A Blog by Jonathan Low


Apr 12, 2014

Why Sales of Convertible Cars Have Collapsed

Oh no! Is it the internet's fault again?

Sales of convertibles have plunged 44 percent since their peak a decade ago. Where most manufacturers used to offer a convertible model for every hard top, now they usually dont bother.

Part of the reason may be that young people, who most often embraced the rag-top's image of fun and rebellion now look to the net for that type of self expression. Another reason is that the rising cost of gas, insurance and autos themselves, in addition to the worldwide trend towards urbanization means that fewer people in developed nations want to own a car, even if they can afford one.

On top of that, the congestion that bedevils every major metropolitan area everywhere means that drivers are more likely to be inhaling others' exhaust than taking deep draughts from the thrill of the road.

The convertible's decline is as much symbolic as economically impactful. It suggests that the openness it represented may have been curtailed in a more complicated, fretful world. We prefer to enjoy what freedom we have anonymously and from behind the seemingly safe remove of the small screen, rather than out there where everyone can both see and touch us. JL

Chris Reiter reports in Business Week:

"Young people don’t see the automobile as a route to freedom. Nowadays, electronics more often play that role.”Convertibles, such as the Ford Thunderbird in the 1991 film Thelma & Louise, have epitomized the promise of freedom that’s long fueled the popularity of the automobile. From James Dean’s Porsche (PAH3:GR) 550 Spyder to Steve McQueen’s Jaguar (TTM) XKSS, ragtops have been associated with rebels of all stripes. Nowadays, however, a sport-utility vehicle with a big sunroof is more likely to be the object of desire as wind-in-your-hair motoring becomes passé.

Worldwide sales of convertibles have plunged 44 percent from their 2004 peak, to 465,800 cars last year—just 0.7 percent of all cars globally—while SUV deliveries have more than doubled, to 15.4 million, according to data from researcher IHS (IHS). Buyers in the U.S. and Europe, the biggest convertible markets, are opting for more pragmatic vehicles as the automobile wanes as a symbol of social status. And consumers in fast-growing markets such as China and India—which increasingly are dictating the strategies of automakers—prefer the enclosed comfort of SUVs and sedans as a barrier to smog and a buffer from crowded streets.
“Most convertibles are not really used for open-top driving but rather for giving the impression of being somewhat wild-at-heart and sporty,” says Christoph Stürmer, lead analyst for PricewaterhouseCoopers’s Autofacts forecasting service. “This image has now been taken by SUVs. Convertibles will stay around as a high-end niche, but fashionistas will keep moving on.”
The fading allure of convertibles has prompted carmakers to drop many open-air models. Volkswagen (VOW:GR) will permanently park its Eos hardtop convertible in coming months, according to people familiar with the plans who were not authorized to disclose them. The German automaker also doesn’t intend to build the top-down BlueSport concept car that it unveiled in 2009 because of the fading appeal of convertibles, according to those people. Chrysler’s (F:IM) dramatic makeover of its 200 midsize sedan for 2015 won’t have an open-air version, unlike the current generation.
Peugeot (UG:FP), the second-largest carmaker in recession-scarred Europe, has said it won’t renew the convertible 308 CC and 207 CC models when production of the current models stops next year. France’s Renault (RNO:FP) halted making the Wind convertible last year and is also winding down the ragtop version of its Megane compact. Even Toyota Motor (TM), the world’s top-selling automaker, has only one current convertible, a Lexus. “There used to be a convertible version of every bestseller in Europe; now, you can barely find one,” says Piero Agnello, who owns a shop near Milan that sells baby supplies and who previously cruised through Italy in an open-top Peugeot. “The feeling of driving a convertible was great—exhilaration, freedom. But with the crisis still going on, you don’t even consider buying a convertible car. You look for roomy cars for your family.”
Autos were generally open to the elements until the 1920s, when closed vehicles became popular. The shift was cemented in the 1930s, when General Motors (GM) began promoting its steel “turret top” as a safety feature. The role of pure convertibles was further diluted with the debut of the sunroof in the 1960s.
“When it comes to the image of the auto as an object of desire, it’s always been the convertible,” says John Heitmann, president of the Society of Automotive Historians and a professor at the University of Dayton. But, he says, “young people don’t see the automobile as a route to freedom. Nowadays, electronics more often play that role.”
Emerging markets have much different issues to contend with, making convertibles impractical and unappealing to many buyers. “When you visualize driving a convertible, you think of open roads and pleasant driving conditions; in India, you have neither,” says Deepesh Rathore, the New Delhi-based director of Emerging Markets Automotive Advisors. “In cities you’re mostly stuck in traffic, and if you’re in a convertible, you’ll be inhaling exhaust fumes. Plus, you don’t want to find yourself next to a bus where someone may throw something into your car.”
Similar concerns affect drivers in China, the world’s largest car market, where cities are seeking to reduce pollution levels that in recent years have lead to occasional warnings for residents to remain indoors. Carmakers on the mainland are boosting production of the next big thing: SUVs.
Still, the convertible won’t completely go the way of the Model T. For icons such as Ford Motor’s (F) Mustang, a convertible is an integral part of the package. And the decadence of open-air driving is crucial to the image of luxury brands, which are adding new ragtops. BMW (BMW:GR) will introduce the $73,425 M4 convertible later this month at the New York International Auto Show, and Audi (NSU:GR) last month began rolling out a convertible version of its A3 compact. During the past two decades, Mercedes-Benz parent Daimler has increased its offerings in the category to five models, including the $208,000 SLS roadster, from three. “Our family of convertibles is essential to the fascination of the Mercedes-Benz brand,” says Ola Källenius, the marque’s sales chief. For mainstream brands, though, much of the thrill is already gone.


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