Page last updated at 00:00 GMT, Tuesday, 4 November 2008

Classic car sector hits bumpier road

By Will Smale
Business reporter, BBC News

1967 Ferrari 275 GTB/4 Berlinetta
The cars were all lovingly polished

The rapid-fire delivery of the auctioneer was almost hypnotic.

"Do I hear 133?! 132, do I hear 133?!" he said, faster than many of the supercars going under the hammer.

"132! 132! 133 anyone?! 133?! Going at 132?! Going at 132?!... Sold at 132,000!"

With 99 classic cars up for grabs, the Automobiles of London auction was at times not a place to stick your hand in the air, unless you had very deep pockets.

In fact, with two vintage Ferraris both making 2.26m, it was often not a place to nod your head, raise your eyebrows, wink, or even cough.

With a good few thousand people attending the glitzy event at Battersea Evolution arena in south London - and 60 more mystery bidders phoning in their offers - there didn't seem to be any shortage of wealthy individuals happy to bid serious money.

But with a recession seemingly on the way in the wider economy, is the classic car industry now starting to stall?

Automotive history

With a third of the cars on display at the auction, the temptation to buy was immense.

Take a closer look at some of the cars on show at the auction

All lovingly polished to a lustrous shine, it was a gleaming trip down many of the highlights of automotive history.

There were Rolls Royces, Bugattis, and Bentleys from the 1920s and 30s, Aston Martins from the 50s, Ferraris from the 60s, and Jaguar E-Types from the 70s.

You couldn't move for curves, chrome, and swooning classic-car enthusiasts who, mostly men, appeared to come in three distinctive types.

Firstly you had the super-posh, middle-aged to elderly set. Dressed in tweeds and cords, they looked as if they owned half of Hampshire and were not too distant relatives of the Queen.

Then you had younger, brasher men, both from Britain and abroad, who appeared to have made a killing in the banking sector before all the recent unpleasantness.

Both these two groups seemed happy to have a spend.

Finally there were the "anorak" car obsessives of all ages, many of whom couldn't afford to make a bid, but were more than happy to pay the 50 entrance fee just so they could see some of the automotive dreams up close.

Recession proof?

David Wellden, 63, of North Wales, who owns a vintage Bentley, said he had come for the nostalgia rather than to make a bid.

A classic car is just like a Picasso on the wall - it doesn't lose half its value over night - it's not like stocks and shares
Max Girardo, RM Auctions' European managing director

"It's a chance to see some of the cars I remember from my childhood," he said.

But did Mr Wellden think the credit crunch was hitting the classic car market?

"No I don't think so, some car collectors are so rich it just doesn't affect them."

Mark Franklin, 44, of Hertfordshire, agreed.

"I would say that some of the people here today have so much money that they are pretty much unaffected by the credit crunch," he said.

"If you can spend 2m on a car, they aren't really worried about a recession."

However, not all the cars up for sale were expensive.

While the 1965 Ferrari 250 LM Berlinetta and 1959 Ferrari 250 GT Tour de France Berlinetta sold for 2.26m, and the McLaren F1 made 2.53m - an all-time high for that car - one lucky bidder picked up a 1935 Lancia for 9,000.

You could have even got a 1954 Fiat for 2,750.

Unsold cars

Yet after a marathon seven hours of auctions, there were signs that the wider global economic woes are starting to bite in the classic car industry - just under a third of the vehicles failed to sell after not meeting their reserve prices.

Bentley R-Type Contental Fastback
The auction was a trip down memory lane

Ones that didn't sell included a 1968 Ferrari Berlinetta, which had been expected to make at least 750,000, and a 1924 Bentley that had been predicted go past 600,000.

Mike Goodbun, deputy editor of Classic Car Magazine, said the 30% unsold figure was quite a bit higher than it would have been a year ago.

"It wasn't unexpected or a bad result given the wide economic situation," he said.

"But it is all about timing, and people are now spending less."

Terrance Lobzun, communications director of the event's organisers, Canadian group RM Auctions, said he was "quite elated".

"Overall we are very pleased," he said.

"Obviously due to the current economic climate there was some caution beforehand, but we broke a record with the sale of the McLaren F1 and there were some other very high prices.

"This will be good for the rest of the industry, as it shows the resilient strength of the market - great cars will continue to attract great money.

"Yes there were a few missed estimates, but that is fairly normal in any auction."

While the price of the more desired or rare classic cars can continue to go up, Max Girardo, RM Auctions' European managing director, said people bought such automobiles for love not for financial gain.

"But at the same time a classic car is just like a Picasso on the wall - it doesn't lose half its value over night," he said.

"It's not like stocks and shares."

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