Luxury auto CEOs say there’s a K-shaped economy even at the very top of the market

Hit the events and shows of Monterey Car Week, and what’s apparent is that money is no object: seven-figure hypercars changing hands, classic car auctions leaping to new records, and waiting lists stretching years.

But talk to the executives who actually sell these cars, and a more nuanced picture emerges. Higher-end buyers are supporting the market, but there is also a split. They say there is a K-shaped economy even at the very top of the market, and only one arm of the K is going up.

McKeel Hagerty, CEO of the collector-car insurer Hagerty (HGTY), sees it now. When asked whether a K-shaped economy exists in the collector-car world, he didn’t hesitate.

Duesenberg SSJ Special Speedster, named Best of Show at the 75th Pebble Beach Concours d'Elegance. — Duesenberg SSJ Special Speedster, named Best of Show at the 75th Pebble Beach Concours d’Elegance. · Pebble Beach Concours d’Elegance

“Like the two upper levels of a K,” he said. “When people are paying a lot of money for cars, it’s because there was a big liquidity event.”

Company sales, IPOs, and an overheated stock market add to liquidity at the highest end, but set against a backdrop of tariffs, high rates, and global conflict that “freaks people out.”

The result is a gold rush at the very top, largely indifferent to the anxiety in the lower rungs of even the modestly wealthy.

Hagerty has watched that gold rush compress time itself. “The number of $100 million car collections that have been built in a matter of months, rather than decades, is very different right now,” he said.

Read more: How to find the best luxury car insurance

Bentley vehicles at the Quail event during Monterey Car Week. · Bentley

Frank-Steffen Walliser, CEO of Bentley (VWAGY), sees the split plainly from his own order books. “The top end is — if I say it’s not a problem, it’s true. It’s good, very good business, proper demand, good customers,” he said.

“But the more regular customers, this is where we see the business is slow. People hesitate.” The reason, he argues, is that these cars are pure want, not need. “You buy a luxury product — a handbag, a watch, a car, a boat — it’s all about self-rewarding,” Walliser said. “But if your business numbers don’t look like that, you say it’s not necessary at all. You don’t buy a Bentley because you need it. You buy a Bentley because you want it.”

No one drew the dividing line more sharply than Adrian Hallmark, CEO of Aston Martin (ARGGY). In his view, wealthy and lower-income groups are both, in a sense, insulated from the noise — it’s the tier between them that’s worried.

“People at the top end, it makes no difference. People at the bottom end, it makes no difference,” he said. “It’s those in the middle who are the most susceptible — and they buy the highest volume of cars, not the highest value of cars.”

The Aston Martin Valen shown at the Quail, a Motorsports Gathering during Monterey Car Week. · Pras Subramanian

Hallmark reaches for a line he attributes to LVMH’s Bernard Arnault to explain the psychology. “Luxury consumption is merely an indicator of people’s confidence in their future,” he said. “If I think I’m going to be wealthier in three, five, 10 years than I am today, I’ll do it. If I’m not sure, I’ll think about it.”

What he’s seeing in most markets, he stressed, is “hang back, not withdrawal” hesitation among the middle, not among the buyers at the top, whose ranks he said are “logarithmically growing. And they’re getting younger.”

At the absolute peak, the downturn simply doesn’t register.

Mate Rimac, the 38-year-old CEO of Bugatti, runs a company so far up the “K” that macroeconomics matter little, if at all.

The Bugatti Destrier one-of-one hypercar. · Bugatti

“We have so much over-demand and so little supply that the demand is so much bigger than what we can serve,” he said. The arithmetic is staggering: “There are around 300,000 ultra-high-net-worth individuals in the world, and we make 100 cars per year. We are serving less than 1% of the global ultra-net-worth population. If half of them did badly, there would still be more than enough customers for us.”

Nick Collins, CEO of McLaren Automotive, sees the same expanding pool of well-heeled buyers — and a new source feeding it.

“The number of ultra-high-net-worth individuals around the world continues to grow quite rapidly, in every age group,” he said. “You now see an explosion of AI-related millionaires — young individuals, in the US, Europe, the Middle East, and China.”

The McLaren McL 6GT with manual transmission. · McLaren

But the optimism isn’t universal, and there is some caution among some luxury brands.

Lamborghini (VWAGY) CEO Stephan Winkelmann may have been the most sober of the group, though the Italian exotic automaker posted record revenue even as unit sales slipped, due to higher spending from its wealthiest clientele.

“It’s very difficult in these times, because things are changing so fast,” he said. “Nobody was expecting that there would be a war in the Middle East,” an important market where “the volume dropped.”

Add a weakened dollar and a Chinese market that “dropped dramatically,” and even a brand with a yearlong waiting list is playing it cautious.

“We have to be very conservative in the approach,” Winkelmann said. “Only then can you maintain this scarcity and this lust of buying the Lamborghini.”

The Lamborghini Revuelto SV. · Lamborghini

Put it all together, and a consensus emerges from Monterey Car Week: The very top of the market has never been more bullish on spending, the tier just below it is getting more nervous, and the gap between them is widening.

The K-shaped economy is bifurcating right at the top, and the luxury auto brands will do what it takes — one-off cars, limited-edition specials, even manual transmissions — to cater to shoppers’ expensive whims.

Pras Subramanian is Lead Auto Reporter for Yahoo Finance. You can follow him on X and on Instagram.

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