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Are Automakers Overlooking the Real Buyers?
Posted By Patrick Kiger On June 5, 2013 @ 1:30 pm In Money Talk | Comments Disabled
If you watch much TV, you’ll notice that most car commercials seem to be aimed either at twentysomethings in search of adventure and excitement or at parents with young kids. But automakers might be smarter to make more commercials resembling Lincoln’s recent spots featuring luxuriantly gray-haired Mad Men star John Slattery.
That’s the upshot of a newly released study by the University of Michigan Transportation Research Institute, which finds that boomer drivers are the most likely of any age group to buy a new car.
UMTRI research professor Michael Sivak, who looked at car purchases from 2007 to 2011, found that the probability of new vehicle purchases by boomers – who were 55 to 64 years old at the time of the study – actually increased over that time period. So did their share of the new-vehicle market – from 18 percent to 23 percent. In 2011, he found, one of every 15 boomers bought a new vehicle, compared with just one of every 221.8 Americans between the ages of 18 and 24.
Drivers between 65 and 74 actually had nearly as high of a probability of buying a new car as did boomers.
As this NBC News story notes, Sivak’s findings run counter to the auto industry’s strategy of heavily targeting twentysomethings, known in demographic parlance as Millennials or Gen Y consumers. Car makers are spending increasing amounts of money to target these young buyers, not just through TV spots but with social media such as Facebook as well.
But the economic downturn of the late 2000s hit young workers even harder than it did older ones, and those effects still linger. According to the Bureau of Labor Statistics, workers between 20 and 24 had an unemployment rate of 14 percent in April, and those 25-34 had a jobless rate of 7.1 percent. Only 5.7 percent of workers over 55, in contrast, were jobless in April.
That might explain why older drivers, who’ve fared better in an uncertain climate, are buying more cars. In 2010, drivers 50 and over spent $87 billion on vehicles, compared to $70 billion by drivers under 50, according to this study by the A.T. Kearney Global Consumer Institute.
So what kind of cars are boomers actually buying? Automotive news website Edmunds.com reported in 2012 that while automakers have been rushing to develop cars laden with Internet-connected gadgetry and touchscreens, older drivers seem more interested in safety, reliability and fuel economy. Deloitte regional automotive research leader Joe Vitale told Edmunds.com that instead of performance and flashy features, boomers “tend to be focused on utilitarian things.” One reason: many of them made their initial auto purchases in the 1970s, and felt burned by poor-quality vehicles such as the Ford Pinto.
“In fact, they’ve really learned to be focused on the things that had frankly turned them off when they first entered the market,” Vitale told Edmunds. “They remember vehicles that were poor quality, badly designed, unreliable.”
Here are AutoWeek’s picks for the best cars for boomers in the 2013 model season.
Photo: 3Water via Flickr.
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