Classic Car Auction Yearbook 2018 – 25 years of valuable insights
Continuing what has now become an annual tradition, the end of October saw the release of the Classic Car Auction Yearbook 2018. This annual publication, seen as the “bible” of the classic car market, analyzes the data and results recorded by the international auction houses in the previous 12 months of business, in this case the period from 1st September 2017 to 31st August 2018.
In a classic car world where knowledge has never been more important than it is today, the Classic Car Auction Yearbook is the ultimate fount of knowledge, giving the reader a professional and insider look at the market, its trends and its numbers, yet without ever allowing the information to be contaminated by biased or personal points of view. Numbers don’t lie and the commentary provided by book’s authors, Adolfo Orsi and Raffaele Gazzi, simply serves to help readers interpret them accurately.
The Classic Car Auction Yearbook first appeared 25 years ago, and with 23 volumes already published it is a collectible item in itself. Over the years, the series has covered the history of more than 80,000 cars, all identified by their chassis numbers.
A USD 1.2 billion turnover
It is quite staggering to learn, from the book, that the auctions it covers generated a massive USD 1.2 billion (almost 200 million dollars more than the previous season’s figure, corresponding to a hefty 11% increase), and that the sales staged in the USA accounted for a considerable 65% of this total. As Adolfo Orsi points out, “American growth is important, with the value of USA sales now 65% of the total value, definitely greater compared with the 50% recorded a couple of years ago.”
Dedicated “auction gatherings” like the ones in Arizona (Scottsdale), Florida (Amelia Island) and California (during Monterey Week) have a strong impact on the market, and collectors from all over the world join their American counterparts at these sales.
What emerges clearly, however, is that American collectors, compared with those from other parts of the world, are often more prepared to spend that little bit more, or at least put in that extra bid. Furthermore, 83% of the cars offered for sale in the USA found buyers, as opposed to 70% of those offered in European sales, and 68% of those put up for sale in the UK. Although these initial figures already give an idea of the performances recorded on the different markets, it is worth remembering that the 11% increase in turnover in dollars falls to just +3% if the result is converted into euros, due to the strengthening of the single currency versus the American dollar over the 12 months in question. Similarly, “translated” into GBP, the growth of the US market stands at +5%, making this the fourteenth consecutive year it has recorded growth in this currency. These are important data, as they show that currency fluctuations, quite strong in recent times, really do have a visible impact.
A 75% sale rate
In total, the cars offered at the sales covered in the book (i.e., those staged by Artcurial, Bonhams, RM-Sotheby’s and Gooding & Co., as well as some of the sales organized by less prominent auction houses) amounted to 5,628 (31 fewer than in the previous year), and three quarters of them (4,228) were sold (41 fewer than in the 2016-2017 season).
It is important to note that these results include the cars offered “without reserve”, a “category” that represents a sort of insurance policy, being intended to guarantee the auction houses a certain level of sales. Representing 29% of the total number offered for sale, these “no reserve price” cars were actually quite numerous, setting a new record of 1,611 units (160 more than in the previous season), and they accounted for a sizeable 18% of the total turnover.
As Orsi explains, “auction houses are well aware of the positive effect it can have on potential buyers when cars are not “protected” by a reserve price. In offering a car with “no reserve price”, an auction house is effectively allowing potential buyers to be the ones to determine its price, without interference from the seller. In the last two seasons we have seen a 54% increase in the number of “no reserve” cars, and this is a clear sign of the weakness of the market. Indeed, today it is very much a buyer’s market.” Naturally the majority of the cars offered for sale did have a reserve price, and well over half of these (65%) found new owners. Combined, these results amount to an overall sale rate of 75%.
Interestingly, the “no reserve price” strategy is not an option open only to less important or cheaper cars, as shown by the fact that eight cars in the Top 100 list were offered this way.
The return rate
As mentioned, the Classic Car Auction Yearbook has now been covering the classic car auction world for quarter of a century, and on consulting its archive we discovered that 1,129 of the cars offered in the 2017-2018 season had already been offered on other occasions in the past. These “returners” represented 20% of the total number sold.
The average value
“Last season, the average lot value, after falling for three consecutive seasons, recorded a USD 30 K increase, taking it to USD 284 K, the fourth highest average ever recorded in USD and the highest ever in GBP. Approximately a third of this increase, about USD 10 K, is due to the value of the season’s top lot, the Ferrari 250 GTO, which sold for USD 48.4 million” Orsi explained.
Classic car auctions in 2017/2018: The top lot
“We had to change the scale of our usual graph in order to be able to accommodate the value of the 2017-2018 top seller, an incredible USD 48.4 million” Adolfo Orsi told us. “That’s more than twice the price of the previous season’s top lot (USD 22.6 million), and 10 million more than the old record value of USD 38.1 million, fetched by another 250 GTO, the one sold by Bonhams at its 2014 Quail Lodge sale”. The sale of this year’s “number one”, the Ferrari 250 GTO (chassis #3413 GT) offered by RM Sotheby’s at Monterey in August, was achieved thanks to another system sometimes adopted by auction houses as a means of ensuring the sale of a car, in this case to the seller’s advantage.
Basically, the car is preliminarily sold to a new owner at a price that is satisfactory to both parties (buyer and seller), but the possibility of the car attracting a higher price at auction is nevertheless left open. If, indeed, someone comes forward who is willing to pay more for the car, then it is sold to that person, and the seller and the preliminary owner, on the basis of an agreement already drawn up and signed beforehand, usually share the extra money generated. In this way, the auction house achieves the maximum visibility for the lot, the seller is well protected, and the pre-sale buyer, who has lost “his” car, can nevertheless draw comfort from the good economic return on it. An all-win solution!
The high end of the market
“It is very clear that the classic car market shows different speeds and dynamics when the top-price cars are compared with the more average ones,” says Orsi. “First of all, at the very top end, we find that the 226 most expensive cars (5.65% of the total) are, together, worth more than all the other 4,002 sold in the course of the season. More and more, the results show that the provenance of a car, together with its history, the reputation of the restoration shop and the authoritativeness of the research, are carrying far more weight than they did in the past. This, together with the greater importance attached to the quality and condition of cars, is to be taken as a positive sign of the cultural growth of our sector.
If we look back over the past 25 years, we see that the value of the season’s 100th most expensive car has increased steadily. Last season it was USD 1,770,000 (+15% on the previous year). Furthermore, the number of the cars sold for more than USD 1 million rose from the previous season’s total of 195 to 226 (still a little below the record of 245 set in the 2013-2014 season).
Also impressive was the number of cars breaking the USD 10 million barrier: up from four to six, while the number of cars fetching between five and 10 million dollars increased from 13 to 15. What all this means is that million-dollar lots now account for 51% of the total turnover, up from the previous 45%, confirming the pyramidal structure of the season’s sales.”
The top-selling brands and the age of the cars sold
Ferrari confirmed its position as the leader of the classic car market, remaining the top-selling brand with sales worth USD 334,454,000 (representing 27.81% of the total turnover). In second place came Porsche with USD 131,857,000 (10.96%), followed by Mercedes-Benz with USD 92,740,000 (7.71%). In 16th position, the last brand to record sales worth more than 1% of the total, we find Rolls-Royce with USD 14,977,000 (1.25%). All the other brands, each generating sales worth less than 1%, together accounted for 18.95% of the total, with takings of USD 227,835,000.
The “classification” of the brands by their average prices was found to be heavily influenced by the sale of three very special cars, a Ferrari 250 GTO, a Duesenberg SSJ Roadster and an Aston Martin DP 215, with the result that Duesenberg topped the classification, its cars selling for an average of just over USD 3 million, followed by Bugatti (knocked off its usual top spot) at USD 1,289,000 and Ferrari at USD 722 K.
It is interesting to note that the average year of manufacture of the cars sold has increased steadily over the passing decades, rising from 1947 in the 1993-1994 season, to 1957 in 2005-2006, and finally to 1967 in 2017-2018, although the actual age of the cars chosen has remained substantially stable (46-47 years, 48-49 years and 50-51 years, respectively).
On the basis of the data and results presented, Orsi concludes that “the market seems to be growing in numerical terms, and prices, having been deflated by speculation, are now meeting the expectations of buyers, also thanks to the fact that more cars are now offered without a reserve price. It is a generally healthy market, with fewer investors and speculators, and knowledge is becoming more important all the time.”
Classic Car Auction Yearbook 2018 – The book
As always the Classic Car Auction Yearbook contains numerous charts and comments to peruse. For example, it looks at the price trends over the years of specific cars (identified by their chassis numbers), expressed in three different currencies. This year, the book puts 14 cars under the magnifying glass. They include a 1948 Alfa Romeo 6C 2500, a 1931 Bugatti Typo 55 Roadster, a 1956 Ferrari 250 GT Spider California LWB, and a 1976 Porsche 934 Turbo. The Top Ten cars are described in detail, and, for the first time, the list of the top ten lots of the year is split between pre and post-war cars. Classics from 1946 to 1964 accounted for USD 441 million (36.66%) of the overall sales, and 76.6% of the cars sold. The book also looks specifically at 5,628 cars divided into their 308 different brands. The new 2017-2018 Classic Car Auction Yearbook has 418 pages and 973 photographs. It can be purchased for €70 through an international network of automotive bookstores as well as internet-based retailers. For more information and to find out where to buy the Yearbook, please visit: www.classiccarauctionyearbook.com.
Graphics courtesy of Historica Selecta. Photos of the Classic Car Auction Yearbook courtesy of Historica Selecta. Photos by Marco Moretto. Event photos courtesy of the author.