A study released by automotive consulting firm AutoPacific, Inc. captures the key opportunities with Generation Y in the future of the automotive market. As this generation of new vehicle buyers is predicted to grow from 9 percent of the current market to 19 percent of the market by 2013, understanding Generation Y is becoming even more important.
A highly social generation through the use of the Internet and cell phones, Gen Y desires a vehicle that is a means of self-expression and has the latest technology, yet often succumb to economic pressures, choosing the domestic compact car rather than the import crossover SUV that they really want. Though Chevrolet brand vehicles enjoy the highest percentage of first-time owners due to the compact car offerings, as Gen Y begins earning more money, they tend to gravitate towards Japanese import brands like Toyota, Nissan and Honda.
Although 51 percent of Gen Y consumers would consider a Toyota brand vehicle for their future purchase the real story lies in the differences between Gen Y and the Baby Boomer Generation. The generational shift in preference is highlighted by AutoPacific data showing 15 percent points more Gen Y buyers would consider a BMW, 14 percent points more would consider a Nissan, as well as 13 percent points more who would consider a Honda. In fact, the top ten gains made in terms of brand consideration when comparing Gen Y to the Baby Boomer Generation are made by either German or Japanese brands.
Gen Y is currently a compact car generation, due to the strong role of economics in the purchase decision. As Gen Y continues to mature, start families and earn more income, AutoPacific predicts a shift in their future buying preference to a larger, more accommodating vehicle. Yet in order for automakers to win with this generation, bigger must mean better: the latest technology, unique style and image, advanced communications capability, and improved fuel economy (Gen Y is more open to hybrid and other alternative powertrains: 61 percent would prefer something other than a pure gasoline-powered engine).
Each year AutoPacific conducts its New Vehicle Satisfaction Survey of new vehicle acquirers. Of the 35,000 responses collected in 2008, over 3,000 were from Generation Y consumers.