Monterey Car Week auctions bring out market’s high rollers
But dealers are curbing expectations in light of slumping sales estimates
This week the centre of the car universe is Carmel, Calif.
Monterey Car Week and its crown jewel, the Pebble Beach Concours d’Elegance, mixes executives from the top brands (Bugatti, Aston Martin, Ferrari, Lamborghini, Bentley, Rolls-Royce, say) with that special breed of car collector who doesn’t hesitate to drop a cool million on a pretty Sunday driver.
There’s also the Quail Motorsports Gathering, the US$600-per-ticket lawn party on Friday that sold out weeks ago to fans undoubtedly anticipating its famously lavish provisions of fresh oysters, champagne and wood-boxed cigars. All the better for ogling the curves of those vintage European sportsters dotting the grass, my dear.
Sunday’s Concours will see 200 six- and seven-figure cars parked on the 18th fairway of the famous Pebble Beach Golf Course. The most eager attendees will hit the lawn at 5 a.m., fighting fog and dew to view vintage cars of the Packard, Jaguar, Maserati, Duesenberg calibre, plus a row of the world’s top dozen or so racing Ferraris, each worth tens of millions.
Jay Leno, Jerry Seinfeld, Arnold Schwarzenegger, and Caitlyn Jen- ner are frequent, effusive attendees. Tickets cost US$375. And then there are the auctions.
“Monterey is the place to watch the market,” said McKeel Hagerty, the CEO of Hagerty Insurance. “It is a fundamentally different animal from Scottsdale or anywhere else. It’s where all the high-end cars sell in numbers. It’s where you get to see the unicorns come out to play.”
Even with the big numbers expected, auctioneers are careful this year with how they are framing expectations. Some might even say tentative.
“We are hearing cautious language out of both dealers and auction companies,” Hagerty said.
“They are spending more time explaining why they may not hit the same numbers they hit in a previous year.”
Indeed, total sales estimates for 2016 are down seven per cent over last year’s US$396 million and down even more compared against the US$400 million mark in 2014. Though there is always some level of market uncertainty during election years, Brexit and the fluctuating Euro may have made some naturally reticent buyers even less inclined to pull the trigger on buying a new toy. But Hagerty called it a case of slower growth, not decline.
“It’s not the sky falling, at all,” he said. “The market is very, very strong for the best cars.”
In fact, the high-end car auction market has remained solid while others for jewelry and art have suffered. This year more vehicles will be offered in the US$10+ million range than last year, even with a five per cent reduction in the number of vehicles offered. It’s also worth noting that with blue-chip values like these, even a US$20 million dip in sales totals one year to the next could reflect the absence of just one car.
It’s more telling for the casual observer to look at what types of cars are selling. Or not selling.
This year at Pebble expect to see fewer examples from the 1950s and ’60s. The number of 1950s vehicles on offer has fallen since 2009, when it peaked at 29 per cent of cars sold there. At this year’s sales, only 16 per cent of vehicles are from the 1950s. The 1960s segment peaked at 34 per cent in 2014; this year only 27 per cent of offerings are from that era.
Instead, look for increasing groups of modern classics like rare Porsches and Mercedes-Benz from the ’90s and early 2000s, which continue to be a part of the biggest growth segment for the overall market. Models from 1980 or later represent 24 per cent of cars on offer in Monterey.
What’s more, models made in 2010 or later (cars shockingly recent enough to be considered that dirty word, “used,” by the, ahem, less enlightened) comprise four per cent of all the cars offered during the Monterey auctions this year; that’s more than twice as many as the preceding two years. Hagerty said that percentage will reach double digits in the next couple years.
“What the market is saying is that these are slightly younger buyers, and they’re not listening to the old guard saying things like, ‘That’s not a real Ferrari because it was made after Enzo died,’” Hagerty said.
Exhibit A: There are two Ferrari LaFerrari’s on sale this year at Pebble, one from Mecum and one from Bonhams. Last year there were none. Both are expected to take more than US$3 million.
Not that the racing Ferraris will lose their hold on top anytime soon.
Of the top 10 expected sales this year at Pebble auctions, five are Ferrari 250s.