The New York Times, August 26, 2016
Article by Scott Reyburn

Selling the Romance of the Road

Car lovers bored by the commercialization and predictability of today’s motor racing scene can at least turn to YouTube for memories of a more romantic, if more dangerous era.

One memorable clip was filmed from the back of a Jaguar D-Type that Mike Hawthorn took for a practice lap before the 1956 24 Hours of Le Mans. The Briton had won for Jaguar the previous year, despite having been involved in a crash that left one driver and 83 spectators dead. “Typical French,” jokes Hawthorn into his microphone as he swerves to avoid a cyclist at the beginning of the Mulsanne Straight, where his car could reach 185 m.p.h.

The 1956 race was won by a rival D-Type driven by Ron Flockhart and Ninian Sanderson of the privateer Ecurie Ecosse team of Edinburgh. That blue-liveried Jaguar is now the most expensive British car ever sold at auction, after a bid of $21.8 million with fees on Aug. 19 at RM Sotheby’s in Monterey, Calif.

“It sold for what it should have sold for, but it was a strong result,” said Steve Linden, a classic car collector and consultant in New York. He added: “It put Jaguar firmly in Ferrari territory,” referring to the five 1950s and ’60s Ferrari sports cars that have sold for more than $20 million at auction. “The fact that it had won Le Mans was a huge factor.”

By comparison, a heavily restored Jaguar D-Type that had also been raced by Ecurie Ecosse in 1956, but not at Le Mans, sold at Bonhams in London in 2013 for 2.6 million pounds, about $3.4 million. RM Sotheby’s more original Le Mans-winner, which had been in the same American private collection for 16 years, had been estimated to sell for at least $20 million. RM Sotheby’s two-day sale was one of five major classic car auctions that coincided with the annual Pebble Beach Concours d’Elegance and its satellite events in Monterey.

“It’s the most exciting group of auctions in North America,” said McKeel Hagerty, chief executive of Hagerty, a Michigan company specializing in classic car insurance. “The car world invades this small town by the sea. Every hotel room is booked, every parking spot taken.”

According to data supplied by Hagerty, the five major auction houses involved — RM Sotheby’s, Gooding & Company, Bonhams, Mecum, and Russo and Steele — raised a total of $339.7 million with fees from 1,273 lots over four days through Aug. 21. That represented a 14.4 percent decline on the $396.8 million grossed from 1,387 lots in 2015. This year’s overall selling rate of 58 percent was 2 percent down on 2015.

In recent years, classic cars, particularly Ferraris from the 1950s and ’60s, have gained a reputation as being a high-performing alternative investment. From July 2009 to July 2016, the Historic Automobile Group International Top Index of exceptional historic autos has increased 180.5 percent, representing a compound average growth rate of 15.9 percent a year. This year, values have advanced just 2.2 percent, according to HAGI.

“It’s a return to normality,” said Dietrich Hatlapa, the founder of the London auto group. “Double-digit growth has ground to a halt. It’s a simple supply and demand situation. The market inflated, which resulted in a lot of cars being offered. Buyers can take their time.”

But the rarest of the rare from that “golden age” of the 1950s and ’60s continue to command exceptional prices. RM Sotheby’s D-Type achieved the top price of the week, but the two-day auction also included the very first Shelby Cobra, which became a cult hit, if not overly successful name in 1960s American auto racing. Carroll Shelby, who won the Le Mans race in 1959 as a driver, built the prototype, inserting a race-tuned V-8 Ford engine into a British A.C. sports car, in Los Angeles in 1962. The car, offered in original, but drivable condition from the Carroll Hall Shelby Trust, sold for $13.75 million, a high for any American auto at auction.

“The first was clearly the best,” said Mr. Hagerty. “It was the star of the show. It had a unique place in automotive history. A car built by an ex-chicken farmer who won Le Mans.”

Ferrari, as ever, also had its say. Gooding & Company has made a specialty of selling the classic, road-friendly Ferrari 250 GT convertible. Its Pebble Beach auction on Aug. 20 and 21, which grossed $129.8 million from 137 lots, included a 1959 Long Wheel Base 250 GT California Spider Competizione, one of only five LWB California Spiders built with a lightweight alloy body. It sold for a low estimate $18.15 million.

But as the collector demographic shifts from baby boomers toward millennials, prewar cars are proving a more difficult sell. On Aug. 19, Bonhams could not find a buyer during the auction for a 1931 Type 51 Bugatti Grand Prix Roadster that had been owned and raced during the early 1930s by the celebrated British privateer driver Francis Curzon, the fifth Earl Howe. It had, however, been restored after the British driver Cyril Mervyn White died in an accident in the car in 1937, which put off some bidders. A buyer was found after the sale at a low estimate price of $4 million.

There were no takers at RM Sotheby’s for a 1908 American Underslung 50 HP Roadster estimated at $1.4 million to $1.75 million, one of five exceptional cars entered by the New Jersey collectors Sam and Emily Mann. But the Manns’ sleek 1939 Alfa Romeo 8C 2900B Lungo Spider did attract $19.8 million, setting an auction high for any prewar car. RM Sotheby’s smaller-than-usual sale of some 100 lots — the Portola Hotel venue was being renovated — raised $117.9 million, including after-sales. Its 2015 Monterey auction took in $167.2 million from about 150 lots.

“After everything going up every year, we’ve now had some adjustments and leveling off,” said Don Williams, a collector in California who has been buying and selling classic cars for 45 years (his Blackhawk Collection currently contains about 180). Mr. Williams added that the market was still strong at the top end, but the prices of more common, heavily traded models such as the Ferrari Dino and the many Porsche 911 variants — 12 of which will be included in RM Sotheby’s auction London on Sept. 7 — were facing downward pressure.

“It will be erratic,” said Mr. Williams. “But there are 10 to 15 times more collectors than there used to be, there’s more money around and the world is smaller.”

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