First ever Porsche fails to sell at auction

Repercussions from the failed sale of the so-called “First Ever Porsche” – the 1939 Volkswagen Type 64 – at RM Sotheby’s in Monterey continue to be felt. If you missed it, the short version of events is that a mis-hearing of what was being said led to ridiculous numbers on the price boards and the car failed to sell. Others see things in a different light.

Auctioneer Maarten ten Holder opened by saying that Sotheby’s had an opening bid of $30 million. The screens were duly set to this. As Maarten called out the bids, the numbers on the screens (facing away from the auctioneer) went up in $10 million increments until the podium displays read $70 million, at which time the auctioneer said the bids were in fact at $17 million and the numbers should be corrected.

From videos of the sale, it is clear that Maarten is actually going up in increments of $500,000 from a start point of $13 million, and not ten million from a start of $30 million. However, the strongest criticism has come from claims of shill or chandelier bidding, where the auctioneer is increasing the numbers with no bids actually received. Auction watchers are calling this shady and pointing the finger at dishonourable conduct.

Bid Running at Auction

I am not presuming any guilt here, and there is no issue at my end. Anyone who thinks that this is unusual conduct at auction needs a reality check. The best auctioneers all make their reputations through generating a fever and driving bidders to ever-greater heights: the practice is known as running the bids. Having bought hundreds of cars at auction in my career as a retail car buyer, I have had the bids run on me more times than I care to imagine. It is part of the auction process.

I don’t remember one auction from the hundreds I’ve attended over more than thirty years in the motor trade where something that clearly was not worth the space it was taking up went for a higher price than expected. I have written several magazine columns about this crazy phenomena.

Private Buyers and Auction Prices

It usually happens when a private buyer comes along who has never been to auction before and the bids are run up to private sale money for a car sold as seen without prior approval. While it makes no sense to buy a car at auction without any sort of test drive, and pay the same price as one would from a bona fide private seller with a test drive before purchase, the practice is just as commonplace today as it ever was. Car auctions are not the best place to learn how to bid.

One type of auction where bid running was less common back in the pre-Internet days was disposal sales, where the auctioneers were getting a fixed price, regardless of whether items sold or not. This included Police and Lost Property sales held all over London and trade disposals, such as the old sales hall at Dingwalls in Croydon; probably now demolished to make way for a retail distribution centre. I bought a stack of cheap cars at London disposal sales in the late 1980s and early 1990s and they came at exactly the right price.

Contrast this to a job lot of cars I bought at a well-attended Colchester sale around the same time. This was a job lot of ex-Tesco fleet cars in the colours of the Tesco logo (all non-metallic red, white and dark blue) and I paid well into book for all of them. They were all presented in good condition, ready to be sold, so I knew I could make a profit on the lot, but the auctioneer made it bloody expensive for me. I never went back there again.

Likely repercussions for the Type 64

“Once bitten, twice shy” will probably affect some reputations for a while, but all auctioneers will feel Maarten ten Holder’s pain. The car was already cooling off after Porsche took the unusual step of publicly denying any special Porsche provenance for the Type 64, over and above its undeniable importance as one of the early VW-based racing cars built by Ferdinand. It was down to ten Holder to do his job and get things cracking in the hall and he had a good go. The problem with the numbers turned things into a bit of a joke, but did he really get the bids?

Before the sale started, the car had already been offered to everyone who was likely to buy it and all had refused at the asking price. Bids supposedly went to $17 million in the tent, but the car is still listed as being for sale. It is clearly worth buying, just seemingly not at that price.

The car now sits in storage in California, where its market value has been described as “f**ked” by people who should know a bit better. The truth is that good collectors are switched-on investors who get into this for the long term. Their experience and love of a deal makes then savvy and open to taking a risk. There is no doubt in my mind that the most up-for-it vultures are already circling above the Type 64.

The scandal surrounding the car and its first trip across the block has added to its story and therefore its appeal in certain quarters. Commentators who put a pre-sale value of up to $5 million on it may eventually learn that the car has changed hands privately for more than this: it would not surprise me one bit. It depends on the mindset of the owners: if there’s a lawsuit pending, then all bets are off.

The car is unique with exceptional early year history. I value it higher than $5 million and, if I had the money, I would be making enquiries and trying to inspect it in person. It’s an interesting story and perceived long term value of these things is all about the story. If you don’t already know this, you will never make a good auctioneer!

Photo by Jack Schroeder ©2019 Courtesy of RM Sotheby’s