"New GfK research shows that Generations X & Y represent 63% of new vehicle "intenders"- those who plan to buy a car in the next 12 months"
"Exciting" is #7 for Gen Y, versus #21 for Boomers; and "Technologically Advanced Features" ranks at #12 for Gen Y compared to #22 for Boomers"
"Looking just at small cars, the GfK study found that 29% of Gen Y consumers are small car intenders, versus 19% of Generation X and 19% of Baby Boomers.
My interview with Jeff Campana focused on generational differences among car buyers. Check out the interview below:
When it comes to car buying what differentiates Gen X & Y from Baby Boomers?
What we saw is that Gen X & Y are still interested in buying cars. Just like Baby Boomers they still want quality and value. We thought they placed a higher priority on safety and technology, not on price. Gen X & Y want to have those technology devices in their vehicles. Another interesting thing we saw despite fuel prices over the past two years their demand isn't just based on fuel economy.
Why do you think interest in small cars has increased across the board?
It is not a bare bones car. Based off of our research the compact car segment demand is strong. Gen X & Y felt subcompacts were not acceptable to them. The compact car segment is a decent size and a good compromise for them. They are not trying to go for the small and cheapest car but something that is in their price range.
It's obvious that technology in vehicles is important to Gen X & Y. But does the price of these added features turn away the buyers?
You have to be careful. They still have a price point they want to hit. Car companies need to offer technology innovations at reasonable prices. What we see is that Gen X & Y buyers like to have the latest technology in their vehicles. Luxury car buyers want new technology because of status. For Gen X & Y buyers, the benefit has to be clear to them. These buyers are not car people. These Gen X & Y buyers are not hardcore car enthusiasts. It is important to have technology that is easy to understand.
What vehicles are attracting Gen Y and X? Midsize sedans? Crossovers?
What we see in our data is that the midsize sedan category is the largest segment. When you look at Gen X and Y it is still a segment that is of high demand. Gen X has an interest in both the compact and midsize sedan categories. The midsize sedan category for Gen Y is the number two segment of interest for them. It is a case based on the price point trade-off. Gen X has more of an interest in crossovers than Gen Y. The crossover segment is the number three segment right now. We've seen that buyers who look at small cars also look at small crossovers.
Is driving as important to Gen X & Y as it was to Baby Boomers?
I've seen a lot of articles about whether driving a car is important to younger people. Those buyers are interested in fun to drive and exciting vehicles. The demise of the car among young people is misstated. It is still subject to debate about whether or not cars are as important as they once were. We've asked people to prioritize purchases and noticed that cell phones and computers are rated more important than cars. But cars are still important to young people.
Based off of car sales I would say those younger car shoppers are focused on excellent gas mileage. Is this true?
We do see that people are looking at fuel economy. A lot of manufacturers are offering better fuel economy. A lot of people have gravitated towards those vehicles. Once people focus in on which segment they want to buy in the reason for buying a car is economic rather than environmental. The movement for hybrids was based more on pocketbook issues. I think manufacturers are being smart about producing higher fuel-efficient vehicles.
What are your thoughts on the semi-luxury category? Acura ILX & Buick Verano?
I am glad you asked that question. We do see interest in that market around younger people. If manufacturers move down to a lower price point do people still feel it is true to the brand? Some of the luxury manufacturers are bringing the cars they build in Europe over here. In order for Gen X & Y to pay that higher price they have to believe that it is true to the luxury brand name. If I pay more for a luxury brand it has to be a better overall car compared to the non-luxury brand. Buyers ask "Is it the same thing I can get with a midsize car?", "In terms of performance and quality of materials does it still feel like a luxury car to me?". Gen X seems to have more of an interest in luxury cars.
Is having AWD a factor when it comes to buying a car among Gen X & Y?
These buyers are not big car enthusiasts. Is it something that is important? To be honest we haven't really seen it as a purchase motivator. AWD techonology is offered and. It might appeal to them. There is a big price step-up that some people aren't willing to make that trade-off. For most manufacturers its been a huge price difference compared to a non-AWD model. The price of choosing AWD has to come for it to catch on with Gen X & Y. If the AWD trend continues from the higher segments to the smaller segments it would help create demand for cheaper systems. I agree that there is a performance aspect to choosing a vehicle with AWD. But fuel economy has the biggest impact on whether a person buys a vehicle with an AWD system. Having AWD does affect the car a lot in terms of fuel conomy, weight, and handling. Subaru has done an excellent job at offering vehicles with AWD systems at a reasonable price and that have good fuel economy.
I want to thank David Stanton for setting up this interview. I also want to thank Jeff Campana for taking the time to answer my questions and chat with me about the auto industry.
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