Monterey Week with the Pebble Beach auctions, a true barometer of the market, began this year with premises that should not be overlooked: a war that shows no sign of ending, high interest rates, sluggish inflation, a struggling Chinese GDP, and the Dow Jones falling for the third consecutive week – would these factors have influenced the results?
Pebble Beach auctions
What exactly does it mean to talk about results? In short, it means discussing the total revenue in relation to the number of cars offered, sales percentage, average prices, the number of cars without reserve going to auction, and the reserve price levels.
The total earnings for 2023 amounted to around $391,046,930. An extraordinary figure that changed hands in just three days of auctions, with the number of cars consistent with the previous year, a year that remains record-setting. I am deliberately discussing absolute figures; comparisons and percentages are useful for analysis, but what truly matters is the substance. And with these results, there was more than enough substance on offer. Fears of a perfect storm and the pessimistic naysayers were quickly disproven: no serious illness to report, just a slight fever manifested through a 12% drop in turnover, for some a little high, for others less so, but it’s hard to dispute that 2023 was yet another positive year. The table comparing 2022 and 2023 showcases the data from the five major auctions and should be interpreted without neglecting a significant psychological comparison: 2022 was blessed with a liberating post-Covid excitement, whereas this year brought with it the anxieties of an uncertain world seeking solutions but struggling to find them.
An equally noteworthy observation: if the 2022 Monterey Week auctions were the most successful event ever, this year’s results make 2023 the second most important event in history. Another record.
To better understand the sales of Monterey Week, it’s far more interesting to look at the data auction house by auction house. Let’s begin with Bonhams, which experienced a substantial leap compared to the previous year: revenue “soared” from $27,538,040 in 2012 to $55,182,940 in 2023. But an increase of over 100% in revenue has a very specific reason: this year, Bonhams offered (and sold) the Ferrari 412P – which we’ll get back to – for $30,255,000, more than the total sum of all lots offered in 2022. A more detailed analysis of this auction can be found below.
Broad Arrow doubled the number of cars on offer but understandably struggled to double the average price due to a more diverse range of cars in 2023. This explains why the 135 cars sold (out of 170 offered, 79.41%) represent nearly double the 69 cars (out of 89, 77.52%) from the previous year. However, revenue only increased by a modest 13.72% (from $47,977,400 to $54,562,490), and the average price experienced a notable decrease from $695,324 to $404,167.
Turning our attention to RM Sotheby’s, a seemingly minor yet immensely significant detail emerges: the reserve price. Imagine having a $10,000,000 car and offering it at auction with a reserve price of $9,500,000. Bids start at $5,000,000, go up to $6 million, surpass $7.5 million, and stall at $8,500,000. The auctioneer manages to push it to $8,750,000 but then it remains unsold. In the auction house’s balance sheet, the price isn’t $8,750,000 (a 12.5% drop from the estimate), but $0 – a 100% drop. This explains RM’s modest performance, passing from $217,204,800 last year to $150,758,500 this year: several lots came close to but did not meet their reserve prices, significantly impacting the final total, something that didn’t happen in 2022. It’s also worth remembering that the previous year marked the best-ever auction (not only for RM but for any historic car auction), and lightning rarely strikes twice in the same place.
Lastly, Gooding and Mecum, which had the lowest percentage of no-reserve lots but also targeted the market the most: Mecum employed a marketing tactic of reducing the number of cars offered (from 363 to 321) and carefully selecting those closely aligned with the event’s typical customer.
The average price only dropped 7% from $226,640 to $210,661, while Gooding, despite offering more cars (from 154 to 165), consistently lowered the average estimate from $928,000 to $805,000. Once again, the strategy involved focusing on cars with higher resale potential and, perhaps, gently influencing sellers toward more competitive price points. Although the auction didn’t achieve last year’s result, Gooding managed to mitigate losses, concluding at $93,887,950 compared to $104,451,000 in 2022.
Lastly, what can be said about the magnificent Ferrari 412P? Anticipation was high for it to set all manner of records, and the car was presented as entirely authentic: with matching numbers for the chassis, engine, gearbox, and original bodywork, impeccably restored. The auction process was meticulously curated to attract potential buyers. The final bid was $30,255,000. I have to admit that I had imagined a figure between $40 and $50 million. Perhaps that was too optimistic, as after the auction, some considered the amount correct. However, it was worth trying to understand.
One hypothesis is that the market is no longer as buoyant as before for this type of car. It’s possible, but certain masterpieces are timeless. However, in practical terms, what surprises is that the car, which raced semi-officially for Garage Francorchamps, lacked Ferrari Classiche certification. One might wonder, even if all the documents and data show no flaws, why a collector with a car of that value didn’t request the “supreme certificate” from the manufacturer. Regardless, before reaching deep into one’s wallet and parting with a sum that represents a significant investment, an additional assurance check might have been prudent. All things considered, the cost of certification would likely pale in comparison to the ultimate value paid. Who knows! Find out more
Report by Cliff Goodall for roarington.com
