RM Sotheby’s fully integrates Auctions America
It was February 2015 when RM Auctions and Sotheby’s entered into a strategic partnership that saw Sotheby’s acquiring a 25% stake in RM Auctions, which thus changed its name to RM Sotheby’s. Over the nearly three years that have elapsed since then, many have wondered what would become of Auctions America, a smaller classic car auction house and subsidiary of RM Auctions. Now we know: on October 13th, 2017, Auctions America formally ceased to exist: from now on, all its sales and people will be part of the RM Sotheby’s Group. This news, while not a surprise, provides a strong indication on where the classic car auction market is heading, and what it is going to look like in the future. It is clearly going to be made up of larger companies that can offer broader coverage of the international landscape, and serve all different market levels.
Auctions America, the history
Auctions America by RM, a subsidiary of RM, was founded in July 2010, with car collector and expert Donnie Gould as its President and Ed Cepuran as its Chief Financial Officer. It is based in Auburn (Indiana, USA), where it has a permanent staff of 30 people. It came into being when RM Auctions purchased a 235-acre auction park in Auburn from long-time automobile auctioneer Dean V. Kruse. Over the following years, Auction Americas built up a good calendar of auctions. The biggest were the two Auburn sales held in May and September (a tradition that dates back almost 50 years), but the program also included the sale held in conjunction with the Auburn, Cord, Duesenberg Festival, the Fort Lauderdale (FL) sale in April, and the Hilton Heads (NC) auction, held to coincide with the Hilton Head Island Concours d’Elegance classic car show, in November.
In June 2012, Auctions America held its first ever Californian auction in Santa Monica, the heartland of so-called SoCal car culture. The event was enthusiastically supported by RM Auctions and its people, and immediately became the firm’s “high profile” sale. The aspect that has changed little over the past seven years or so is the target market and the level of cars offered by Auctions America: indeed, it continued to specialize in 1950s and 1960s classics, mostly American muscle and custom cars in the low to medium price range. This was perfectly in line with the aim of the firm, which was to offer cars covering the lower segment of the market, up to the level where RM Auctions “took over” with its higher-end cars. In this way, covering the entire spectrum of the collector car market, the RM Group as a whole was always able to offer clients who had cars to sell the perfect stage on which to offer them. When, in 2016, the “Auctions America Santa Monica” sale became the “RM Sotheby’s Santa Monica” sale, it was clear how the group was developing its strategy.
RM Sotheby’s today
In the classic car world, RM Sotheby’s is now the auction house with the biggest turnover and the only one capable of providing its customers with a full range of services, including an internal restoration shop. Furthermore, with headquarters dedicated to classic cars in Canada, the USA and the UK (the European headquarters), it boasts extensive coverage of the international landscape. If we also consider the “Sotheby’s part of the name”, the firm’s level of market coverage becomes even more impressive, as it has offices in almost every country in the world, including Hong Kong and Moscow, and access to a database of collectors containing thousands of names. This is one of the reasons why RM Sotheby’s is also a leading supporter of the concept of “classic cars as an art form”, and indeed it organizes sales devoted to this theme.
Just to give an idea of the scale of its “business” activities, you need only consider that the annual value of the classic car market managed by auction houses is well above the USD 1 billion mark (Source: The Classic Car Auction Yearbook, season 2015–2016) and that RM Sotheby’s sales are worth at least half of this amount (USD 500/600 million/year). The integration of RM Auctions and Sotheby’s had already resulted in a considerable number of auctions on the RM Sotheby’s calendar, and with the further integration of the Auctions America ones, the total is set to reach a record 11 in 2018. In this way, more car specialists are now available to the Group’s customers, and in order to streamline operations, every part of the process, from consignment to purchase, has been made more standardized.
Judging by what they have to say, important long-term clients of RM Auctions, subsequently RM Sotheby’s, seem to be generally satisfied with the business opportunities provided and the good sales results they are able to secure, but they feel that the general level of customer service, which was the real trademark of the firm until a few years ago, has declined somewhat. The increase in the number of sales, together with the situation on the market of course, has meant that there has been a slight drop in the average level of the cars offered for sale, and in their level of preparation.
Legally, RM Sotheby’s is a Canadian company, while Sotheby’s is English. This gives the firm the advantage of being able to remain a “local” player, irrespective of the evolution of economic relations between these two countries and continents. It has only three real competitors: the English firm Bonhams, the French auction house Artcurial, and the American firm Gooding & Co., which are all very different companies. Bonhams has a 200-year history, numerous international subsidiaries and 60 offices in the EU and USA, including one, in San Francisco (CA), exclusively devoted to cars. It organizes auctions covering the whole world of collectibles, including fine arts and antiques. In the classic car world it is highly active, holding about 20 auctions a year, with cars covering the full range, from humble ones to the Ferrari 250 GTO, but in the main it deals with medium to higher-medium end cars.
Gooding & Co. is based in Santa Monica and is a family company founded in 2003. Immediately targeting the very upper end of the market, it soon became the official auction house of the Pebble Beach Concours d’Elegance. Gooding organizes only three sales each year (Arizona in January, Amelia Island in March, and Pebble Beach in August), but because of the very high level of the lots offered, its prestigious high-level sales attract considerable international interest and generate impressive results.
Artcurial, a firm long established at international level, arrived on the collector car scene only a few years ago when it set up its motor department, but it soon established itself as one of the main players on the European market. It holds four sales a year (although not every year is the same), usually two in Paris, one in Le Mans and one in Monaco.
Outlook for classic car auctions
Looking ahead, it could be that Bonhams will be the first to feel the heat of the “firepower” of RM Sotheby’s, as the two firms will obviously be competing for the same type of client, while Gooding & Co. could feel the effects later on, as this large new competitor grows in strength and deepens its penetration of the market, and thus becomes capable of attracting important cars that might otherwise have been entrusted to them to sell.
Artcurial, if the traditional Auctions America target is also pursued in Europe too, will find itself with a major competitor on its doorstep, but strengthened by recent successes and by its very name – this is a company that has taken the market by storm on more than one occasion – it will surely rise to the challenge.
Finally, it is also important to note that, in recent months, many auction houses, some with a very long tradition in the arts and collectibles worlds, have entered the classic car market. In this regard, the names that immediately spring to mind are Pandolfini, a third generation firm, and Bolaffi, founded in 1890. It will be interesting to see how things unfold, but it is likely that we will see the creation of further partnerships in the not too distant future.
Additional info in the press release: RM Sotheby’s integrates Auctions America subsidiary into annual calendar of events