Gen Y Consumers Having Significant Impact on Auto Market

WESTLAKE VILLAGE, Calif., Oct. 3, 2002 -- The increasing influence of Generation Y is altering the dynamics of the U.S. light-vehicle market, according to the J.D. Power and Associates 2002 Generation Y Automotive Consumer Study(SM) released today.

Representing the largest American generation since the Baby Boomers, Gen Y consumers -- those born between 1977 and 1994 -- account for 28 percent of the American population, and, as they mature, are beginning to have a significant impact on U.S. new-vehicle sales.

The study examines the demographic landscape of Gen Y, including buying habits, family structure, income levels and vehicle purchasing preferences.

Today, many Gen Y consumers are purchasing their first new vehicle. This year almost 10 percent of households headed by a Gen Y consumer will buy new vehicles, accounting for roughly 700,000 new vehicle purchases -- about 60 percent of which are the consumer's first new vehicle purchase.

"Our research indicates that Gen Y consumers are style-conscious, less loyal to domestic brands, and seek vehicles with 'fun to drive' characteristics," said Walter McManus, executive director of Global Forecasting at J.D. Power and Associates. "Gen Y consumers want vehicles that stand out and reflect their individuality."

Gen Y consumers are less interested in larger vehicles and more interested in lower transaction prices and manual transmissions than consumers from other generations.

The study also shows that within the auto industry, perceptions about Gen Y consumers do not always match reality. For example, Gen Y consumers are less interested than older generations in environmentally friendly vehicles, even though they are more interested in fuel economy and operating costs.

The study predicts that Gen Y households will out-number Gen X households within 10 years. Today, Gen Y members are the head of only 6 percent of the total households in the United States. That is expected to rapidly increase to 22 percent by 2010, while households headed by Gen X will remain at 17 percent of the total over the same period.

"The impressions made on these new households by their first vehicles will stick with them for a lifetime," McManus said. "Automakers have already begun to factor Gen Y consumers into their strategic planning. Toyota with the Scion brand and Honda with the Element are two examples of automakers designing their products for the youngest generation of American vehicle buyers."

The following are the new vehicle brands and models most attractive to Gen Y consumers:

Top 5 Vehicle Brands Top 5 Vehicle Models 1. Kia 1. Saturn SC 2. Volkswagen 2. Hyundai Tiburon 3. Saturn 3. Dodge Stratus 4. Hyundai 4. Honda Prelude 5. Pontiac 5. Subaru Impreza