Original article from Old Cars' January 16, 2016 issue
Kraman enjoys ringside seat
This year, Mecum Auctions will have seen around 15,000+ vehicles cross its auction block over the course of 13 auctions across the country. With an average of more than 1,000 vehicles per auction, John Kraman, Mecum Auctions’ consignment director and TV commentator/analyst, is well positioned to spot trends in the collector car and truck hobby.
Old Cars spoke with Kraman and he shared the types of vehicles that are getting the most bidders’ hands in the air, and a little bit about the bidders themselves.
OCW: How long has Mecum Auctions been in the industry?
JOHN KRAMAN: This has been a very long evolution of this company, starting all the way back to 1987 with the Mecum family operating from their dining room table. This company has gone from very humble beginnings. Now we are the undisputed largest [collector car] auction company by a country mile.
OCW: What is Mecum Auctions’ specialty?
JOHN KRAMAN: Our DNA began in muscle. Mecum started out tapping into the early performance
car market, primarily muscle cars and Corvettes, and that continues to be a real big part and may still be the core. But as we have grown over the years, we have started to go into many related and unrelated segments: The increase in popularity of collector cars of the ’70s, ’80s, ’90s and even contemporary performance cars; the exotics from the modern era, even current-generation cars like the Ford GT, and the current darling, the Challenger Hellcat, is getting all the attention. I believe we have sold 12 or 15 of those cars this year at our auctions.
Other new markets that have popped up are vintage pickup trucks, both original and restored and heavily modified. It’s a market that has really gained strength and there is no end in sight.
The European exotics, which were not really a part of what we do, have become an extremely big part of what we do. At our last auction of the year, the upcoming Austin, Texas, auction, it will be fun to see the results of that, but of the 12 auctions we have had so far this year, a European exotic has placed in the top 10 (high sales) at eight of our auctions. Not just vintage Ferraris and Lamborghinis, but modern ones as well.
The growth of our events and our TV coverage is unsurpassed as well. It has really allowed us to stretch our wings. Now we have the aptitude, interest and sales success. Sellers are recognizing us as being one of the great places to sell a car.
We are a very large, very highly attended auction, and that does allow us to put a reserve on our consignments. It is not comfortable for some sellers to operate down that road [without a reserve]. We are looking at that 15,000- car target in our sights and we may get real close to that number by the [Austin sale].
OCW: Does that 15,000-vehicle figure represent the total number of cars to cross the Mecum auction block this year, or only those that have sold this year?
JOHN KRAMAN: The total number across the block. Our sell-through averages somewhere in the 65 percent range. Any time you are over half [sell-through], you are doing pretty good. Typically, we run stronger than that. We do publish all of those individual results. One of the factors is we are the guys that do allow reserves and we encourage them.
OCW: What recent trends have you seen in your customer base of consignors and buyers?
JOHN KRAMAN: From the consignor standpoint, there is a brand new awareness of certain and select cars from the 1970s and 1980s as non-baby boomers become interested. There are not a lot of great cars in that era, not a lot of legendary cars, [but those that are] transition generations well. The 1970s were a low point but there are some glimmers from cars of that era. The Pontiac Trans Am of the decade: I think about 100,000 were built in 1979, and that had a lot had to do with interest in Smokey and the Bandit, but there weren’t a lot of other great choices that blended an image of performance plus handling and braking. They are very strong.
The Buick GNs and the Buick GNX are the darlings of that era. Those cars get massive amounts of attention at auction. They are getting a lot of attention from buyers. The buyers are definitely transitioning. There are many more buyers, a lot more buyers starting in their mid-to-late 30s to the 40s and 50s. They have an interest in cars of that era and cars that have been pro-toured. Anytime you can take a legendary vehicle from a bygone era, typically the reality of that car may not match the legend. So many companies are offering engine and transmission and braking upgrades from modern cars. It is generally a slightly younger buyer who is going to go after that. A boomer buyer may be interested in keeping his car original because that’s how he remembered it, but a young buyer is looking for the modern upgrades.
OCW: What trends have you seen among the cars that have crossed the block? What’s hot, what’s not?
JOHN KRAMAN: There are a couple of cars that are not [hot] in the vintage world. Mercedes-Benz and Porsche [are hot]. There’s a tremendous interest in 1950s and ’60s Mercedes, and any air-cooled Porsche 911 has re- ally started to get a life of its own. The hard-core Porsche aficionado is seeking out mid-1990s air-cooled Porsches and the prices have started to go really strong really fast.
The 300-series SLs doubled in value in a couple years — from half a million to a million dollars. A rising tide also raises ships, and some of the lesser Mercedes-Benzes from the 1950s and ’60s saw a similar percentage increase as the significance is being recognized by those buyers. Same with the air-cooled Porsches from the 1960s to the mid 1990s. The 356 (Porsches) are also seeing some big jumps in price. Our Monterey auction had a gigantic supply of vintage Mercedes-Benzes and Porsches crossing the block and all did very well.
More appealing to the value-conscious people are the same cars that have been shifting in interest. The run-of-the-mill prewar cars. The luxury prewar cars, the Packards, the Pierces, the Cadillacs from the 1930s still command big prices. They are still the gold standards.
You get into the Chevys and Fords of the teens to the 1930s and they have flat lined in price. They remain surprisingly affordable if you want to stick with something that is not modified and in
a lesser body style, but some of these 1920s and 1930s four-door antiques, they are considered beautiful and they were beautifully restored 20 years ago and they remain fun to tool around in. While they haven’t had the same transitional jump from which we are seeing a trend from the nostalgia buyer, they are antiques, but there is no image.
By the time the 1950s rolled around with the flash, the rock ’n’ roll songs, the image of that time, all conspired to keep those cars, in my mind, very high on the visibility scale of a younger buyer. Maybe it was the parents that lived that era and talked about it; that, I think, really has wore off to younger buyers. In almost any country music video, there is almost guaranteed to be a 1950s car or pickup in it.
OCW: Do buyers prefer stock or modified, import or domestic?
JOHN KRAMAN: There was a point in time, I can’t pinpoint it, but about 10-15 years ago, any vintage car, with exception of prewar cars, there was definitely kind of a snob attitude toward the modified Corvettes, 1957 Chevys, Mustangs — you modify it and you have ruined that car. That definitely has changed. It definitely is an acceptable part of the collector car world.
A guy might have a show car in his collection that is museum-worthy and a similar car that has been upgraded with modern components: air conditioning, power everything. It is much more accepted than it used to be... the resto-mod cars do get a tremendous amount of attention at auction, and the younger buyers do tend to lean toward the modified cars. Guys from the 50s on up seem to gravitate to the cars restored more to stock condition, but there is crossover both ways.
OCW: What eras are buyers looking for, and are they looking for drivers or show queens, or even barn finds?
JOHN KRAMAN: It’s actually one way or the other. We have had success with a car defined as a barn find, completely untouched in any way. It is still in pretty good condition. It is not a complete piece of junk and it’s not rotten. But there are two extremes: there are those who do like those cars that haven’t even been washed. It has 20, 30, 40 years worth of dust and bird poop on it... we have had good success with those cars.
That is definitely unusual, though. An auction buyer [usually] wants a finished car. Our buyer pool wants to come and buy cars of good quality across the board. What would be more typical is one of our [clients] finding one of those (barn find) cars and then bringing that car up to a good condition and then running it across the auction block.
OCW: Do buyers seem to be getting more savvy in purchasing or selling cars?
JOHN KRAMAN:I would say yes. Due to the explosion of automotive-themed shows on TV, a lot of car guys like to watch those shows, they can very easily see price trends and the types of buyers buying the cars. That has gone a long way to educate people. You have information available online and in books. Even a semi-obscure collector car has had guide books published on it showing how to determine if a car is real or not. A bulk of buyers do a lot of their homework. In the last five to ten years, the potential buyer has become a lot more educated and savvy, and I consider that to be a giant plus. If you are confident in what you are bidding on, you are more comfortable.
OCW: Any surprising trends during 2015?
JOHN KRAMAN: The biggest surprise over the past three to five years is the quantity and value of vintage pickup trucks. Even going into the early-to-mid ’70s — especially if it’s a shortbed or four-wheel-drive or extremely well presented — they are bringing extremely good money. A big percentage of our business is pickup trucks. For a while it was an ‘also ran.’ Now they are a force in the landscape. Maybe it’s the popularity of pickups in the general population. These old pickups are cool; they do almost seem to represent Americana at its most concentrated and defined. That may be driving [the trend], too.
OCW: Do you see your customers changing?
JOHN KRAMAN:The young guys are definitely becoming more and more of a force. It is not surprising to me that these younger-than-traditional auction car buyers are starting to get more and more involved, because these cars, the 1950s on up, these cars are something special. They are worthy of the interest and prices. Just how they were coveted from a generation before is being passed on. What is going to happen to GTXes and Mustangs and Corvettes — we are knocking on that door now — a lot of these cars are 50 to 60 years old now... there is still a massive amount of people who want them. It is keeping the momentum going.
We are in the middle of the transition period now, and that is where the resto-mod vehicles are going now. The guy who doesn’t want to put up with carburetors and a non-overdrive transmission and marginal brakes, a lot of that can be changed from a massive amount of providers.
I went to the SEMA Show this year — the last year I went was 2012 — and it is Las Vegas’ second-biggest convention they have there. Modifications of late-model performance cars is strong. But just as big are the resto-fit components for vintage cars. It’s a huge, gigantic part of the market. It is all over the magazines and the online mags as well. The cars are such a part of American culture, I don’t think that is going to change. There is still something about a gas-burning car that blends old and new that has a going appeal.
OCW: Have there been any outside impacts on your business in recent years?
JOHN KRAMAN: At Mecum, we are in the second year of [being televised on] MSNBC. When we were on Velocity, for our first six years, we were rating one fourth of our ratings on MSNBC. From our perspective, from our standpoint, one of our best ways to get our message across about what the Mecum experience is all about, is really well-represented [on MSNBC]. The average car nut knows who we are, we have pushed even past that. We are getting much more known beyond the hobbyist. That comes in handy when somebody inherits an estate. They get willed a collection of cars and don’t know what to do with it.
A big part of what we do now is holding an estate’s hand in honoring the legacy of the vehicles and getting good prices for them. Generally, collector car auctions have become the preferred places to buy and sell cars. The collector car auction is a very exciting way to buy and sell a car and with us, to have a reserve price, that takes a lot of the danger out of it.
I think the distinction and how the different auction companies conduct their business, people are getting more and more familiar with how we do things the Mecum way, and they are getting on board with us.