Driving with the Top Down
If you’re a movie buff like I am, you’re familiar with recurring scenes in old Hollywood films of a footloose American driving the California coastline in a bright-colored convertible with the top down, hair blowing in the wind. Driving a convertible on the open road is a quintessential American experience.
But as China takes center stage in the global auto market, accounting for one quarter of all sales last year, automakers are increasingly focused on meeting Chinese consumer preferences. Between air quality and a penchant for the more practical, a lack of affinity for convertible cars in China might just kill off the future of the beloved ragtop.
Air Pollution is Choking Convertible Sales
Convertibles are not common in China. Not one convertible was counted among the 10 most popular cars sold in China in 2018. A convertible didn’t even break into the top 100. The question is, why? Much of the answer lies in China’s air poor quality.
Although the Chinese government is working to limit and remediate air pollution, it’s a massive uphill battle. Over the last 10 years, China’s air quality ranged from unhealthy to hazardous, particularly in many of the large cities where you’d be more likely to find a customer with the interest and wherewithal to buy a convertible car. Rather than seeking the wind in their hair, residents are just trying to avoid what the United States Embassy in Beijing reports is “particulate matter small enough to lodge in the respiratory system.”
“American Freedom” isn’t Relevant (or Affordable) in China
Driving with the top down is a symbol of American freedom. But it’s an experience that lacks cultural relevance in China; Chinese drivers have consistently stuck with more practical and functional passenger cars, both locally manufactured and imported.
Some of the most commonly sold cars in China over the last five years are the Volkswagen Jetta, the Toyota Corolla, and the Wuling Hong Guang. The Wuling Hong Guang S3 is an SUV made by GM’s local joint venture, SAIC-GM-Wuling, in China for the Chinese market and it retails for under $9,000. The top sellers in China aren’t flashy and fast, but rather comfortable and reliable – two adjectives not normally used to describe convertibles.
Some of the wealthiest Chinese are apt to pursue high-end convertibles such as the 2017 Ferrari America, the 2017 Lamborghini Aventador, and the 911 Turbo S Cabriolet Porsche at status symbols, but the average Chinese consumer cannot afford it, a hurdle compounded by high import taxes that hike up the already exorbitant costs of luxury convertibles.
Despite the niche demand, a new survey by McKinsey & Company indicates that Chinese car buyers may be growing less status-conscious. Nearly half of consumers see cars “as necessities” rather than a status symbol, a trend tilting against the convertible market.
China’s Car Market is Reshaping the Look of the Industry
At 79 million units, global auto sales hit a new record in 2017. A whopping one-quarter of those sales were in China. With this shift, the China consumer takes center stage in terms of automobile design and marketing, as demand in China drives future sales for the world’s automakers.
“China could play a pivotal role in transforming the existing automotive and transportation structure that has been in place for over 100 years.”
– Cheng Wei, CEO of Didi Chuxing, China’s premier car ride service, at the April 2018 Beijing Auto Show
International automobile makers are increasingly competing with Chinese manufacturers who are also innovating with Chinese consumers in mind. As the Chinese market is positioned for more growth, manufacturers will strategically focus their products on the needs of the Chinese consumer – affordable, safe, passenger cars that are better for the environment. Convertibles don’t readily fit that mold.
Is the Chinese Market the Only Factor? No, But It Might As Well Be.
While manufacturers focus on demand in China, the flame in the American love affair with convertibles is also burning less brightly for reasons of safety and overall practicality.
Between 2011 and 2015, annual sales of convertibles in the United States dropped 7 percent, even as the U.S. auto industry grew by 37 percent. That decline in convertible sales seems to reflect a shift in the criteria that American drivers prioritize when looking to purchase a car. In recent years, American buyers are opting for safety features, fuel efficiency, sport-utility vehicles, or compact cars in larger numbers than those seeking the experience of a convertible’s open frame, carefree spirit.
So, reduced sales of convertibles can’t be blamed entirely on the Chinese market. But lack of demand in China may just be what kills the convertible’s future. So hold on to those old Corvettes and Mustangs, and pretty much any newer convertible because they will all soon be classics.