Sports car segment is driving towards a revival

“Amongst the most prominent reason for decline in sports cars are the changes in buyer’s taste, with North America and European consumers now favouring SUVs and crossovers.

US SUV sales in 2014, has exceeded 1.5 million for the first time since the 2007. Sales of US crossovers for the same year exceeded 3.8 million.

In China, were currently number plates are limited (one per household) and thus the public is left to either raffle or attain their plates via auctions. If you only get to own one car you’d be wanting to go for the prevalent and most versatile model out there; which, incidentally is why China has become the largest market for the Mercedes GL. 

Lastly, the market sees more niche products (e.g. BMW X4) made available for the “young‚ urban upwardly mobile professionals” to choose from.

These are only a few factors that contribute to the diminishing role of the car being seen as a pure status symbol. This leaves little room for sports cars and makes their come back a tough business to be in. From a traditional view point that is. 

But what if we were to look at this doomed segment in a new and different light? Perhaps it then becomes clear that OEMs have no intention of leaving this lucrative segment alone but are utilizing the core elements (advanced technologies, innovative materials, alternative powertrains) and introducing them to other segments and creating up sale opportunities for special models.”

Frost & Sullivan finds that the Sports Car market is witnessing a revival as OEMs are using performance cars as flagship models and to communicate new concepts.

Traditionally, Motor Shows are platforms to showcase new product models, innovative technologies, materials, alternative powertrains, and lately even new concept measures addressing environmental regulations. It is a boredom cliché so to speak where lately electronic shows; such as, the CES, are leveraged to announce more exciting initiatives such as HMI, autonomous driving technologies, etc. 

What was eye catching however at the Detroit Motor Show was the premium sports car segment making those old cliché announcements exciting once again. Was there more that the sports car of today was trying to communicate?

OEMs are reviving this segment by using it as a flagship model and halo to communicate new concepts through an exciting sports car bringing back focus on things that really matter. Take for example; this year’s Detroit Motor Show – an exemplary showcase of opposing approaches taken by two OEMs showcasing their new sports cars. 

Take the Honda Acura NSX for example, which was developed under the public eye with two sporadic concept versions since 2012, the successor to the original NSX showcased 25 years ago. To cut to the chase, the NSX is a sure attempt to revive the Acura brand by using the NSX as a technology testbed for the remaining Acura models. 

The Ford GT on the other hand rose like a Dark Knight, secretly created in a basement of the company and its possible existence denied by many OEMS; albeit not coming as a complete surprise. Both models were displayed almost next to each other in Detroit, and it was the GT that managed to steal the NSX’s spotlight somehow.

Both the NSX and the GT debuts followed a year of fascinating high-performance and supercar launches, such as; Chevrolet Corvette Z06, Porsche 918 Spyder, Ferrari LaFerrari, and the McLaren P1. 

Some of you might remember the rather sombre speech which Ian Robertson, BMW’s head of sales, delivered only last November (2014), stating that “post-2008, it (sports car segment) just collapsed. I’m not so sure it’ll ever fully recover.” Now why would BMW admit to such defeat when in reality even the premium brand itself is eagerly working to revive its own sports car segment, the Z line-up?

Ford GT 
Ford revealed the GT’s 3.5-liter, twin-turbocharged EcoBoost V-6 engine in Detroit earlier this year. Following a more traditional route, Ford had located the engine in the middle powering the rear wheels through an automatic gearbox. Although not officially confirmed, the GT is said to produce more than 600 horsepower and is likely to be priced in the $200,000-and-above range. 

Ford goes on and promises “The GT will exhibit one of the best power-to-weight ratios of any production car.” This goes without saying that materials play a paramount role in the development of this car with carbon fibre, aluminium and other lightweight materials only supporting Ford’s statement of being at the cutting edge of performance and innovation. The GT is the flagship model of the new Ford Performance division; all in line with plans of releasing 12 new models by 2020, including the F-150 Raptor and Mustang Shelby GT 350R.

The GT rides on new lightweight materials, which ultimately brings us to think about BMW and their sub brand BMW i. The ibrand exemplifies the motto of Efficient Dynamics made sustainable to comply with BMW’s Strategy ONE. BMW’s i8 is purposely placed as the flagship model not only for the entire ibrand but more so used as a halo vehicle with carbon fibre reinforced plastic technologies already trickling down to other core models including the MINI and X brand.

Premium sports car – BMW ibrand
Frost & Sullivan  believes BMW is looking to reinvent its Z line-up creating a new standard of avant-garde and seductive models. Models which are currently being hotly debated are the Z1, Z3 Z5 and the Z7. The Z line-up will benefit from the materials showcased in the ibrand such as carbon fibre mixed with high strength steel, magnesium, aluminium and thermoplastic.

BMW’s sombre outlook on the falling sports car segment, accounts as a key contributing factor considering shared development costs on a new mid-size sports car and thus teaming up with Toyota Motor Corporation to do exactly that. Both confirmed that the project ‘Silk I and Silk II’ has moved to the concept stage after completing a feasibility study. The project is within a broader partnership that also includes co-operation on fuel cells and lightweight technology.

Joint Venture of BMW and Toyota
Potential outcomes for both BMW and Toyota are as follows. The newly developed platform is radically accommodating and flexible for both OEMs. Allowing for the development of a mid-engine mainstream two-seater  disguised as a plug-in hybrid sports car with a six-cylinder engine. 

Rear-end and all-wheel drive platform capable of supporting four-cylinder, six-cylinder and V8 engines, both for front and midsize placement. From a design stand point there are multiple versions to be made from all able to support a two-seater, drop top or coupe. 

BMW will take the lead by replacing the Z4 with the new Z5 with a possible Hybrid eDrive. Furthermore, the 6 Series Coupe will reap its benefits from this joint venture as it is deemed to become a direct competitor to the Porsche 911.

In summary
There is a paradigm shift in the purpose of the sports car and as such, many premium OEMs are now using the image of the sports car to revive their own flagship image. This has already been seen in practice and is soon to be replicated by other OEMs in an attempt to close the gap. 

There will be no more traditional saloons and sport cars will act as the main testbed for innovation technologies especially for material, intelligent design and powertrain. The halo created by innovative light weighting philosophy and the associated technology is used by some of the leading OEMs to span across entire model line-ups. 

Greener technologies will become the norm, evident from the latest Detroit Motor Show, where a number of greener sport cars were showcased, with the Chevrolet showing a redesigned Volt plug-in hybrid, and Mercedes-Benz launched the 2016 C350 plug-in hybrid. 

Innovative and forward thinking technologies are finally coming around to the performance car segment, developing cars painted with a slighter ‘greener’ brush. The sports car of the future is destined to become the flagship model and technology testbed by creating a halo that takes expensive niche propositions to mass market them across their traditional model line up in a phased manner.

Authors: Natalie Sauber and Benny Daniel, Frost & Sullivan.