Sales of dropheads have halved. So is the convertible on the skids?
Nothing says ‘I’m living the dream’ like driving a convertible. There is no rational or practical reason behind it other than to demonstrate to the world you have reached a point of affluence, crisis or sheer devil-may-care indifference that can only be manifested by driving into a roseate sunset with a piece of inappropriate headwear wedged in place to prevent your hair being ruined. As pointless indulgences go then, convertibles are right up there with chocolate teapots.
During the so-called boom years of the previous decade, worldwide sales of convertibles soared. By mid-decade, peak sales grew to over 800,000 per annum – outperforming (in percentage terms) all other sectors in the US market, for instance. Car manufacturers were quick to capitalise – soon just about every mainstream manufacturer was offering a drophead. There were a number of reasons for their popularity of course. Credit was cheap, worldwide economies were surging and a growing sense of optimism fuelled a hedonistic rush. In addition, folding roof technology had reached a point that manufacturers could offer it even on relatively low-priced models – giving owners added security and a more saloon-like ambience. But by their very nature, indulgences tend to be the first things jettisoned when global economies hit icebergs and unsurprisingly, from 2008 onwards, sales figures have slid in the most precipitous manner – last year a mere 50% shadow of the 2004 peak at 465,800.
Convertibles have always been a tricky sell however. The West Coast US states, the UK and the more affluent Northern European countries being the largest markets for dropheads. Southern Europe is too hot and in many regions, too impoverished, and emerging markets like India and China have too many environmental and social issues. Convertible sales are also incredibly weather sensitive. In countries with higher than average rainfall, there is simply no point. If its too hot, you fry. In France, overt displays of affluence are viewed as a social faux pas. Even without economic storms, all it took was a bad summer and inventory piled up. As for selling one in winter…
Fickle is a word that defines the convertible car buyer. US Analysts, Polk have determined that only one in five owners replace their convertible with another. Those that do however, will often jump to the newest/latest – sales of new models peaking in the first year, then falling faster and harder thereafter. So while the profitability potential with convertibles has typically been high, the risks have been too.
Today, the mainstream convertible is being assailed from all sides. Weakening demand on the back of the financial crash, fears over sun exposure, impracticality, the decline of the model as a status symbol – especially amongst the young – and of course, the inexorable rise of the crossover SUV. The traditional image of the convertible was one of the individualistic hedonist – the playboy, the femme fatale. Today, the fashionable status-seeker gravitates towards off-roaders or at least vehicles that suggest ruggedness. This trend is echoed in the predominance of the so called ‘hipster’ bearded male in his lumberjack chic, craft beer and fixed-gear – Stoke Newington lifestyle. It’s not genuine ruggedness he wants to assert, merely the veneer of authenticity. Ironically, convertibles have become uncool amongst those for whom such things matter.
It isn’t all bad news though. The sales crash has largely been confined to the mainstream marques, causing VW, Peugeot and Renault to cancel plans to replace existing models. Further up the social scale, the story is being played out differently. Premium marques are continuing to introduce new convertible models and customers are continuing to buy them. According to analysts at PricewaterhouseCoopers; “Convertibles will stay around as a high-end niche, but fashionistas will keep moving on.”
Actually, we’ve seen this happen before. By the tail-end of the 1960’s convertible sales dropped dramatically, sinking to minuscule levels throughout the 1980’s. However, tastes and demographic affluence shifted in the 1990s, fuelling the surge that peaked during the previous decade. Life is about to get tougher for the mainstream droptop, but in fact what we’re witnessing here is more of a re-alignment – a return to the natural order. The convertible isn’t dead or even dying, it’s merely returning to its upper class roots having satiated its grubby fling with the common people. And with middle incomes being hollowed out under austerity, only the seriously affluent can now justify their chocolate teapots.
Sources/quotes/data: Businessweek.com/Polk/IHS Automotive