Despite the market's ups and downs, high-priced sports cars have fared relatively well in the U.S. since 1995, when the segment's sales hit a 15-year low.
Since then, luxury sports cars have increased their share of market from a tiny 0.4% to a surprisingly high (considering their price and impracticality) 0.7% so far this year. And as small as it is, this segment is one of only two car sectors to increase share while light trucks have grown to a dominant position in the U.S.
They are little more than a fantasy for the vast majority of buyers, with prices ranging from $30,000 to well over $100,000 — not including exotics in the multi-hundred thousand-dollar ranges — but they garner attention far beyond their customer base.
But being a small-volume segment comprised largely of toys for the most affluent, it is highly dependent on new entries, or major redesigns to long-time icons such as the Chevrolet Corvette. It also makes for a volatile, feast-or-famine pattern for the product cycle of most cars in the segment.
Unlike other market niches, it's not unusual for a new sports car to see its sales go into a severe decline only two years after a successful launch. The few that have maintained relatively stable segment share since 1995 — the Corvette and, until recently, the Porsche 911 — did so through major mid-cycle product cycle upgrades or significant new trim levels, often featuring a higher-performance engine. But compared with others, this segment has few long-time players: Eight of the 13 cars currently on sale debuted for the first time in the U.S. after 1995.
European marques re-ignited the segment in 1996, beginning with the introduction of the BMW Z3 and followed by the Jaguar XK8. The Porsche Boxster and Mercedes SLK debuted the next year.
Replenished with hot new models, the segment's sales surged. A 10% rise in 1996 was followed by a 30% gain in 1997. New product reigned supreme among the luxury sports cars. The popularity of the segment then begat more new models, such as the Audi TT and Honda S2000 in 1999, and it posted sales and market share gains all the way through 2001.
Then a temporary dearth of new product stalled growth. Sales and market share declined in 2002 and 2003, but market share remained well above 1995's trough, showing car buyers hadn't completely lost interest.
New products started appearing again in the second half of 2003. The Chrysler Crossfire coupe was introduced mid-year and the Cadillac XLR roadster bowed in the fall. So far in 2004, the segment's sales are up 4.3% and market share is ahead of year-ago.
Unfortunately, new-product plans don't show much for the near-term. There will be some redesigns to existing cars, including the upcoming '05 Corvette, but the last 10 years demonstrates this segment is extremely dependent on fresh new models. Thus, the luxury sports-car segment could be just about ready to peak before falling into a long-term decline. Unless a surprise new entry springs up to become the new sports car darling — and perhaps propel the segment to a whopping 0.8% of the market.
