An Opinion Piece By Lex Pedersen
For any died in the wool car nut, Monterey Car Week is a significant highlight on the automotive calendar. For those on both sides of the gavel, that being the buy or sell side, it serves as the most significant barometer to the current and foreseeable health of the collectible car market. This is equally relevant for the hobbyist as it is the industry heavyweights, and everyone in between.
Having been lucky enough to live in California in recent times, I made the pilgrimage myself, at the drop of a hat, in pre-COVID California. Given the spontaneity of the jaunt (next day…), my mode of transport and accommodation was one and the same, my 6.2L Ford Raptor, the made in the US of A iteration, not the baby Aussie one. It was also a trip that helped nourish the seed of the CHROME TEMPLE ideology. What an amazing bunch of people, places and Automotive Art.
The crescendo of the week culminates in a series of 5 high profile auctions, spread across airfields, golf clubs and flamboyant lean-tos. Speculation runs wild in the lead up and everyone, including the auctioneers, polish their valuation crystal balls. This year, high hopes were set for a return to normality (whatever that means) for the collectible car market, but that was a false hope as the landscape has been irrevocably altered for reasons we are all too familiar with, resulting in this next automotive revolution.
In all the week’s wash up literature, the word that seemed to be favoured in surmising the week’s activity was “picky”, and that was really encouraging to me. Unlike COVID peaks, where you could buy just about any desirable car and it would enjoy some degree of uplift, in 2024 and beyond you need to be picky, you need to be researched, you need the science (data) to match your art (knowledge). And just like we champion, you have to be well researched and prepared if you are to have better odds than just chance at picking the winners, whether you’re buying for a steal or to break a record price with the informed expectation that you will be gazumping your own record when you decide to divest back to market one day yourself.
Here are a few high-level numbers for context. While many said the auction results were ‘soft’ and ‘disappointing’, they were only down 3% on 2023 to finish at USD$391m with 821 of the 1,143 lots sold at or soon after the hammer (a 72% closure rate compared to last year’s softer 69%).1
Like so many investment sectors, all trends indicate it is a buyers’ market, with sellers and auctioneers having to work harder to deliver results. This is unsurprising in a world full of uncertainty, profit downgrades, inflation, political uncertainty and the threat of new and ongoing wars on several fronts. The more you chew on that, the more remarkable this year’s results really are!
Encouragingly, the best performing cars and market segment was our focused “modern exotics”, in particular the $1m+ segment where our focus has been ever turning to as we scale1. Hagerty, my increasingly favoured source of insight given data gained through their insurance division, coined the term “a retreat to modern” in summarising where bidders’ confidence had appeared to be redirected for this year’s Monterey Car Week. Given all their access to data, I think it’s no coincidence that Hagerty recently acquired auctioneer Broad Arrows. To me, it was a master stroke as their lot lists were jam packed with these modern masterpieces - the same ones that we often find in our cross hairs. We clearly share a similar sentiment on the value trajectory potential of these vehicles, today and beyond.
All in all, I’m continually encouraged, as our belief in the potential of last-of-the-line vehicles continues to show all the right trends and trajectory outlook. I hope to be there next year, accompanied by some of our community, to absorb the atmosphere and maybe lighten or add to the portfolio of assets our investors hold!
I’ll leave you with my pick of the week, the mighty Ferrari F50 that has progressed from the ugly duckling to the belle of the ball. This well-storied car set a record at this year’s Monterey Car Week auctions1, and I still think it was great buying!
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Article Disclaimers & References
Any one thinking about making a vehicle investment should carefully review their options and seek professional advice prior to making any investment decision or vehicle purchase. No reliance may be placed on this article for any purpose. Information in this article has been prepared without taking into account the objectives, circumstances, financial situation or needs of any person, and may differ to information obtained elsewhere.
This article may also contain statements regarding our intent, belief or current expectations with respect to market conditions. Past performance and/or forward-looking statements are not a reliable indicator of future performance. The projections provided are based on the author’s assumptions and analysis. These projections are forward-looking statements and are not guarantees of future performance. The actual results may differ significantly from the projections due to various risks and uncertainties, including but not limited to market conditions, economic factors, and changes in regulatory environments.
This article reflects the author's opinions on a particular subject matter. The views expressed do not necessarily reflect the performance of the CHROME TEMPLE Investments Mach 1 Fund (the “Fund”) nor reflect the opinions of the Fund’s Trustee (Specialised Investment and Lending Corporation Ltd) or their affiliates.
1 Hagerty website.
Imagery credit: Nathan Deremer ©2024 Courtesy of RM Sotheby's