Accelerative assets: Classic cars as investments

With the resumption of physical auctions and money in the pockets of potential buyers, classic car investment looks increasingly attractive, reports Jon Wall from Hong Kong.

A few weeks ago, I was invited to the inaugural event of the official Ferrari Owners’ Club of Hong Kong. It was a petrolhead jamboree attended by a host of local ferraristi, many of whom turned up with at least one of their cars.

Lined up outside The Repulse Bay were a Dino 246, 308, 430, 458 and 488, not to mention the current Roma, F8, SF90 and 296 GHTB – all gorgeous automobiles, though not a patch on the true stars of this get-together: a GTB/4 and 330 GT from the 1960s, an F40 and F50 from the 1980s and ’90s respectively, a LaFerrari from the last decade and, all three pretty much factory-fresh, a pair of limited-edition Monzas (an SP1 and an SP2) and an 812 Competizione. Most exalted in this pantheon of Ferraristic greatness, however, was Hong Kong racing driver Jonathan Hui’s 1962 250 GT Berlinetta SWB – a machine so perfectly proportioned, it must surely be counted among the loveliest sportscars ever built.

This 1962 Ferrari 250 GT SWB Berlinetta is one of only 175 examples built

Along with a friend, I began totting up the cumulative value of the machinery arrayed before us, but after counting just seven of them and already reaching a figure in excess of US$21 million (S$29 million; and we agreed our total was likely conservative in the extreme, especially as no Ferrari Monza has yet been offered at auction), we stopped. We needed no further evidence that not only is the appeal of collecting exotic cars as compelling as it’s ever been, but that even in a place as small as Hong Kong, serious money is tied up in investible autos, both old and new.

A look at the global classic car market does little to dispel that view, even if the past two tumultuous years of pandemic haven’t been quite as robust as those of the heady mid-teens. Granted, in 2020 to 2021, the Hagerty Ferrari Index (which tracks, in stock-market style, the value of 13 collectible models made by the Italian manufacturer in the ’50s and ’60s) more or less flatlined at a little over US$6 million, as opposed to its early-2016 peak approaching US$9 million.

1955 Maserati A6G/54 2000 Spyder from the Oscar Davis Collection

But the relative sales slump forced by lockdowns and other restrictions has left money in the pockets of those with the wherewithal to spend it, not to mention the fact that many among the super-rich grew even wealthier over the same period. No wonder, then, that this year’s return to physical car auctions in the US and Europe has been accompanied by a palpable resurgence in demand and a similar trend in prices.

A clear indication can be seen in the annual January car auctions in Arizona, which racked up total sales of US$266.7 million this year – a 20 per cent increase over 2020, with the highlight of the week being the 1955 Mercedes-Benz 300SL Alloy Gullwing sold by RM Sotheby’s for US$6.825 million.

Two months later, the sales by Bonhams, Gooding & Company and RM Sotheby’s at Florida’s Amelia Island jointly achieved revenues of US$125 million, with Gooding making a record US$66.5 million from its roster of classics. Among the latter lots were a 1937 Talbot-Lago T150 Teardrop Coupe, which went under the hammer for more than US$13.4 million, and seven other important collectors’ pieces – a Bentley, two Porsches, two Ferraris, a BMW and a Toyota (to be exact, a 1967 2000GT race prepared by Shelby, which became the Japanese automaker’s most expensive auction sale ever) – that each realised more than US$2 million.

Those numbers, however, look like chicken feed when compared with the fabulous figure achieved in late May by RM Sotheby’s after it was approached by Mercedes-Benz to sell just one car. The result of that request was an auction open only to an elite
group of collectors and friends selected by the German company, and staged in near-secrecy, the outcome of which was
the sale of one of the only two fabled 1955 300SLR Gullwing Coupes – a racing car specially adapted for road use by Mercedes’ equally legendary engineer Rudolf Uhlenhaut – for a staggering €135 million (US$142 million).

Not only did that make this Merc the most valuable automobile of all time – and by a country mile – but also one of the 10 most expensive items ever sold at auction. It is up there in the exalted company of Leonardo Da Vinci’s Salvator Mundi, Picasso’s Les Femmes d’Alger and the Oppenheimer Blue Diamond.

1967 Porsche 911 “Rally” Coupe

To put that in an automotive perspective, those numbers are around double the rumoured US$70 million paid in a private sale for a 1963 Ferrari GTO in 2018 and almost three times that for another GTO sold by RM Sotheby’s in the same year for US$48.4 million. Will that Mercedes sale open the door to other cars changing hands for nine-figure amounts? I have a hunch it won’t take too long for us to find out.

Of course, you don’t need nine, eight or seven figures to begin collecting, although you should at least have some idea of what to look out for. Assuming you do decide to take the plunge, you obviously need somewhere to store your investment securely and in the right conditions, as well as to maintain it professionally so that, at the very least, it retains the value you paid for it. All that will involve further considerable outlay, as well as the cost of insurance, which can be astronomic.

The most expensive car in the world – this fabled Mercedes-Benz 300SLR Uhlenhaut sold for €135 million (S$197 million) in May

But with the market fast returning to a state increasingly resembling normality, investment opportunities are plentiful. Between August 18 and 20 this year alone, California’s Monterey area will host five major sales for collectors from around the world. They are headed by Bonhams at Quail Lodge, Gooding at Pebble Beach, and RM Sotheby’s at Monterey Convention Centre. The RM Sotheby’s auction includes 22 automobiles from the collection of the late Oscar Davis, who died last year aged 95. While serving with US forces as a young man towards the end of the Second World War, Davis had become besotted with European cars, and after making a fortune in the swimming-pool business, he ploughed millions into collecting them.

The cars offered from the Davis collection feature a 1938 Talbot-Lago T-150 Teardrop that, like the similar model sold earlier this year, can be expected to go for eight figures; five Bugattis from the ’20s and ’30s; four Alfa Romeos from 1930 to 2009; a trio of ’50s and ’60s Ferraris; and a further three ’50s Maseratis – all the way down to a delightful Fiat 508 Balilla Spider Sport conversion by Kelsch (a niche lot that may have the advantage of being ever so slightly affordable).

At Quail Lodge, Bonhams has also assembled a stellar line-up of lots, including a 1928 Mercedes-Benz 26/12/180-S-Type Tourer (this particular car last sold at auction for almost US$5.4 million), a 1937 Bugatti Type 57C, and a 1969 Lamborghini Miura offered without reserve. At the lower end of the price range sit a no less desirable 1965 Alfa Romeo Giulia GTA 1600 and a 1967 Porsche 911S, both exquisitely restored and fully documented.

Among Gooding’s Pebble Beach offerings are two humble though concours-immaculate VWs: a 1962 Type 2 Microbus with opening split front windscreen (a model that these days can command prices of up to US$100,000) and a 1967 Beetle, as well as the classic early-’30s Americana epitomised by a 1930 Cadillac V16 Roadster.

No investment is absolutely safe – prices can and do go down as well as up, and with an automobile, which by definition you’ll want to take out on to the road now and then, there’s always the additional risk of driving your treasured possession into a tree, or even worse. But if you can afford all the above and your collection forms part of a diversified portfolio, there’s an awful lot to be said for an asset class that’s shown an ability to appreciate better than many others.

And if, by some fluke, that Talbot-Lago Teardrop you shelled out millions for does suffer a dip in value, well, you’ll have even more time to feast your eyes lovingly on one of the most beautiful moving objects ever made by man, as you wait for the market to correct.

This story first appeared in the July 2022 issue of Prestige Singapore.

Top image: Ferraris from the 1960s to the ’90s line up at the Repulse Bay in Hong Kong

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