Drop your top: Convertibles poised to make a comeback
Automakers are rolling out new convertible models at a time when many consumers are gaining confidence in the US economy and have more money to spend on less-practical big-ticket items, thanks to juicy stock market returns.
At the Detroit auto show Buick, Alfa Romeo and BMW are all showing off glitzy open-air models to capitalise on that newfound confidence, and industry analysts expect more to come.
IHS Automotive, an industry consulting firm, predicts there will be 60 different convertible models in the US by 2020, 15 more than last year and the most since at least 2000.
"New models drive sales up," said IHS senior analyst Stephanie Brinley, whose firm expects convertible sales to rise 63 per cent from 152,400 last year to 248,000 in 2020.
Following the recession, sales of convertibles tailed off. Automakers, realising that it wasn't socially acceptable to flaunt wealth while others were struggling, rolled out few new ragtop models after the recession. There were 48 six years ago; now there are 45.
As vehicle development budgets were cut during the recession, convertibles were early casualties, says Brinley.
But now, with unemployment down and the stock market and luxury car sales up, automakers are looking for niches such as convertibles to increase sales in a competitive market. IHS estimates that convertible sales grew nearly nine per cent last year.
"The fear of conspicuous consumption is dead," says Michelle Krebs, senior analyst with AutoTrader.com. "Everybody's getting back into performance and the sexy, flashy mode. Convertibles play into that."
Convertibles range in price from around US$20,000 to about US$850,000 for a Porsche 918 Spyder.
Indeed, there's more money available for such frivolity. US household wealth recovered to US$81.3 trillion by the end of September, the latest government figures available. It plummeted in early 2009 to US$54.9 trillion as the stock market and home values tanked.
But the market has grown dramatically since the recession ended, with the Standard & Poor's 500 index more than doubling. Also, a well-known measure of consumer confidence shows that consumers feel the best they have about the economy in the last seven years.
middle class unaffected
However, data shows that the gains have mostly helped wealthier households, leaving middle-class wealth largely unchanged. Luxury car sales rose 15 per cent last year, the biggest gain since the recession, according to Autodata Corp.
At the Detroit show, General Motors unveiled the Cascada, a Buick version of a stylish Opel convertible from Europe.
Fiat Chrysler is showing a bright yellow Alfa Romeo 4C Spider with a removable carbon fibre hardtop. The Spider will be hand built in limited numbers in Italy, and can shoot from zero to 60 mph in 4.1 seconds.
The Spider goes on sale this summer, but will be difficult to get. Reid Bigland, the brand's North American chief, says only about 3,000 Alfas will be produced for global sale this year; around 40 per cent of those will be convertibles. Pricing wasn't released, but will run between US$60,000 and US$85,000.
BMW is also revealing a refreshed M6 high-performance convertible at the Detroit show.
The four-seat Buick is the brand's first convertible in 25 years. It has an insulated soft top that can be opened in 17 seconds with the car travelling at up to 31 miles per hour. It also has a turbocharged 200 horsepower engine and a safety system that deploys rollover protection bars behind the rear seats if the car detects that a crash is possible.
The Cascada is just what Buick needs to keep its sales momentum going, especially in the prime convertible market of Florida, says Ed Williamson, who runs a Buick-GMC-Cadillac dealership in Miami.
Currently, Williamson says he has no convertible cars to sell against the ubiquitous German and Japanese models. "We see an awful lot of Lexus convertibles in this market," he says.
The convertible also helps Buick continue to change its once-stodgy image with a sportier, younger vehicle, said spokesman Nick Richards. The average age of a Buick buyer has fallen from 62 to 59 in the past six years.
Convertible sales should rise as the US economy continues to gain strength, GM product development chief Mark Reuss said. "People naturally tend to look at things that are great expressions of freedom, and convertibles are one of those."