12/07/2013 11:25 BST | Updated 12/07/2013 12:06 BST

Goodwood Festival Of Speed: Fangio Grand Prix Mercedes-Benz W196 Leads Highlights (PICTURES)

A legendary Grand Prix racing car has become the most expensive car to be sold at public auction after fetching £19.6 million at the Goodwood Festival of Speed.

The 1954 Mercedes-Benz W196, which was driven by five-times F1 world champion Juan Manuel Fangio when he clinched his second title in 1954m, was sold at the Bonhams auction on Friday, the first day of the Festival.

Visitors to the Festival of Speed get close to Fangio's Mercedes

The German-made car contains many features innovative at the time, including a fuel-injected engine, lightweight chassis weighing just 72lbs and all-round inboard-mounted brakes.

The auction house described the W196 as "not only one of the most significant motor cars of the 20th Century, but also the most important historic Grand Prix racing car ever offered at public auction".

James Knight, group motoring director at Bonhams, said: "At £19.6 million inclusive [with buyer's premium], it's a new world record by some distance.

"We had eight telephone bidders at the start of the bidding and we had three people in the audience, so we had more than 10 people who were prepared to spend. Of those 11 bidders, only five got the chance to bid.

"Our own personal record of £5 million was achieved last year for a Bentley. The price that we achieved today is over three times that, so it's extraordinary.

"We always knew that it was a very, very important car."

The W196 is just one of the many highlights at the annual motoring garden party that takes over the estate of Lord March deep in the Sussex countryside, attracting thousands of fans as well as a healthy dose of celebrity glamour.

The Porsche 911 statue outside Goodwood House

Other headline cars in the auction included the 1955 Maserati 300S Sports-Racing Spider that finished third in the 1955 Sebring 12-Hours and a 1934 Alfa Romeo 8C-2300 'Le Mans' Tourer that was originally owned by the 3rd Viscount Ridley.

However, most of the visitors to Goodwood will be out on the hill climb, the forest rally stage and in the paddocks where they can get close to the machinery and if they're lucky, possibly even rub shoulders with some of the most famous racing drivers - both old and not-so-young - in the world.

Goodwood is renowned for celebrating landmarks - this year marks the 20th anniversary of the festival - and 2013 is no different with a number of birthdays. The 50th anniversary of the Porsche 911 is marked with the ‘Central Feature' sculpture, a 34-metre high statue that stands outside Goodwood House and which is the tallest in the festival's history.

Demonstration runs by historic Porsche road and race cars spanning the seven generations of the 911 will include drives two-time winner of the Le Mans 24 Hours and German Touring Car Champion, Hans-Joachim Stuck, current Porsche Supercup factory Junior driver Michael Christensen, alongside former works aces Richard Attwood and Vic Elford.

Guy Smith will be reunited with the Bentley he raced to Le Mans victory 10 years ago

Among the scores of leading drivers scheduled to attend are F1 world champions Jenson Button, Damon Hill, Alain Prost and Lewis Hamilton; World Rally champions Hannu Mikkola and Carlos Sainz; motorbike legends Randy Mamola and Giacomo Agostini; and Le Mans winners Derek Bell, Henri Pescarolo, Allan McNish and Guy Smith.

Smith won Le Mans with Bentley in 2003 and the 10th anniversary is being celebrated with runs from both Speed 8 cars, which competed in that year's race.

Talking to Huffington Post UK, Smith explained what makes Goodwood such a popular event for both punters and car manufacturers alike.

"Goodwood is such an amazing event… it's always so much fun. It's so laid back and relaxed yet there is so much to see and do and so many people to catch up with," he said.

"The last few years has seen more manufacturers taking an interest in it and using it as a platform to launch and show off new products.

"The Bentleys are always very well received. Even though it’s been 10 years so many people tell me it's still their favourite LMP [le Mans prototype] car, so it's always nice to light up the rear tyres and do a burn out for the crowds!"