Premium brands have led convertibles global market share since
2014; consumer preferences influence regional sales
The global convertible car market has peaked, according to new
analysis by IHS Automotive, the leading global source of critical
information and insight to the automotive industry and part of
IHS,Inc. (NYSE: IHS). 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.
Additionally, 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’s 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.
“The 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,” 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.
“There 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,”
Urquhart said.
American dream continues as North America leads global
market
“North 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,” Urquhart said. “However, 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.”
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.
“We’ve 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’ preferences stymied convertibles as a
commerciallyviable proposition for many OEMs, many players needed
to withdraw from the shrinking market,” 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.
“As we move forward,” Urquhart said, “we 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.”
About IHS Automotive
(www.ihs.com/automotive)
IHS Automotive, part of IHS Inc. (NYSE: IHS), offers clients the
most comprehensive content and deepest expertise and insight on the
automotive industry available anywhere in the world today. With the
integration of Polk in 2013, IHS Automotive provides expertise and
predictive insight across the entire automotive value chain from
product inception—across design and production—to the sales and
marketing efforts used to maximize potential in the marketplace. No
other source provides a more complete picture of the global
automotive industry. IHS is the leading source of information,
insight and analytics in critical areas that shape today’s business
landscape. IHS has been in business since 1959 and became a
publicly traded company on the New York Stock Exchange in 2005.
Headquartered in Englewood, Colorado, USA, IHS is committed to
sustainable, profitable growth and employs about 8,800 people in 32
countries around the world.
IHS is a registered trademark of IHS Inc. All other company and
product names may be trademarks of their respective owners. © 2015
IHS Inc. All rights reserved.
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