15 July 2013

Why didn’t the Mercedes-Benz W196 Grand Prix car sell for more?

After months of speculation, the hammer has fallen and an all-time record has been set for the most valuable car ever sold at public auction. The 1954 Mercedes-Benz W196 Grand Prix car driven to multiple victories by Grand Prix legend Juan Manuel Fangio netted $29.6M at Bonhams’ Goodwood sale, shattering the $16.4M record previously set by a 1957 Ferrari Testa Rossa at Gooding’s 2011 Pebble Beach sale.

It was an impressive result, to be sure; however, it leaves some scratching their heads and asking why it didn’t sell for more. After all, this car is essentially one of one. The opportunity to acquire a Mercedes Grand Prix car of this era with this level of provenance and history is if not a once-in-a-lifetime opportunity, certainly a once-in-a-generation opportunity. Few pre-war Grand Prix cars survive the War intact, and post-war cars are similarly rare since Mercedes-Benz withdrew from racing following the 1955 Le Mans disaster.  It’s not lost on most market observers that a Ferrari 250 GTO without a significant competition history might be expected to break $30M and perhaps even $40M, and Ferrari made almost 40 250 GTOs.

The difference is the usability factor. Noted collector Miles Collier has called the W196 a “contemplative object,” meaning that it is the ultimate “velvet ropes” car. The cost and risk associated with using the car are simply too great to bear, even for someone with the resources to acquire it. Like most competitions cars, the W196 has a highly stressed powerplant designed to hold together for a limited number of hours. The cost of overhauling such anengine is truly frightening. They run on specialized fuels and require a support team just to put on a few exhibition laps at a circuit. The Ferrari, on the other hand, is docile enough to be used on the street — you could pick up your kid from school in a 250 GTO if you were so inclined.

When the final price of the W196 was announced, many observers pointed to the symbolic aspects of the sale and whether it would answer the question of what matters the most at this level of collecting: history, rarity and provenance alone or history, rarity and provenance combined with usability. The latter seems to be the answer.

7 Reader Comments

  • 1
    art Allison Park, PA July 17, 2013 at 16:41
    A wonderful car indeed but, at that stratospheric price, one ought to at least enjoy driving it a bit. Anybody that had the price should surely be able to take lessons on how to properly drive it and can afford whatever repairs, maintenance and support team it requires. My 41 year old BMW Coupe is gorgeous but it gets driven and I don't panic over a few unavoidable nicks and scratches she picks up on the road. She is not a museum piece and I bought her for people to look at and for me to drive. In any event, as much as I love and appreciate cars, I can think of a dozen ways that are better and more useful to my country and the world to spend $29.6 million, if I had it. Maybe the new owner has a billion or so on top of that and puts it to good use.
  • 2
    Steve Remington Santa Barbara, CA July 17, 2013 at 19:07
    The Indianapolis Speedway Museum exhibited a Mercedes-Benz W196 1954/55 championship car in 1995. The car carried a number "16" on bonnet and no number on side. Is this the same W196 that recently sold at auction?
  • 3
    Kim Indy July 17, 2013 at 19:15
    These beautiful objects are not really cars anymore, they're curio's for the ultra-wealthy to acquire. Caretaking them is akin to building it in the first place, and the factory had resources and motivations well beyond those of even the most of those currently with less-than-modest means...I read a story recently that referred to a collector car as "arcane", not unrealistic if one isn't familiar with the W196 history, it's desmo valve train, and magnesium parts when they were near unobtanium. I've been fortunate to travel to the Benz museum in Germany and see these cars up close, thankfully they still stir enough in the soul (and wallet) of people who still "see" their significance even if they don't drive them...A professional race driver friend of mine has been kind to let me work on and drive his vintage sprint cars, wonderful because the injected small block burns methanol and sounds and smells great, especially from behind the wheel...and by comparison they're downright practical...this sport has many "layers" and I'm thankful for them all...
  • 4
    CJ Madson Northern California July 18, 2013 at 20:40
    Very interesting point, and plausible. Before the auction I thought this would go for crazy money, and certainly all of the top-level collectors would have known about it. So for those of us who believe that a Real Car should be seen and heard moving under its own power, it is encouraging that even those at the lofty heights of CollectorVille seem to agree.
  • 5
    Mtdesign Flagstaff, AZ July 20, 2013 at 13:15
    I saw Fangio in the mid-80s drive a similar car at Laguna Seca Historics when they were affordable to go to. He was directed by a new Mercedes convertible with a camera man in front of him. They did a few laps and Fangio kept pushing the camera car until it spun out in front of him. With the Grand Prix car and a full open track Fangio got on it and did at least two laps while ignoring the black flags. They were scared he would wreck the car since he was now in his 80s. I ran down to the pit afterwards and saw in come into the pits and get out of the car with a big smile on his face. I still have that picture in slide form.
  • 6
    Brent Toronto July 21, 2013 at 07:57
    Interesting perspective on value. Also of interest would be knowing the identities of the buyer and seller (or at the very least what countries they hail from). Rob, any insights on that?
  • 7
    Martin Rudow Seattle August 1, 2013 at 10:28
    My old friend Pete Lovely once remarked upon being asked why he would risk his valuable TR in a vintage race that, "you really can't do much more than $50,000 damage to a car". I wonder how that comment holds up today?

Join the Discussion