The size of the Southern California collector car market bears no greater testimony than the very recent emergence of Auctions America's annual sale at Santa Monica Airport's Barker Hangar.

Run for the first time in 2013 just a week prior to the beginning of Monterey Car Week that year, the inaugural auction was successful, and the 2014 auction gathered further momentum, generating $17.5 million in sales.

For 2015, the auction has been moved several weeks further away from the epicenter of the global collector car market to July 17 – 18 (Monterey Car Week runs August 10-16 this year) and the early momentum of the first two years appears to have built further.

Evidence of this is the number of high profile cars being offered that would in earlier years have been expected to travel 300 miles north to the auction blocks of Pebble Beach. Many of the cars on sale in Monterey in mid-August travel much further in search of the international money which congregates there.

No less than four cars in the Santa Monica auction are likely to sell for more than a million dollars: a 1967 Ferrari 330 GTS (estimated to sell for between $2,000,000 and $2,600,000 and pictured above at right), a 1960 Mercedes-Benz 300SL Roadster (estimate: $1,200,000 - $1,500,000 and pictured below), a 2004 Ferrari Enzo (estimate: $1,700,000 - $2,100,000 and pictured above at left), and a Mercedes-Benz Spezial Roadster.

Two Ferraris and two Mercs heading the bill seems appropriate as the two marques have a statistical stranglehold on first and second spots in the most valuable marques of all time. While the 300 GTS will probably end up becoming the most valuable car to be sold at the auction, the car with the greatest potential to become the star of the show is a Mercedes-Benz 540K Spezial Roadster by Nawrocki, which doesn't have an official estimate, but might sell for anywhere between $1,000,000 and much much more, depending on how the marketplace values the art deco masterpiece.

By contrast to the Santa Monica auction, Bonhams' recent Goodwood Festival of Speed sale, one of the premier events on the European collector car calendar, only saw five cars attract seven figures. America's unmatched legions of high net worth individuals now so comprehensively dominate the global collectible car market that new auctions such as the California sale are beginning to tap the most lucrative segment – Southern California has the greatest density of car collectors in the world.

The Mercedes-Benz 540K Spezial Roadster

Only 25 Mercedes–Benz 540K Spezial Roadsters were ever made, far fewer have survived to this day, and the massive, handcrafted art deco sculpture was the absolute pinnacle of automotive desirability from the moment it was launched at the Paris Auto Salon in 1936. The image above is from the 1936 Berlin Internationale Automobil Ausstellung (International Automobile Exhibition) in February of that year and shows the car from which the 540K Spezial Roadster was developed – the 500K Spezial Roadster.

Germany created the automobile industry in 1886 with Carl Benz's Autowagon and as 1936 was the fiftieth anniversary, it was a much celebrated year in the powerful German automobile industry.

Hence the 540K unveiled in Paris was meant to be particularly significant in more ways than one. It was lighter and more powerful than it's predecessor, and the Spezial Roadster was seen as the absolute pinnacle of automotive excellence when it was shown at the 30th Salon de l'Automobile in Paris for the first time.

The Mercedes-Benz advertising image of the time pictured above, shows the Spezial Roadster under the LZ-129 Hindenberg airship, also regarded as the height of technology, luxury and modernity following its launch in March, 1936 (though not for long). Both were symbols of Germany's technological knowhow.

One of the world's greatest automotive historians, Griffith Borgeson, wrote of the Spezial Roadster: "There is a harmony and balance of line and mass… which very simply defies any conceivable improvement. They are sculptural perfection… For many people of taste, more beautiful cars will never be designed and built."

The Spezial roadster was also very fast, having been designed with thought towards the German autobahns which Hitler's government was building at the time.

The 540K engine produced 115 bhp without the supercharger engaged and 180 bhp when the compressor clutched in at full throttle (or as desired) giving it a top speed approaching 110 mph. When tested by Britain's Motor magazine, the 540K hit 102 mph at the end of a quarter-mile.

This may not seem that impressive, because shopping trolleys made in countries you've never heard now routinely achieve such top speeds, but this was eighty years ago and you really do need to see one of these bohemoths in the flesh to comprehend just how big it is – it's five meters long (196.9 inches) and 1.8 meters wide (70.9 inches). Check the specs on your car and you'll understand why it's perfromance was so "spezial"in the day.

In May 1938, the 540K was tested by Autocar magazine (U.K.) and achieved the highest top speed of any car it had ever tested: 104.65 mph (168.5 km/h).

"One's foot goes hard down, and an almost demoniacal howl comes in," reported Autocar's test driver H. S. Linfield. "The rev counter and speedometer needles leap round their dials: there is perhaps no other car noise in the world so distinctive as that produced by the Mercedes supercharger."

There's another factor involved with Mercedes-Benz cars that isn't often recognized. Common practice prior to WW2 for people of considerable wealth, was to buy the base car from the best manufacturers (Bugatti, Bentley, Duesenberg, Rolls-Royce, Talbot-Lago, Delahaye et al.) and have a custom body created by one of the recognized coachbuilders of the day (Saoutchik, Figoni et Falaschi, Walter M. Murphy, Dietrich, Bohman & Schwartz, Walker-LaGrande, Gurney Nutting, Bertone, Castagna ad infinitum).

Mercedes-Benz cars were sometimes bodied in this way (Cadogan, Murphy and Saoutchik bodied Mercedes-Benz cars in the top 200 most expensive of all time), but it differed from other elite car manufacturers in that it had its own proprietary coachbuilding plant at Sindelfingen where many of the world's most beautiful and expensive cars were created.

Sindelfingen recently celebrated its centenary and today still produces upper-range and luxury class vehicles such as the SLS AMG Coupé and Roadster and houses the company's Research & Development department. The 300SL Gullwing and roadster were styled here (pictured), and across the years, all of the company's major models were styled and hand-crafted there, including the Spezial Roadster.

The 540K Spezial Roadster Marketplace

Those 540K Spezial Roadsters that have reached the auction block now fetch stellar prices – there are two in the top 20 most expensive cars of all-time.

The world record price for a 540K Spezial Roadster is $11,770,000, achieved by Gooding & Company at Pebble Beach in 2012 for the legendary 1936 Mercedes-Benz 540K Spezial Roadster of Baroness Gisela von Krieger of Prussia. Among the very elite of international society, the beautiful Baroness was named one of the ten most fashionable women in the world, mixed with European society's elite, led a very colorful lifestyle and kept the car until her passing in 1989. The full story is in our regularly-updated Top 100 Most Expensive cars of All-Time feature and it's worth the time.

Beyond the record holder, four 540K Spezial Roadsters pictured above are all in the top 100 most expensive cars ever sold at auction. From top left clockwise, the 1937 Mercedes-Benz 540K Spezial Roadster which fetched US$9,680,000, the 1939 Mercedes-Benz 540K Special Roadster which fetched US$7,480,000, the 1939 Mercedes-Benz 540K Spezial Roadster which fetched US$4,620,000 and the 1937 Mercedes-Benz 540K Special Roadster which fetched US$8,106,150.

The catch ... and the opportunity

There's a catch with the Mercedes-Benz going to auction later this week (above) and it is both simple and complex.

Simplistically, this is not a real 540K Spezial Roadster.

If it were one of the originals, and had been imported through New York's Mitropa Motors, the Mercedes-Benz importer at the time, it would have sold new for $14,000. That's roughly 40 percent more than the most expensive, custom-bodied Cadillac V16 of the day. It would also almost certainly become the nineteenth car in history to sell for more than seven figures at this auction – check our list of the most expensive cars of all time and you'll see that only 18 cars have ever sold for more than $10 million dollars and this car is in such exquisite condition that it would command such a price.

Yet, the original plates and authenticating stampings on the chassis and in the engine bay are genuine ...

... and the instruments and motor which are of such beauty they will take your breath away, also emanated from Mercedes-Benz' legendary Sindelfingen body works in the 1930s, and on this car too.

That's because this car was not born a 540K Spezial Roadster, but was originally created as a Mercedes-Benz 540K Cabriolet B like the one pictured above.

The current vendor purchased it from a broker who had acquired it from the estate of renowned supercharged Mercedes collector, Dr. George Bitgood. The good doctor certainly had an eye for cars of interesting provenance too, having also owned Movie mogul Jack Warner’s 1937 540K Special Roadster and Hermann Göring’s Special Roadster.

As originally purchased, this car was in considerable disrepair, and because the Cabriolet B shared the chassis, drivetrain, lights, wire wheels and instruments of the Special Roadster, it was decided to use the car as a basis for a Spezial Roadster reconstruction.

Attempting to better the bodywork, tolerances and artistry of Mercedes' Sindelfingen coachbuilding center might seem like an exercise in futility but the owner had a secret weapon in making the transformation.

If you haven't heard of Minnesotan Cass Nawrocki, he's a legend in metal fabication. Indeed, he did write the book on metal fabrication, quite literally.

Nawrocki's book Any Impossibility in Shaping Metal pictures him on the cover with an original 540K Spezial Roadster he rebodied. As he'd already done it once, he already had the patterns and jigs to create another 540K Spezial Roadster body and hence he was a perfect fit to recreate an "atom perfect" reincarnation. He also had the rusted original fenders, doors and body parts from that rebodied Special Roadster to use for reference. For this project he built a new wooden structure of kiln-dried eastern ash, then painstakingly created new exterior panels and affixed them to the wood frame. The process took two years in all, and is referenced in the book.

The new body was then taken to Jim Friswold, the well-known Mercedes restorer in Portland, Oregon. Friswold had completed a superb Cabriolet A that had scored 100 points at the Pebble Beach Concours d'Elegance. No expense was spared in recreating this masterpiece, which took another three years. On its first time out, the car was rewarded with Best of Show at the Forest Grove Concours d’Elegance in Portland, Oregon. During the past year, it won the Most Glamorous Car award at the Niello Concours at Serrano in El Dorado Hills, California.

So be in no doubt, in a world where collectors of vast wealth spend millions on restorations, this car is as good as they get.

So how much is it worth?

If the original base 540K Cabriolet B used for this car had been treated to a restoration of this quality and returned to its original spec, it would probably sell for somewhere between $1,200,000 and $2,500,000 in today's bullish climate, though with the uncertainty surrounding the potential default of Greece on loans, the resulting uncertainty of the future of the Euro zone, the uncertain situation surrounding China's financial markets and the unprecedented number of million dollar cars heading for Monterey auction blocks this year ... a month from now that marketplace might not be as certain about the short term future any more.

The 540K Cabriolet B above sold at RM Auction's September 2013 London sale for £820,000 (USD$1,383,352).

Yet the marketplace ebbs and flows, and it's difficult to determine exactly what a pristine 500K or 540K Cabriolet B will sell for in even a relatively stable financial climate. In the February 2012 round of auctions in Paris, a 540K Cabriolet B (pictured above) sold at Artcurial's official Retromobile auction for €494,630 (US$648,297).

Even in the midst of the last Global Financial Crisis, at Monterey in August, 2008, a 500K Cabriolet B (pictured above) was sold at Gooding & Company's official Pebble Beach auction for $1,045,000.

The willingness of people over the years to replicate the stunning presence of the massive Spezial Roadster using 500K or 540K cars as a base has also brought rather mixed results.

At the RM Auctions' Aalholm Automobil Museum sale in Denmark in August, 2012, a 1934 Mercedes-Benz 500K Spezial Roadster Replica (pictured above) built using a 1934 500K Cabriolet B as the base sold for DKK 2,240,000 ($339,900). Though the car came from a famous museum, it was not nearly as Spezial as a real one, carrying the chassis number of a 1936 500K Cabriolet B and sharing its door openings, wing profiles and bonnet ventilation. There was no hood, just a dummy cover. Had it retained its Cabriolet B identity and been restored to the same degree, it would arguably have fetched much more.

On the upside, a 1938 540K Special Roadster built using 540K “Innenlenker” (pictured above) as a base was sold by RM during Monterey Car Week in 2005 for $1,017,500.

The reengineering and rebody process was carried out by HME Restoration of San Marcos, California, taking five years and 15,000 man hours. The work commenced in 1993 after HME’s restoration of two award-winning 540Ks and only then after a six year search for a satisfactory donor.

These precedents for 540K base cars being upgraded to Spezial Roadster specification and selling for more than a million dollars mean that the car going to auction in Santa Monica later this week is an enigma.

It's as near to perfect a specimen of a car which should sell for $12 million to $15 million, yet it will probably achieve around ten to 15 percent of that value. If you're in love with the Spezial Roadster, that's great news because a 90 percent discount on an oil well or a sheep station would be snapped up in minutes.

If you're looking at the car as an investment, with a realisable value and a handsome return a few years from now, this Spezial Roadster might not be what you're looking for. Authenticity is one of the primary drivers of value in this marketplace, and without it, it's just an exquisitely beautiful car.

It will be fascinating to see just what it sells for and if you're interested, the auction will be streamed live on the internet this coming Friday, July 17, 2015 at 10:00 AM and Saturday, July 18, 2015 from 10:00 AM local California time.

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