Ferrari Mailing List: NY Times - "A Few Raindrops Fall on the Big-Money Collector Car Auctions in Arizona"

[Dennis Liu (bigheaddennis]

http://www.nytimes.com/2007/01/28/automobiles/collectibles/28AUCTION.html

Collecting
A Few Raindrops Fall on the Big-Money Collector Car Auctions in Arizona 

By KEITH MARTIN
SCOTTSDALE, Ariz.

IN most circumstances, selling a single used car of nearly any type for
$85,595 would be cause for celebration. Selling 1,916 at that average price
over six days, for a total of more than $164 million, would be a reason to
start popping Champagne corks.

But under unusually rainy skies this month in Arizona, sales figures at four
collector car auctions indicated that the red-hot market was cooling a bit. 

In contrast to the transparency of the stock market, where billions of
shares are openly traded every day and the results are published
immediately, there is an opacity to the collector car market. Many cars,
especially the most significant ones, trade privately for undisclosed
prices.

Only twice a year are large car auctions held at the same time in the same
area. Each August, it happens on the Monterey Peninsula of California, where
five auctions take place. The other market barometer comes in a single week
of January in the Phoenix area. Four companies, each with a different focus,
put their consignors' wares in front of thousands of bidders.

After peaking in 1991 and then collapsing, the collector-car market had been
slowly gathering strength for five years. Sales figures for the
Barrett-Jackson auction here, the largest in the world in terms of dollars
spent, tell the tale. Barrett-Jackson had vehicle sales of $37 million in
2004, $62 million in 2005 and $98 million in 2006. 

But just as with dot-com stocks or Miami condos, values cannot rise forever,
and the sales results in Arizona indicated that the market's meteoric climb
may be ending.

While the prices of some types of cars remain strong, primarily
low-production muscle cars with their original engines ("numbers matching"
is the trade term) or sports racing cars like Ferraris, other more common
cars produced in larger numbers, or cars whose engines have been replaced,
are holding their values, at best.

In a response to questions sent by e-mail, Steve Davis, the president of
Barrett-Jackson, said, "The strongest overall segment of the market is the
interest in certain muscle cars, such as Boss 429s and specific Shelby
GT500/350 Mustangs." He added, "Austin Healeys, Mercedes 300SL roadsters and
Gullwings currently command top dollar, and there is also an increased
interest in the classic segment of the market."

For two of the four auctions, sales were down slightly from a year earlier.
While Barrett-Jackson showed an uptick to $109 million, that figure included
an added sales day and 187 more cars. The average price per car at
Barrett-Jackson was $92,301 in 2006; this year, it was $87,001.
Barrett-Jackson also had by far the largest field, with 1,271 cars both
offered and sold.

While Barrett-Jackson specializes in American muscle cars from the '60s and
'70s, RM Auctions of Blenheim, Ontario, features mainline collectibles like
Duesenbergs and Ferraris. RM offers far fewer cars than Barrett-Jackson, but
has a much higher average price per car. RM sold 106 out of 114 cars offered
for a total of nearly $30 million. This was down $1.4 million from 2006, and
the average price per car ($281,838) was down $13,382 from a year earlier.

In an e-mail message, RM's president, Rob Myers, said, "We see sports racing
cars as the strongest growth segment of the market and also keep an eye on
the great antiques and classics that will continue to be strong."

Another auction company, Russo & Steele, is known for muscle cars. Russo &
Steele raised its total slightly from 2006, selling 280 out of 431 cars for
$20.2 million, up from $19.8 million. The company's owner, Drew Alcazar,
said that while well-documented cars were still strong, customized cars and
nonoriginal creations had started to show weakness. 

The average price per car sold at Russo & Steele was up, from $66,318 in
2006 to $72,213. 

The final event of the weekend, by Silver Auctions of Spokane, Wash.,
reported sales of 276 cars for about $5 million, down from $5.7 million and
233 cars in 2006. The average price per car sold this year was $18,116,
indicative of the "affordable classics" market segment in which Silver
specializes.