other. Top billing was left to a ubiquitous Ferrari 250GT SWB California Spyder at $15.2 million which appropriately once belonged to a Hollywood starlet and is destined to be repainted in its sinister original black.

We're not sure who's giving driving tips to whom (Hill or Cunningham?) but imagine owning this in 1954
A decade later this Ferrari 250 SWB was the car to own: it still is

Most amazing prices of the weekend? RM's Ferrari 275 GTB 'Speciale' and ex-McQueen 275 GTB/4 aside, a normal steel Mercedes-Benz 300SL Gullwing drew applause at $2,530,000, whilst a 1911 Mercer Raceabout with a convoluted history baffled experts at the same price. Another car with a colourful past, RM's Ferrari 250LM, which had been immolated in a 1960s road accident, illustrated the commercial value of Ferrari Classiche certification. The remains were advertised in 1973 as "A real do-it-yourself LM. Not an easy job. Make me an offer- help me clean up my garage." 41 years later a bidder helped the auction seller clean up to the tune of $11.5 million.

Meanwhile Bonhams' handsome but ordinary Ferrari 275GTB underscored the value of an attractive original colour scheme (in this case Verde Scuro) at a whopping $3.8 million. Ferrari 275GTBs were flavour of the year at Pebble Beach in 2014, perhaps appropriate as the model celebrates its 50th birthday.

'In 1966 I was 18 and my father had just bought this car from Avvocato Ferraro...I remember it did 120km/h in first gear at 7,200rpm!'
48 years later, and it's changed a bit- along with the price

Astute buys of the weekend included Bonhams' Ferrari 512 BB/LM with Le Mans history, headed back to France for just $990,000 and a victim of the now defunct Ferrari Historic Challenge, the preserved Ferrari 365 GTC from the same collection acquired by a wise Californian enthusiast for $858,000, Gooding's petite Alfa Romeo TZ1 at $1,023,000 and svelte Aston Martin DB3S headed to a young buyer in England at $5.5 million, and RM's handsome Bugatti Type 57C Stelvio drophead for just $770,000.

There were winners and losers at Pebble Beach this year. Bonhams may not have hit the highs expected with the Maranello Rosso Collection but they elevated their Quail Lodge auction to a new level of visibility whilst taking the crown for top price of the weekend for the first time ever. The challenge will be in sustaining that momentum. RM emerged as winner in the turnover stakes with a record $143 million auction, the highest ever, whilst Gooding's presentation was still the class of the field but for the first time they virtually tied with Bonhams on turnover which will probably see fewer speculative reserve prices accepted next time. There's a lesson for all buyers and sellers in there: you can't just pick a figure and ask it without a better argument to back it up than "the last comparable one made 20% less but that was six months ago."

When did you last see a classic Ferrari which raced twice at Le Mans for less than $1 million?
Ferrari 365GTC price came back to earth

The losers? Take a look at the Top Ten Sales countdown below and the Best of Show winner on the concours field: no longer a single pre-war car among them, and a lone Ford to distract from a Ferrari walkover. The new guard may have taken over, but the smart money seldom takes the obvious route. 

Overall from all auction companies:

Cumulative Total: $399.0M

745/1235 lots sold: 60% Sell-Through Rate

Average Sale Price:  $535,648

Median Sale Price: $99,000

2013 Cumulative Results 

Cumulative Total: $312.1M

749/1251 lots sold: 60%

Average Sale Price:  $416,696

Median Sale Price: $71,500

Some things never go out of fashion: Ferrari 250GT California Spyder at Gooding
Goodbye from your reporter- sadly I couldn't drive this home

Overall Top 10 Sales from all auctions:

1. 1962 Ferrari 250 GTO sold for $38,115,000 (Bonhams)

2. 1964 Ferrari 275 GTB/C Speciale sold for $26,400,000 (RM Auctions)

3. 1961 Ferrari 250 GT California SWB Spyder (closed headlight) sold for $15,180,000 (Gooding)

4. 1964 Ferrari 250 LM sold for $11,550,000 (RM Auctions)

5. 1967 Ferrari 275 GTB/4 sold for $10,175,000 (RM Auctions)

6. 1953 Ferrari 250 MM sold for $7,260,000 (Bonhams)

7. 1965 Ford GT40 Prototype Roadster sold for $6,930,000 (RM Auctions)

8. 1962 Ferrari 250 GT SWB Speciale Aerodinamico sold for $6,875,000 (Bonhams)

9. 1958 Ferrari 250 SI Cabriolet (closed headlight) sold for $6,820,000 (Bonhams)

10. 1959 Ferrari 250 SI Cabriolet (open headlight) sold for $5,610,000 (Gooding)

Thanks to our friends at Hagerty for their invaluable number crunching.


Images courtesy of Gooding & Company, Mike Maez, RM Auctions, Bonhams, Ultimatecarpage.com, Steve Wakefield, Bianchi-Piras and Pebble Beach Concours.

In case you thought we'd forgotten Russo and Steele: Yee-hah!