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Old 28th January 2005, 02:19   #1
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Default Putting The Hammer Down At Ferrari

NEW YORK - For car collectors, the Ferrari factory in Maranello, Italy, is considered hallowed ground. Nestled in a picturesque valley near Bologna, the plant is off-limits to all but Ferrari personnel, and to those handpicked, extremely wealthy collectors the legendary carmaker has deemed worthy of owning one of its finely honed machines. "Ordinary mortals cannot get into the Ferrari factory," explains Rick Carey, auctions editor of Car Collector magazine.

That will change on May 23, when Ferrari, together with Sotheby's (nyse: BID - news - people ), plans to host a first-ever auction of cars and related memorabilia at Ferrari headquarters in Maranello. Headlining the sale is the F2004, the winning Formula One car driven by Michael Schumacher in the first five Grand Prix races of 2004. Until now, the only way to buy a Formula One Ferrari was on the secondary auction market or through Ferrari's exclusive, four-year-old F-1 Clienti program, to which clients must be invited by the company.

The May auction appears to be something of a marketing coup, given the timing of other race-car-related events in that part of Europe. First, Ferrari and Sotheby's will preview the sale, on May 14 and 15, at the Fiorano test track, which is adjacent to the Ferrari Logistics Building where the auction will take place. Then on May 16, Bonhams holds its annual collectible car auction in Monaco. On the 19th, the Mille Miglia begins, a thousand-mile Italian road tour for historic cars scheduled to conclude May 22. Also on the 22nd is the Grand Prix in Monaco. Then it's an easy hop back up to Maranello for the Ferrari auction on the 23rd.

Ferrari hopes that the heat generated by all those events will fuel bidding at Maranello. Though the sale is still in the consignment stage, planned estimates are robust on the three lots announced so far. The Schumacher Formula One car is pegged at $1.8 million to $2.1 million, and a gorgeous 1958 Ferrari, the 412S, is estimated to fetch between $10 million and $12 million. If it does, it will smash last year's auction record for a collectible motorcar--$7.5 million for a 1929 Mercedes-Benz SSK, which Bonhams sold in September 2004 in Goodwood, England.

According to Jupiter, Fla.-based collectible car consultant William Kontes, who is working on the May 23 sale, cars have recently changed hands privately for more than $10 million. "The Sotheby's-Ferrari magic is a component of the estimate," explains Kontes, who guesses there will be a total of about 30 cars in the sale.

Michael Schumacher's Formula One car could bring in as much as $2.1 million.

But one car collecting expert, who knows the market well, doubts the 1958 Ferrari will bring $10 million. This particular car, he says, belongs to billionaire collector Rob Walton, who has been trying to sell it for the last 18 months and hasn't found a buyer. Kontes confirms that Walton has driven the car in historic races in the U.S., but refuses to comment further.

There is also a Maserati MCC12 factory car, which won Maserati's first victory in 37 years, at the 2004 GIA GT championship race at Oschersleben, Germany. The car is estimated to bring $1.6 million. Ferrari bought Maserati in 1997.

According to Car Collector's Carey, the market for top-end collectible racing cars, especially Ferraris, is healthy, and steadily growing. That hasn't always been the case. In the late 1980s, speculators flooded the exotic-car market and created a bubble, especially for late-model Ferraris and Lamborghinis, like the Lamborghini LP400 Countach that sold for $400,000 in 1990, only to change hands again in 1992 for just $100,000. The all-time auction record for a collectible car remains the $10 million for a Ferrari 250 GTO, fetched by Sotheby's in Monaco in 1990. Adjusted for inflation, that price would be $14 million today.

In 2004 the MCC12 factory car won Maserati's first victory in 37 years.

By the mid-'90s, prices settled back to earth. Since then, plenty of new, serious buyers have come on the scene. Ferrari sales have been especially strong. Not that there will be dozens of people vying for the F2004. According to Carey, there are only about a dozen collectors out there, Americans and Europeans, likely to make serious bids on that car.

For Sotheby's, the Ferrari auction is an intriguing move, given that the house's entire auto department jumped ship a decade ago and defected to Bonhams. Since then, Christie's, RM Auctions in Ontario and Bonhams have been the dominant auction players, along with Barrett-Jackson in Scottsdale, Ariz., which is holding a huge sale there on Jan. 25-30. Does this mean Sotheby's is back in the car auction ring? "We have made no decision or commitment for the future," says Sotheby's spokesman Matthew Weigman. "We saw a terrific opportunity here."
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