RM Sotheby’s, known for its precision sales execution, flubs a big sale—but that’s not the big news from Monterey
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16 Going on 70
By now you’ve surely heard about the Porsche Type 64 sale that was meant to produce the highest price ever achieved for a Porsche-designed classic car but ended up making the well-run RM Sotheby’s auction house the butt of news reports on CNN, CNBC, Inside Edition, Bloomberg , the New York Times and dozens of other news outlets around the world.
As the video above shows, we’re posting it here because it has the clearest recording of the Dutch-born auctioneer’s voice as he calls out thirty, forty, fifty, sixty and seventy million dollar bids when he probably meant 13, 14, 15, 16, and 17 million dollar bids. His pronunciation is clear enough even if alternating those round figures with bids of $500,000 implies he was thinking of bids in the teens.
The blunder is so captivating because it inverts the common fear that an auction spectator might accidentally get caught up in the bidding and be on the hook for a bid they cannot afford. Here the auctioneer’s excitement belies his reference points as he bids the car up to the reserve price. That’s usually a tempered process as the auctioneer seeks to gain the confidence of bidders and reassure them that others will value the lot at a much higher price. Instead, the auctioneer seems to get caught up in his own confusion shouting incredulous $500k increments.
To those who view the market for tangible property as deeply suspicious, this auction only confirms the feeling that these markets are manipulated. But there is no evidence that RM Sotheby’s had anything to gain from this debacle and will suffer nothing but outsized embarrassment from its notoriety. The fact that Sotheby’s was the setting for Banksy’s own auction-mocking stunt two years ago only added to the notoriety.
Far more significant for those interested in the markets for cultural property is how quickly the classic car market came up short. This year’s cycle of sales in Monterey timed to attract the crowds attending the prestigious Pebble Beach Concours d’Elegance was off a third from 2018’s total. In 2018, the sales total was $370m. This year the figure fell by $125m.
Although a substantial $245m worth of classic cars were sold to buyers in 2019—nothing to discount but hardly the $378m total some hoped for. The overall sell-through rate for the auctions was down 4% from 62% in 2018 with an average lot value of $436k in 2018 and just $319k this year.
The sales clearly came up very short with much of the weakness at the very top of the market. Hagerty, the classic car insurer who tracks sales results, says the sell-through rate on cars over $1m was a mere 42% when it had been closer to 55% for the preceding seven months of 2019.
The top lot of the week was a McLaren supercar that made nearly $20m but that was 15% below the price hoped for. The place where the market remains strong is among entry-level cars priced below $75,000; and the competition for cars built in the 1980s is beginning to heat up as a new generation of buyers begins to hanker with nostalgia for the days of Duran Duran. The website Bloomberg says,
“Collector cars from the 1980s with a low-bid estimate of at least $250,000 are making a comeback this year,” says John Wiley, the valuation analyst for the Hagerty Price Guide. “After falling to just 12 offered in 2018, 21 are for sale this time around.”
These shifts seem to track what has been happening in the art market. There’s an overall shift to more recent and cheaper works by younger artists just as there is now demand for cheaper cars of a more recent vintage. That and the top line numbers are down substantially too.