Sometimes you watch how things unfold, think you see some trends developing, but you cannot confirm your suspicions with empirical evidence. Fortunately for those of us who try to keep an eye on and track the pulse of the collector car auction business, each year about this time that evidence arrives in the form of the Classic Car Auction Yearbook.
The 2017-2018 edition marks the 25th anniversary of this annual effort compiled and published by the Italian tandem of Aolofo Orsi and Raffaele Gazzi. Orsi’s grandfather and father managed Maserati from 1937-1968.
In 1990, he founded Historica Selecta to make a business of his lifetime passion for collector automobiles. Gazzi, a banker, concours judge and automotive historian, joined the consultancy in 1991.
The book’s format annually starts with an analysis of the auction market, from September 1 through the Monterey sales the following August. The heads of several major auction houses offer their perspectives, followed by the authors’ comments in words and colorful charts and informative graphs, followed by several lists that detail the more than 4,200 vehicles sold at the major sales they track. Those sales are hosted by 25 auction houses around the world.
In his essay, Matthieu Lamoure of Artcurial Motorcars notes that in June at a Christie’s auction, a single painting – Salvator Mundi by Leonard da Vinci – sold for more than $450 million, a figure that exceeds the total price paid during Monterey Car Week 2018 for all of the 1,200 cars sold.
Car collecting, Lamoure suggests, “is still in its infancy.”
Kenneth Ahn, president of RM Sotheby’s, notes that the market continues to grow, pointing out that the 2003-2004 yearbook reports global sales of $151 million, a figure exceeded this year by RM Sotheby’s Monterey auction.
However, he adds, while such financial growth is pleasant, it should be considered a by-product of our passion for the cars and their stories.
And what of the story of the most recent auction year? Well, this is where we now have evidence to support our observations.
Does it seem as though there have been a lot of modern supercars selling for substantial prices of late? The Yearbook authors note that among the vehicles selling for the 100 highest prices, the number of those produced since 2000 has grown annually, from just 5 four years ago to 12 to 15 and to 23 for the 2017-18 period.
“We notice that the phenomenon of ‘instant classic’ (cars sold with a few miles or kilometers, similar to financial assets) is continuing its upward trend,” they write. “Should we call them ‘auto-real estate’? (with a double meaning: they do not move and cost as much as a building!)”
Have you also noticed more cars being offered at auctions with “no reserve”?
The authors note that the market remains weak, that owners of many of the major cars offer them at auction only if they have received a guaranteed minimum price from the auction company. Nonetheless, the number of cars on auction dockets increases, in part because the auction houses take on many lesser vehicles but only if they are offered without reserve, and thus are guaranteed to be hammered sold.
Among the more than 5,600 vehicles offered at the auctions covered by the Yearbook in 2017-18, nearly one-third, more than 1,600 — a record — crossed the block with no reserve price.
With charts to verify their statements, the authors add that we remain in a “buyer’s market.” However, they wonder if we’re due for a rebound. They suggest that we should know by the publication of the 2018-2019 Yearbook.
But it’s clear that the collector car marketplace is not functioning in its own little world. Among the things the authors say to watch that could influence the market in the coming year are:
• the effects of England’s withdrawl from the European Union,
• the contining impact of changes in the U.S. tax code, especially the 1031 exchange,
• new U.S. import duties (tariffs), as well as those imposed by other nations,
• increasing commissions charged by auction houses,
• the impact of the new ownership of auction house Bonhams,
• RM Sotheby’s push into brokering private sales as well as those at public,
• the hobby’s exposure to a wider audience through the new Grand Basel exhibition (and with Miami and Hong Kong getting their own similar shows in 2019),
- new major concours d’elegance scheduled for 2019 in Hong Kong and Singapore.
But whether the market is up or down, as the 2018-19 period unfolds, “Buy the car you like, which reminds you of happy moments, and do not let the investment mirage guide you,” the authors conclude. “By doing so, you may not earn a financial return, but we guarantee you that you will enjoy it and that it will improve your quality of life.”
Classic Car Auction Yearbook 2017-2018
By Adolfo Orsi and Raffaele Gazzi
Historica Selecta, 2018
Hard cover, 418 pages
$79 from Amazon.com