There were 98 Porsches auctioned at Amelia Island. Where’s the tipping point?
Even toddling lemonade stand entrepreneurs know the law of supply and demand—it’s the one common economic principle all buyers and sellers can recite. And with a healthy 20 percent of the 493 cars offered at Amelia Island this year being Porsches, it is completely understandable that auction goers were wondering aloud how the flood of Stuttgart supply would impact prices. Are 12 993s too many? Would there be enough buyers to absorb 13 356s? Is eight 930s the Goldilocks number?
In general, the marque did well enough to suggest that 98 Porsches wasn’t overkill for three days of auctions, at least at Porsche-friendly Amelia Island. The 90-percent sell-through rate for all Porsches at the three major auctions was one point higher than the overall rate seen across those same auctions, and the final sale price for Porsches at those venues averaged 6 percent above the low estimate. Four of the top ten sale prices for the week were Porsches, and if anything, it appears even more 911s could have crossed the block without a significant drop in demand.
This subject is familiar ground at auctions. Take 2014 as an example, a year in which rapid appreciation coaxed twice as many Mercedes-Benz 300 SLs to the Monterey auctions as would typically be expected (17 vs. 8.5). This ultimately proved to be too many, and the sell-through rate for Gullwings and Roadsters that week was more than 13 percentage points below what it had been heading into August. And despite a hot market for 300 SLs the prior 12 months, the median bid was only slightly above where it landed the year before. The oversupply allowed buyers to be extra choosy, and many more cars failed to find a home as a result. Sales weren’t depressed for long, though, and the 300 SL market continued apace once the available supply dwindled.
So why didn’t Porsches suffer the same fate as those 300 SLs in 2014? One reason is that Amelia Island has a captive audience when it comes to Porsches. The Porsche Club of America’s Werks Reunion draws thousands of marque enthusiasts to one zip code, amping up the number of potential bidders chasing after the same car. Another reason is that even though there were a lot of Porsches, there was still a lot of variety within the marque.
For example, among the many 993s there were only two RSs and three GT2s, and not many more of those models are readily available outside of the auctions. Rare specifications, unique colors, and low mileage readings also helped winnow down the many choices into a more modest supply. In all, six of the seven 993s at the catalog auctions sold, and only one of those sold for below its low-end estimate.
As Enzo Ferrari was well aware, no matter the quantity of an object of desire, the crucial point is that there only needs to be one fewer than people want in order to keep the market singing. In Florida this past week, it looks like the market demanded at least 99 Porsches.