4% Still Want That Rag Top

by | 5 minute read

The global convertible car market has peaked, according to new analysis by IHS Automotive. Based on its latest forecast and analysis, IHS reports the outlook for the global convertible car market will not return to record levels of 831,000 convertible sales experienced in 2004 during the next decade despite a raft of new model launches.

Sun Sets on Global Convertible Car Market Growth as Niche Players Continue with New Models

Premium brands have led the convertibles global market share since 2014. Consumer preferences still influence regional sales, however. The IHS analysis concludes that after several years of leadership, mass-market brands offering convertible options relinquished their standing to premium brands offering new drop-top models. On a global scale, premium brands have a 55.5 percent market share compared to 33.1 percent for mass-market brands.

China growth, cultural influences influence convertible market

China‰Ûªs exponential growth of the auto industry in the past decade has influenced the stagnation of the global convertible vehicle market in the past decade, though not intentionally. While there is no real culture of Chinese consumers opting for convertible passenger cars, the volumes of traditional vehicles sold in China has outpaced the overall market influencing the overall market share dynamic between traditional options and convertible body styles.

According to IHS sales analysis and forecast sales volumes, China represents just a small percentage of the combined global convertible market with just under 24,000 units sold at its peak in 2012. IHS Automotive forecasts expect this to continue until 2025 with just 1.2 percent growth in convertible sales in the next decade in China.

‰ÛÏThe cultural influence is not the only factor in the adoption of convertibles in China as high pollution levels in major cities also pose a challenge. In addition, the concentration of the middle-class buyers with the financial means to afford convertibles are in these congested cities,‰Û said Tim Urquhart, principal analyst at IHS Automotive.

European market sees decline in past decade, though future remains hopeful

The European market is one of the key remaining flourishing markets for convertibles, though it also has undergone significant sales contraction in recent years. In Europe, the convertible market fell by almost 58 percent between 2004 and 2014, and now represents just one percent of the market. From a regional perspective, Germany and the United Kingdom dominate the market in terms of convertible sales with 74 percent of the combined regional market. This is largely because of the large number of German convertible models that are sold into the domestic market and the affection that UK car buyers have for two-seater roadsters.

‰ÛÏThere are signs that the market in Europe will recover slightly as a result of certain key new model launches with vehicles like the BMW 2‑Series convertible and the fifth-generation Mazda MX5 set to bolster the market, along with soft-top variants of the Land Rover Evoque and Mercedes-Benz C‑Class which are also due in 2016,‰Û Urquhart said.

American dream continues as North America leads global market

‰ÛÏNorth America has always led the global convertible market, but hit a near-record low in 2014 with just 164,000 units sold in the region. While consumers returned to the automotive market, the gain has been in more practical segments, and purchases of convertibles and roadsters have lagged the general automotive market resurgence,‰Û Urquhart said. ‰ÛÏHowever, the North American market is expected to progress on a stable platform over the next few years, led by the launch of the latest iteration of the Ford Mustang in 2016.‰Û

The 2016 forecast is still significantly less than the market's peak of 344,000 units recorded in 2006, according to IHS Automotive. In 2006, however, the market itself saw a pre-Great Recession record not yet matched, which cascaded down to nearly every body type. In addition to the Mustang, the convertible variant of the new Chevrolet Camaro, the Mazda MX‑5, the BMW 2‑Series and the Buick Cascada (the U.S. market variant of the Opel of the same name) are also forecast to help with the slight recovery of drop-top sales in the region with 208,000 total units forecast for 2016.

Premium brands expected to lead for the long term

The convertible car market reached a peak in the mid-2000s when many manufacturers in Europe wanted to seize the opportunity by launching convertible variants of mainstream models, such as Ford Focus CC, Renault Megane, Opel Tigra, Mitsubishi CZC and Nissan Micra C+C. At the peak in 2004, the mass-market brands held 51.5 percent of the global soft-top market with premium brands occupying just 40.2 percent.

‰ÛÏWe‰Ûªve seen some successes for mass-market brands getting into the convertible business in Europe, but there have been more misses. The financial crash of 2007/2008 was a huge factor. Also, as consumers‰Ûª preferences stymied convertibles as a commerciallyviable proposition for many OEMs, many players needed to withdraw from the shrinking market,‰Û Urquhart said.

By 2014, premium brands once again took over. Last year, premium brands represented a much larger share of a much smaller market with 55.5 percent share compared to the mass-market brand's share of 33.1 percent. Overall, convertibles represented less than 1 percent of global market in 2014.

‰ÛÏAs we move forward,‰Û Urquhart said, ‰ÛÏwe expect to see the premium brands continue to grow within the convertible market while mass-market OEMs that were not as successful with convertibles in previous years instead concentrate their resources toward popular and, in some cases, more practical, SUVs and crossovers.‰Û

Reassure your car dealers that there are still Americans out there searching for their perfect rag top ‰ÛÒ 3.7% to be exact. Use AudienceSCAN's findings on Convertible Shoppers to go after this dwindling audience the right way. Nearly 34% of Convertible Shoppers are aged 25 to 34 and 26% want to buy things that help them feel "sexy." Believe it or not, a fantastic way to reach these customers is through cinema advertising. In the past month, 51% took action after viewing ads at movie theaters. And be sure to focus on mobile: Convertible Shoppers are 149% more likely than average to have taken action after receiving mobile smartphone app ads or text message ads.

AudienceSCAN data is available as part of a subscription to AdMall for Agencies. Media companies can access AudienceSCAN data through the Audience Intelligence Reports inåÊAdMall.

Courtney Huckabay
Courtney is the Editor for SalesFuel Today. She analyzes secondary customer research and our primary AudienceSCAN research. Courtney is a graduate of Middle Tennessee State University.
November 4, 2015 Automotive, Business Development Tags: