Survey: Gen Y auto buyers prefer high tech hybrids
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When it comes to their autos, members of Generation Y want hybrid cars stuffed with technology.
They could be the "generation that leads us away from traditional gasoline-powered vehicles," said Craig Giffi, the Deloitte automotive consultant who oversees the accounting firm's annual survey of Generation Y auto consumers.
Deloitte defines the Generation Y group as those 19 to 31 years old.
Automakers seem to be targeting this market with many of their latest offerings.
At the North American International Auto Show in Detroit last week, Toyota Motor Corp. displayed a tiny new Prius hybrid that will reach Toyota showrooms this spring with the lowest price and highest fuel economy of any hybrid that can't be plugged into a wall socket.
The Prius c will have a list price starting at less than $19,000 and a highway driving fuel economy rating of 53 miles per gallon.
Ford Motor Co. unveiled a standard hybrid and a plug-in version of its next-generation Fusion sedan that goes on sale this year. Honda Motor Co. showed a concept version of its new Accord sedan, which also will be sold as a plug-in hybrid. Even BMW got into the act, showing off a hybrid version of its latest-generation 3 Series sports sedan that will go on sale this year.
"The cost of ownership is much more important to Gen Y consumers than their parents, and the big variable there is fuel efficiency," said Erich J. Merkle, Ford's U.S. sales analyst.
According to the Deloitte survey, 59% of Generation Y respondents said they preferred an "electrified vehicle" over any other type of car or truck. They generally defined "electrified" as a hybrid gasoline-electric vehicle. Just 2% said they wanted a pure battery electric vehicle, which reflects the small number of such cars that people are purchasing. Just 37% of the respondents preferred vehicles with the traditional gasoline-only powertrain.
That preference for hybrid vehicles paints Generation Y consumers in the U.S. as "game changers," Giffi said.
"At nearly 80 million strong, they are one of the biggest automobile buying market segments and the largest consumer segment since the baby boomers," he said.
About 1 of 4 new automobiles sold this year, and 40% of vehicles sold in the next 10 years, will be purchased by Generation Y consumers, according to the consulting firm.
The auto industry is expected to sell about 13.8 million vehicles this year, including purchases by rental companies, commercial customers and government agencies. The consumer portion of the market will account for a little less than 11 million vehicles.
Generation Y buyers say they are also looking for cars rich in technology — not unlike their smartphones, the survey found.
Almost three quarters — 73% — surveyed said they liked touch-screen interfaces in their cars. Generation Y consumers also ranked smartphone applications as highly desirable in a new automobile and they want to be able to purchase additional accessories and upgrades for their automobiles on an ongoing basis in the same manner that they can add new applications to their phones and tablets.
"When it comes to cars, they want something that will work with the technology that they carry around in their pockets every day," Merkle said. "To many younger folks, cellphones are just as important as the cars that they drive."
Ford's market research indicates that Generation Y buyers are most likely to purchase a compact car such as a Ford Focus, Chevrolet Cruze or Hyundai Elantra because they like the combination of their small size and fuel economy. But older Generation Y buyers also will look at mid-size sedans and small sport utility vehicles because they might have small children and need more space.