A new survey from Deloitte predicts a rejuvenation of the automotive industry, thanks to the purchasing power of Generation Y.
By 2012, Gen Y will account for approximately 40 percent of the car-buying population and represent a new breed of confident consumers who are independent, tech-savvy, engaged, demanding and, according to Deloitte's survey, just the group to help rejuvenate the automotive industry.
The survey, Gaining Speed: Gen Y in the Driver's Seat,has uncovered a series of interesting shifts in how this generation views one of its most exciting shopping experiences.
Conducted in collaboration with The Eli Broad Graduate School of Management at Michigan State University, the survey indicates that Gen Y consumers have an increasingly positive view of the industry.
"Our analysis of the survey findings points to technology as a key generational differentiator," said Craig Giffi, vice chairman and automotive practice leader, Deloitte LLP. "For baby boomers, technology is largely utilitarian and defined by safety features, whereas Gen Y views technology as a more personal feature. They see their cars as personal technology cocoons, and expect so-called 'cockpit technology,' where they can continue to run their lives uninterrupted, from messaging to music to the latest smart phone apps, 24/7."
The perception of the automotive industry is continuously improving among Gen Y. More than 82 percent of Gen Y consumers say they are excited to shop for a vehicle, which is especially important as enthusiasm has subsided among Gen X and baby boomer respondents with only 71.2 percent and 66.3 percent expressing the same sentiment.
As reported in last year's survey, Gen Y is particularly loyal when it comes to automobile brands with 42 percent of respondents last year and 48 percent this year saying they expect to be driving the same vehicle brand in five years.
Although Gen Y consumers are loyal, they are fairly unforgiving with 52.4 percent of respondents agreeing with the survey statement, "A bad experience with a salesperson would cause me never to consider that brand of car again."
"One area we found very interesting is Michigan State University's analysis that the actual car shopping experience is three times more important to Gen Y than vehicle design," said Joe Vitale, who leads Deloitte's north central region automotive practice and Generation Y research program.
The research done by Gen Y shoppers is broader and deeper, too, with these buyers significantly more likely than older generations to use friends, websites and blogs to gather purchase information. According to the Deloitte survey, nearly 67 percent of Gen Y respondents look for advice or information on blogs or social media forums before purchasing a vehicle, up dramatically from 25 percent in 2009.
"Authentic, direct and personal engagements with Gen Y consumers are even more important than advertising campaigns for reaching Gen Y," said Giffi. "According to the survey, Gen Y consumers actively share opinions and exert their influence far more than older generations, using the virtual world of social media to reach a never-ending audience."
"Automotive companies that can gain Gen Y's trust by providing superior vehicle safety while capitalizing on their desire for the latest technology are more likely to capture the purchasing power of this important demographic," concluded Vitale.
