Pebble Beach Concours d’Elegance 2024: Classic Car Market Faces Challenges Amidst Generational Shift

Monterey Car Week: A Spotlight on Collectible Cars

Monterey, California, is once again the epicenter for classic car enthusiasts as the annual Pebble Beach Concours d’Elegance attracts attention from around the globe. With an estimated $400 million worth of classic cars set to cross the auction block, this week will serve as a crucial evaluation for the collectible car market.

The Current State of Sales

During Monterey Car Week, about 1,140 classic cars are expected to change hands, with sales projected between $367 million and $409 million, according to Hagerty. This estimate indicates a continued decline for the third consecutive year, with values plummeting 18% from their peak of $471 million in 2022. The average sale price has dropped slightly to $473,000 from last year’s $477,000.

Simon Kidston, a prominent classic car advisor, emphasizes the significance of Pebble Beach in gauging market health. "Everybody waits to see what happens at Pebble Beach before committing to major decisions for the rest of the year," he stated.

Factors Influencing Market Dynamics

Global Uncertainty and Economic Conditions

The classic car market, akin to other collectible sectors, has witnessed a slow decline following a pandemic-driven rally in 2021 and 2022. According to the Knight Frank Luxury Investment Index, collectible prices are down 2.7% over the past year, with classic car values stabilizing at a mere 0.2% decrease. Contributing factors include geopolitical tensions and rising interest rates, which diminish the appeal of acquiring classic cars.

Generational Shifts in Collecting Preferences

One of the most significant factors reshaping the market is a generational transition. Baby boomers, historically the backbone of classic car collecting, are either aging out or downsizing. In contrast, younger generations such as millennials and Gen Z are gravitating towards newer models, shifting focus to cars that align with modern tastes. This trend is anticipated to gain momentum, especially as an estimated $100 trillion is set to transition to these younger collectors.

Impact on Classic Cars from the 1950s and 1960s

This shift has led to an oversupply of classic cars from the mid-20th century, lowering prices and creating a challenge for sellers. "There’s a lot of depth in this market, but it’s rotating to younger buyers and newer cars," stated McKeel Hagerty, CEO of Hagerty.

Rising Stars: The New Breed of Collectibles

While the market for older models struggles, the auction scene is witnessing a surge in interest for modern supercars. Younger collectors are enthusiastic about 1980s and 1990s vehicles, favoring accessibility and reliability over the exclusivity of classic models. Rare modern supercars, like a 1989 Ruf CTR "Yellowbird" sold for a record $6 million, underscore this evolving market dynamic.

Notable Auctions at Pebble Beach

The 2024 Pebble Beach Concours features some spectacular offerings:

1. 1961 Ferrari 250 GT SWB California Spider Competizione: Estimated at more than $20 million.
2. 1993 Ferrari F40 LM: Estimated between $8.5 million and $9.5 million.
3. 1973 Ferrari 365 GTB/4 Daytona Competizione: Estimated between $8 million and $10 million.
4. 1957 Ferrari 250 GT LWB California Spider Prototipo: Estimated between $7.5 million and $9 million.
5. 2020 Bugatti Divo: Estimated between $7 million and $9 million.

Conclusion: A Transformative Era for Collectors

As the classic car market undergoes a notable transformation, it is essential for collectors and investors to adapt to these changing dynamics. The focus has shifted not only in terms of the vehicles sought after but also in the buyer demographic itself. While classic icons continue to hold their allure, the new generation is carving out a niche that prioritizes practicality and enjoyment.

For enthusiasts and collectors eyeing the future of automotive passion, it is crucial to balance the love for these magnificent machines with market realities. As Kidston aptly puts it, “If collecting becomes a mere financial endeavor, it loses its essence.”

This evolving narrative of the classic car market is a testament to the enduring love for automobiles, but it is also a reminder that change is the only constant in the world of collecting.