In preparation for this auction issue, we asked Dana Mecum, CEO of Mecum Auctions, to answer a few questions about the current trends in the Corvette hobby. He has a widely varied automotive background and can give an inside view to the current state of Corvette affairs nationwide.
CF: Dana, I want to thank you for taking the time for this interview today.
DM: You are very welcome, Alan.
CF: Can you give us a little history of how you got started in the auction business?
DM: My father has sold cars for approximately 55 years. He started selling Studebakers and Packards in the '50s, so I've been around cars my whole life. I started out selling new Buicks and Pontiacs at my father's new car agency, but I always gravitated toward the unusual cars. Even when I could drive a brand-new Pontiac (of course, Pops would never let me drive a new Trans Am), I always drove year-old cars that were performance-oriented. From 1975 through 1988, I had various collector cars and Corvette business interests. In 1975, I had a shop specializing in Corvettes called Mecum Sport Center. In the '80s, my family had a Corvette dealership called C'Jacks, which always had over 100 Corvettes in inventory. In 1988, I had quite a large collector car inventory, and I decided to use those cars as a centerpiece and attract consignments to go along and have an auction. With the first auction, I did not really have a long-term business plan. However, at the end of the auction, a tornado blew everything down. Seemed like quite a nuisance at the time, but long term it was a blessing-here we were, this little first-time event, with national press and exposure.
CF: How many auctions do you hold each year?
DM: For 2006, we have nine auctions scheduled.
CF: Has there been a significant increase in your auction sales over the last few years? If yes, what do you attribute this to?
DM: There has been a tremendous increase in our gross dollar volume. The actual number of auctions we perform is down from previous years. At one time, we were up to 27 auctions a year. I felt like a professional ball player or musician since we were always on the road. we were continually growing horizontally, but none of the auctions or events were getting better individually. So we made the business decision to reduce the number of auctions and spend more time and energy on what we already had and make those auctions great. The business plan has been tremendously successful as all our auctions have tripled in size in the last 211/42 years.
CF: Do you think there are any Corvette trends in this current marketplace? If yes, what are they?
DM: I feel the trends in the Corvette marketplace are pretty well established and lend themselves to the past. While musclecars and Corvettes have escalated in value at a tremendous rate, the good thing about Corvettes over musclecars is the Corvette market is the broadest, most established collector car marketplace. What I'm saying here is there are so many people involved that it holds the prices steady. The current trend of escalating prices is primarily centered on where Corvettes have been a long time: factory paperwork, high-quality cars, and big-block cars are your leaders.
CF: What percentage of your sales consists of Corvette sales?
DM: We offer between 4,000 and 5,000 cars a year for sale among our nine auctions. And, typically, 1,250 to 1,500 are Corvettes or about one-third.
CF: Concerning your Corvette sales over the last two to three years, do you know the percentage of restored numbers-matching cars versus modified Corvettes? If no, try a guess.
DM: That's a very hard question to answer. As far as modified Corvettes, a very low percentage of Corvettes we offer for sale are modified. We do offer a lot of cars that either have restoration motors or non-original matching numbers motors-that is to say, the right motor for the car, but not the one it actually left the factory with. I would say over 90 percent of the cars we offer are original in the sense they have either the original engines or a correct-type motor, even it it's not matching numbers.
CF: What do you feel the Corvette Fever readership would like to know about the Mecum auction process, and why should they sell their Corvette through you?
DM: The Mecum Auction process is centered on providing great service and repeat business. Mecum provides a great knowledge of Corvettes and selling cars, and has a great reputation with buyers knowing they are getting a quality Corvette and a car that is actually what it is represented to be.
CF: How is your event different from other well-known auctions?
DM: The primary difference would be with the most visible, Barrett Jackson. They require sellers to enter their cars at no reserve. We allow sellers to control their own destiny and have a reserve on their property. The no-reserve atmosphere presents a casino effect. Yes, sometimes somebody wins and breaks the bank. There are also losers when good cars fall through the cracks. PR wise, you only hear about the winners. You don't hear about the 30 percent that went home unhappy with the results. In our business model, the 30 percent that were unhappy with the results at least still have their car. we are very proud that we are not promoting the casino effect. We are a professional business where a seller retains that right of his car's future in his own hands.
CF: Is there any TV coverage at any of your events? Why or why not?
DM: Yes, but not national coverage. The reason we do not have national TV coverage is because it is a full-time job to obtain, and we've been busy keeping up with the growth of our company. it's part of our future plans, but with our corporate growth of almost 400 percent in less than 30 months, we haven't had time to deal with it.
CF: Do you currently own any collector cars?
DM: Yes, I'm on my fourth collection. My first collection I sold to get married, buy a house, and have kids. My second collection I sold to start the business. My third collection I sold to save the business. I am currently on my fourth collection, and we've done very well, and I really do plan on keeping these cars.
DM: Yes, I have three favorites.(1) A '57 Aztec Copper (Chip Miller car). Just last weekend I drove it to the New Glarus Hill climb in New Glarus, Wisconsin. I made seven runs up the hill, drove two hours there, and two hours home. It is such a great car. Most of the old Alfas and Jaguars were scared of the hill after two or three runs.
(2) A '67 convertible 427/390, commonly known as the Sunshine Car. The top never goes up. I drive it all the time, and she's never been caught in the rain. I just drove it on a five-hour trip to Wisconsin to look at other old Corvettes last Sunday.
(3) A '67 Corvette 427/435 convertible, the original car that the Bloomington Gold Survivor Award was created around.
CF: If a person presently didn't own any collector cars but wanted to get into the marketplace, would you have any suggestions for that person?
DM: Yes. First, buy what you like. I've seen people purchase things for value. Did you ever try to sell something later that you didn't like or knew nothing about? Always make what you like in the way of style and so on, the first part of your decision. The next thing is, if you can afford the best, buy the best, even if you pay a higher price than the current market. The best always goes up in value. Average cars don't always increase in value.
CF: Are there any significant sales trends or differences in your auctions compared to one another? Is there a different type of buyer at each event?
DM: Yes, there are differences. First difference is Bloomington Gold is an all-Corvette auction. Our Spring Classic, while it has some Corvettes, is primarily a musclecar auction. Then we also have what we would brand as National events and some smaller regional auctions. The National events bring in the big cars and big money collectors. The regional events are where you find more entry level and "driver" cars that pass from general hobbyist to general hobbyist.
CF: What do you attribute to your success?
DM: We like what we do. From there, we believe in repeat business, and we believe in the win-win philosophy for buyer and seller.
CF: From your perspective, where is all this money being spent on collector cars coming from?
DM: We have the largest group of people ever in the history of the world coming of age when they have disposable incomes to spend on luxuries. Not only are their kids gone and the house paid for, we also have the great generation from the '30s and '40s leaving us, and there are more people than ever inheriting money. It's really simple economics: there are a lot of people that have done well in life, and cars are our art of the 20th century, and they are ready to reward themselves with a luxury item.
CF: Has the market peaked?
DM: The market will never peak, but it will become more select. What I'm saying is, your great cars, for example, a '67 L88 convertible with paperwork, will always increase in value. A great '67 435 with great paperwork will always increase in value. A '67 435 that's a good car with no paperwork is going to stabilize. Bottom line-prices are always going to go up, but the marketplace is going to get thinner and thinner for the great cars.
CF: Looking back on your last four to five events, what do you envision for the rest of the '06 auction season?
DM: We look at the rest of the 2006 auction season to be a tremendous growth boom for us. We expect that because in the last 18 months we have had so many new customers come into our client base. Our philosophy is customer service, so if we do a good job with all those who have bought and sold with us, our growth pattern will continue because we have so many new customers to grow with us.
CF: Are you planning any major changes to your events for 2006/2007? Beyond?
DM: Yes. Our auctions have always been strictly auctions. With the growth and size of our auctions, we are going to work on lifestyle and add more vendors and things going on at the auctions so there are ancillary things for people to do besides just buying and selling when they are at our events.
CF: Given the huge amounts that many Corvettes are currently selling for, what do you think the Corvette hobby will do over the next year?
DM: This is a two-part answer. First of all, a few Corvettes are selling for high values but if you look closely at the majority of Corvettes, the Camaros and Chevelles are actually selling for more. So there will be a correction, and remaining Corvettes will increase in value to sell for more than Camaros and Chevelles. Secondly, the Corvette hobby /industry of collectibles are going to increase.
CF: Do you think that your auction sale prices affect the hobby in general? Why or why not?
DM: Yes. Auctions have become the vogue way for people to buy and sell. And like any averaging, if you take the highs where things did a moon shot and sold for too much, and you toss out the ridiculous lows, if people just look at the averages, they can really see how much the investments are growing.
CF: What do you think about the future of the Corvette hobby long-term?
DM: Speaking of it as an industry, as with anything else, it needs to constantly revitalize. The core people of the Corvette hobby that started in the early '70s are all getting to the age that they are not as active, and there is going to have to be revitalization, getting young people interested and active.
CF: Dana, I want to personally thank you for taking the time to answer these questions for CF.
DM: It has been my pleasure.