Automakers may be aiming at the wrong buyers
The graying of America and a growing reluctance among young adults to purchase a car are creating a disconnect.
Considering the number of car commercials that feature families with babies, poignant teenagers with new driver's licenses, even hip-hop rodents and the like, you'd think legions of young Americans were jazzed about buying vehicles. Well, according to some new research, while younger adults may be the demographic advertisers target the most, older consumers are actually the ones purchasing those new cars.
According to Michael Sivak, a research professor with the University of Michigan Transportation Research Institute, a number of factors are at play in this trend. The economic downturn has reduced vehicle sales overall, although they started to rebound in 2011.
However, the number of young people with licenses has also declined. In 1983, 91.8% of 20- to 24-year-olds had a license. In 2011, the figure was just below 80%. At the same time, the number of people ages 60 to 64 with licenses has grown from 83.8% in 1983 to 92.7% in 2011.
Part of that shift is linked to another growing trend: Younger people are abandoning car ownership in part because they can't find stable, well-paying jobs. Many are also fed up with rising fuel prices and the monthly costs of maintaining a vehicle.
Instead, they're taking to public transportation, moving to urban or suburban hubs with food and entertainment within walking distance, or joining the growing number of workers who telecommute.
"These young non-drivers are weaning themselves from cars," Motor Trend noted last year, "and won't necessarily rush to buy them when the job market improves."
Older Americans, with their continued purchasing power, are staying loyal to domestic car brands. According to a study by TrueCar.com, top brands for that demographic are Buick and Cadillac, both made by General Motors (GM), as well as the Lincoln line produced by Ford (F).
"Seniors are looking for a luxurious and comfortable vehicle from a brand they are familiar with and trust," said Jesse Toprak, the company's vice president of trends and analysis. "Many seniors grew up with these iconic American luxury brands in their parents' garage."
Sivak says the auto industry's marketing efforts would find more success if they focused on drivers 55 to 64 years old.
In a press statement he said: "The emphasis on this relatively older age group is further supported by the expected continuation of the graying of the population and the consequent continuation of the increase in the number of older licensed drivers."
The American Dream is dead -- the young have abandoned ever owning a house, a car and having a good job.
Soon our culture will be like that of Mexico
I make good money, yet I'd never buy a new car. It's just crazy, you can get a NICE car with 100k on it and drive it to 200k, then sell it and get another.. All for $10,000 or less.
Current car is a 2005 Altima 3.5 with a sweet 5-speed manual, full leather, Borla exhaust, power everything and sunroof. All for $8000 + $1000 4 new tires.
I'll let some sucker pay the $35,000 for my next car and pay 1/3 of that for it in 5-6 years.
One of my neighbors is an elderly Chinese lady who went to China and came home describing the ant like procession of bicycles going to work in the morning. Lets see most of the stuff we consume today in America is made in China so now for those too dumb to figure out what that means our lifestyles and income levels will arbitrage out to the Chinese levels. So many Americans figured they were just getting a good deal with free trade and now they have to admit it really wasn't quite so free was it? So Pedal your butts to work because cars, insurance, parking is soon becoming out of reach for many young working Americans. That $8 dollar an hour lifestyle is rapidly becoming our new norm. Make sure you thank your political representative for selling you out.
I typically buy 3-7 year old cars and drive them till a major repair exceeds what I believe I will get the use from it, then I sell or junk the car.
I bought a 10 year old Delta 88 in 1987 with 80,000 miles for $1,400. I drove it to 246,000 and junked it. With maintenance added my monthly ownership less gas was about $35/month for the 10 years. It was a very nice car.
However, I personally haven't seen any major dropout when it comes to young folks buying cars, new or old. In fact, it seems that I have never seen so many young folks with expensive cars. 7 Series BMWs and Mid-Level Mercedes all over the place. Same for the top Lexus, Infinity, and Acura Models. North America car sales have soared since the downturn. As has the profits of those selling Cars, American or other wise, Companies are doing well. Europe however is a major Drag........
I buy a new car every few years rather than buy someone elses problems with a used car.
Buying new cars is a bad investment, but it`s my only vice.
Nothing wrong with buying a new car. Pay cash and enjoy it. $20k plus for a car is silly.
Used cars will require brakes, shocks, belts,battery, tires and any other issues the previous own "traded in" sooner or later.
You don't need a drivers license sitting in moms basement playing xbox waiting for the boomers to croak off finally.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The stock market began the new week on a cautious note. The S&P 500 lost 0.3%, but managed to erase more than half of its opening decline. Thanks to the rebound, the benchmark index reclaimed its 50-day moving average (1976.78) after slipping below that level in the morning.
Equities slumped at the open amid a couple global developments that dampened the overall risk appetite. Continued student protests in Hong Kong and a potential response from China weighed on the ... More
More Market News
US markets were able to rally hard and largely trim the day's losses. Meanwhile, a bounce in crude oil could be in the offing.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'