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Generation Y is known for being a tough market to crack for automakers, but a new study suggests “millennials” are looking to buy or lease a new car within the next three years.
BMW and other luxury automakers, are making an active effort to work more closely with those in new media. The idea is that by courting bloggers and tweeters, they stand a better chance of reaching a new group of younger buyers that can’t be targeted through traditional media platforms such as TV, radio and print publications.
Considering that many members of Generation Y (the demographic group born between the early 1980s and mid 1990s), spend much of their time connected to the web, they tend to favor vehicles that provide advanced in-car technology and connectivity; via handheld devices, to the outside world.
At least that’s the findings from a study conducted by Deloitte LLP, which said out of a global survey (which included 1500 Gen Y, X and Baby Boomers in the US, plus some 250 Gen Y in China and 300 in Europe), 57 percent of Gen Y members preferred an “electrified” vehicle. According to the study, the most important interior features were dash mounted controls, with 73 percent of respondents saying they preferred touch-screen interfaces.
In addition, Deloitte’s vice chairman Craig Giffi, says that Gen Y members are also more likely to be drawn to Hybrids than conventional internal combustion propelled cars and trucks, though he believes this is less of a “green” factor and more of an economic one, saving fuel and saving money, versus saving the planet.
However, for automakers, who are keen to cater to the 80 million or so Gen Y members (which represent the single largest demographic group since the Baby Boomers), it might take more than fancy technology to get them behind the wheel, since statistics show, that Gen Y on the whole, are less interested in cars than their predecessors.
“It’s no longer a foregone conclusion that we will be able to sell cars to a large and emerging demographic,” declared Ford’s President of the Americas, Mark Fields, during Deloitte’s Gen Y conference in Detroit. Fields was refering to the fact that in a 30-year period between 1978 and 2008 the number of 16 year olds getting a driver’s license shrank by 16 percent.
Fields also said that for Gen Y, the smartphone has now replaced the automobile as the “ultimate mobile device.” He believes that Gen Y is more tech savvy and relatively affluent than previous generations and to dismiss them as serious buyers is to “ignore them at your peril.”
He also said during his speech that “if we’re going to continue to grow as an industry and a company, it’s really important we reach this consumer.”
And to Ford’s credit, investing heavily in both in-car connectivity (via its MyFord Touch and SYNC) systems as well as increasing overall fuel efficiency via proliferation of its EcoBoost engine technology, has definitely raised the company’s profile with consumers in recent years, as well as boosting market share and profitability.
Collectively known as Generation Y or Millennials, those born after 1980 appear to be showing an even greater preference for ‘foreign’ brand cars in North America than even Gen-X members or the baby boomers before them.
According to a 2009-2010 study by Santa Monica, CA based data firm TrueCar.com, vehicle brands most likely to be considered by buyers aged between 18 and 27, were Japanese, Korean and German.
Toyota’s youth-oriented Scion brand had the biggest penetration among Gen Y car buyers, some 21.2 percent, followed by Mitsubishi, Mazda, Nissan, Volkswagen and Kia.
The only domestic manufacturer to feature in the top 10, was Ford, with it’s Focus compact. Part of the reason why such import brands are favored among youth, is believed to result from a higher level of customization and personalization offered, as well as a greater level of integrated technology, something that Scion, in particular actively promotes. “Our young buyers are looking for ways to connect with their personal devices,” stated Craig Taguchi, a spokesman for Scion.
Automakers have been keen to attract Millennials to their offerings, because even though they currently don’t wield a great deal of purchasing power, they are considered product savvy early adopters; defining trends that later become mainstream. Plus, as they get older and their earning potential increases, Gen Y members are expected to become the largest and most influential group of consumer spenders, which means they’ll be the ones most likely to spend money on new cars.
[Source: Detroit News]
Generation Y has come of age and are now setting their sights on what new car to buy. And according to research firm AutoPacific, younger car buyers are choosing vehicles made by Toyota, Honda and Ford.
Also among the top 5 brands are Chevrolet and Nissan. Making their way onto the 2010 Gen Y (people born around 1983) list are Kia and Hyundai, who squeezed out Mazda and Jeep for a coveted spot on the list.
“The fact that Generation Y has a bigger footprint in brands like Hyundai and Kia than in past years means these brands are definitely doing something right to gain Gen Y’s attention,” says George Peterson, president of AutoPacific.
The Ford Fiesta is popular with this generation, not only because of its size and cost, but also because it’s featured sponsorship on popular shows such as American Idol and various online contests and promotions.
You’ll find the results of AutoPacific’s top 10 list after the jump.