Market Latest
July 2008

Market Latest

A PAUSE FOR BREATH?

The question I’m most frequently asked at the moment- by private owners and dealers alike- is “what’s the market doing?” Nobody seems to know for sure. It’s impossible to ignore the state of the economy in most developed countries, and only a cynic or an impossible optimist could possibly suggest that this has no bearing on the classic car market. And yet, thus far at least, it’s proven remarkably resilient. Both in private and auction sales there has been precious little evidence of any softening, and new benchmarks continue to be set for exceptional, ‘out of the ordinary’ motor cars.

Rumours abound regarding the figure achieved in recent weeks by one of the better Ferrari 250GTO berlinettas (matched by equal speculation as to the identity of the buyer and his apparent youth) but indications suggest that it eclipses the previous record paid for any Ferrari - and quite possibly any motor car, something which may have weighed in the private owner’s decision to part with it after barely a year.

Meeting and talking with owners and those in the classic car business around the world, bravado apart, the feedback mixes a dose of caution with “…but I’d like to buy a such-and-such if you can find me one”. I’d suggest we’re experiencing a slowdown, which for many people will be a relief: I include owners who value stability in that group as well as those waiting to get into the market.

 
Left: ‘One careful owner’: normal working day for a Ferrari 250GTO before its value acquired three more zeros
Right: Unspoilt Jaguar D-type direct from 33 years in the Moores family, well bought at £2.2 million

Furthermore, and this is becoming a familiar trend, the market is becoming more polarized. In other words, demand for the very best of any given type, especially from newer collectors who increasingly prefer to short cut the patient and often painful ‘learning’ process by going straight to the top, combined with the rather jaded reaction of middle market buyers to everything which represents ‘the rest’, means that the gulf in value between the two is widening.

Looking at sales in the public domain, Bonhams’ recent Goodwood Festival of Speed auction had a few surprises in store. The headline Jaguar D-Type, wonderfully patinated and just as most collectors like to find them, went to a new owner for the lower catalogue estimate, £2 million plus premium. If you knew that a sister ‘D’ had been sold just weeks previously for some 10% more, you might think the Goodwood car was well bought (and it was) but remember that a comparable D-Type was sold by Bonhams at their flagship Pebble Beach auction less than two years ago for under half that amount and it puts into perspective the type of appreciation which has spoiled many speculators.

So what’s in store for us in the near future? Next month’s Pebble Beach extravaganza, a week packed with glitzy concours d’élègance events, historic racing, socializing and above all, champagne fuelled auctions, is likely to set the tone for the remainder of 2008. RMGoodingBonhams and less international firms like Russo & Steele have been busy for months, charming owners to secure prize consignments. At Pebble Beach they’ll be going head to head, competing to sell well over $100 million of heavy metal.

collection
The talk of the town: Dr. Peter Williamson's Bugatti collection starring at Gooding' s Pebble Beach auction

Clear favourite at the moment, and probably confident of repeating his 2007 knockout sale total, is David Gooding who has secured arguably the best collection seen at auction in years: that of the late Dr Peter Williamson, the former American Bugatti Club chairman who died last month. His family has consigned almost his entire Bugatti collection to the Gooding auction, without reserve and with proceeds going to Dr Williamson’s epilepsy charity: factors which, combined with the quality, provenance and ‘market freshness’ of the cars, should produce real fireworks in the bidding. If these Bugattis don’t sell well (and the marque is currently enjoying a much deserved renaissance amongst a new generation of collectors) then nothing will.

(Insiders, incidentally, are all desperate for news of the one Bugatti the family hasn’t consigned…)

 
Left: Offered without reserve: ultra rare Bug 57SC at Gooding is likely to soar over $5 million
Right:  …and from the same Bugatti collection comes this handsome Type 55 roadster

Rather than conforming to the old adage of “pile ‘em high, sell ‘em cheap”, Canadian rivals RM manage, by sleight of hand or perhaps just slick marketing (credit where it’s due, especially to their catalogue production team), to “pile ‘em high and sell ‘em high”. Experienced head man Ian Kelleher describes their sale to me as “The most impressive offering we’ve ever had in Monterey” and by any standards the diversity and standard of the line-up is hard to fault. The auction catalogue would dwarf most small town telephone directories, but it includes some gems. My personal favourite, and it’s a rarely seen bodystyle these days, is the stunning Rolls-Royce Phantom II town car by New York coachbuilder Brewster (owned at the time by R-R) with the most outlandish lines imaginable for a formal conveyance. It’s one of just three in existence and RM are expecting $2- 2.5m for it. 

 
Left: Flamboyant Brewster-bodied ’33 Rolls-Royce Phantom II headed for RM with $2-2.5 million price tag
Right: Is the concept car market still hot? ‘58 Chrysler Diablo will tell us

If that’s too restrained for your tastes, there’s also the 1958 Chrysler Diablo show car ($2.5m-3m and unlikely to be crossing the ocean any time soon), or if Ferraris are your thing, take your pick between a brace of 275GTB/4s (one a ‘multiple platinum winner’, another wonderful Americanism) ambitiously estimated up to $1.8m, a lovely early 250GT Tour de France berlinetta from long term US ownership ($4.5m-5m and well recommended) or an über-restored 250GT SWB berlinetta (very bullish at $3.6-4.2m). And I can’t fail to mention a bright orange Lamborghini Miura SV, converted from RHD to LHD and shinier than they ever left the factory, estimated at $825-975k. Not sure I’d want to drive at 170mph in the seat originally intended for the passenger though…

 
Left: ’No stories’ Ferrari 250GT Tour de France berlinetta, est. $4.5-5 million
Right: RM are hoping to approach seven figures for this Miura SV

The most valuable car of the week is likely to be ‘E2A’, the famous racing Jaguar upon which Bonhams is pinning its hopes. The historical link between andE-type, this American liveried, ex-Cunningham team prototype didn’t cover itself in glory (lending the car to Cunningham wasn’t an entirely altruistic act on the part of Jaguar) and was saved from being scrapped by the father of its present lady owner some 40 years ago. Next month both she and Bonhams will be betting that someone will vindicate that rescue to the tune of $7m…

 
Left: ‘Scrapyard survivor’ Jaguar E2A prototype carries great expectations at Bonhams
Right: Now worth a hundred E-Types, time has been kind to E2A...

Looking at some of the catalogue estimates in the Pebble Beach sales, set by the auction houses based on the reserve prices fixed by vendors, you can almost hear them saying “Well, if you convert it into Euros it doesn’t sound that crazy”. I hope they’re right- we’ll report back from the front line in California next month to tell you if they were, and whatever happens, expect it to move the market.