Gen-X New Car Buyers Display Below-Average Loyalty
18 January 2000
Gen-X New Car Buyers Display Below-Average Loyalty Polk Study Confirms Generation X Worthy of Automotive Manufacturers' AttentionDETROIT, Jan. 18 -- Generation X new car buyers display below-average brand loyalty when returning to market, a trend that could affect their current top preferences for Asian makes, according to a study released today by The Polk Company. The study found that make loyalty displayed by Generation Xers, who comprise 25 million consumers between the ages of 20 and 35, was more than five percentage points lower than the industry average. In addition, manufacturer loyalty displayed by Generation X new vehicle buyers was more than seven percentage points lower than the industry average. According to Polk data, Generation X make loyalty is nearly four percentage points lower than Baby Boomers and eight percentage points lower than the Mature Market. Results are similar with manufacturer loyalty where there is a five-percentage point difference between Generation Xers and Baby Boomers and a thirteen-percentage point difference between Generation Xers and the Mature Market. MAKE & MANUFACTURER LOYALTY RATES* Make Loyalty Manufacturer Loyalty Generation X (20-34 years old) 38.9% 48.5% Baby Boomers (35-54 years old) 42.6% 53.6% Mature Market (55 years old +) 47.1% 61.5% Total Industry 44.4% 56.0% *Source: Polk Manufacturer Loyalty Excelerator(TM) 1999 Model Year "Generation X new vehicle buyers thrive in environments where they have choices," said Karen Piurkowski, Polk's director of loyalty. "So when it comes to a market return, they're less loyal to brand names." Piurkowski said that Generation Xers are more information hungry than the other population segments, as evidenced by the higher level of importance they place on consumer magazines and automotive awards when purchasing new vehicles. "Gen Xers are also more likely to use the Internet while shopping for their new vehicles," she added. "Specifically, they are more likely to obtain financing information, vehicle pricing and incentive and rebate offerings when shopping on the Web." The Polk study found that certain makes are more popular with Generation X currently than others. The data indicates that Asian makes have the highest proportion of young buyers. Specifically, Isuzu and Mitsubishi are the top two. KIA, another Asian make, is number four. European makes follow, with Land Rover and Volkswagen capturing the third and fifth positions, respectively. GENERATION X APPEAL - TOP 5 MAKES* Percent of New-Vehicle Buyers Under Age of 35 1. Isuzu 26.83% 2. Mitsubishi 25.68% 3. Land Rover 23.90% 4. KIA 23.88% 5. Volkswagen 22.80% Source: Polk *Based on all new vehicle registrations of heads of households for the first nine months of 1999 model year. "Although import makes are currently the most popular with Generation X, with their lower levels of brand loyalty any vehicle make could be of interest for future purchases within this generation," Piurkowski said. "And since Generation X is the market of the future, low brand loyalty could prove to be a major concern to automotive manufacturers." Polk's Manufacturer Loyalty Excelerator(TM) (MLEX), the basis for these findings, provides consumer behavior insight and was created to provide household loyalty information to manufacturers at various levels. MLEX determines loyalty percentages for the entire automotive industry, provides cross-industry comparisons of loyalty behavior, and examines loyalty at various levels, e.g., from the industry level down to the vehicle-line level. The study measures loyalty throughout an entire model year to identify trends as they occur in the industry. Polk is a global company delivering multi-dimensional intelligence to the auto industry to enhance the relationships consumers have with brands. Through lifetime understanding of individuals, Polk helps clients maintain current customers, win new ones and build their brand loyalty. Based in Southfield, Mich., Polk is a privately held firm currently operating in Australia, Canada, China, France, Germany, Holland, Spain, the United Kingdom and the United States.