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New Auto Research Looks at Generational Differences


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New Auto Research Looks at Generational Differences

By Steve Finlay

WardsAuto.com, Jul 13, 2010 9:05 AM

Auto-industry forecasters rationally make market predictions, but consumers emotionally buy cars.

“That’s why market forecasts can fail us,” says John Wolkonowicz, IHS Global Insight’s associate director-North American Automotive Research.

To stem such failures, he touts a research approach called generational dynamics. “It lets us climb into the hearts of auto buyers,” he says. “It’s built on the premise that you are what you were.”

The thinking goes like this: “Your core values are formed early from life experiences and remain constant for a lifetime, so we can use them as a predictive tool,” Wolkonowicz says at a conference hosted by IHS and the National Automobile Dealers Assn.

Granted, a new form of humanity does not populate Earth with the arrival of each generation. But consumer behavior is not fixed and can vary by generation.

“Each generation has different life experiences and, therefore, different core values and different behaviors in the marketplace,” Wolkonowicz says.

“The Depression Generation” – people who lived through the hard times of the 1930s – will be completely out of the auto market by 2015, he says.

By then, Generation Z will have undergone a rite of passage from adolescent to auto consumer. “They are becoming old enough just now for us to study,” Wolkonowicz says.

Going down the list of generations, his take and comments on each are as follows:

The Baby Boomers, born between 1946 and 1964, were indulged by their Depression Generation parents, who wanted a better life for their kids. Consequently, Boomers grew up “selfish and competitive.” Despite their advancing age, they remain a force in the auto market, responsible for up to 45% of new-car purchases. “Boomers will be important in the marketplace for years to come.”

Born between 1965 and 1977, Generation X members were “the latch-key kids.” Many had divorced parents. They grew up in the 1970s when the U.S. saw some relatively turbulent times, from the Watergate scandal to oil embargoes. “It’s a generation that wants to fit in rather than stand out. They are conservative, practical and skeptical. It’s a don’t-look-at-me generation.”

Generation Y, born between 1978 and 1984, has garnered much attention lately, “as they should because they are 77 million strong.” These are the Boomers’ “pampered and protected kids.” Unlike previous generations, their schooling focused a lot on self-esteem and computer literacy. Their respect for their parents narrows the generation gap. Because of the economy, some Gen Yers struggle in the job market. That affects the level of their auto consumerism.

To illustrate generational differences, Wolkonowicz describes each group in relation to an automotive current event: Toyota’s sudden-acceleration recalls.

“Baby Boomers are Toyota loyalists who want this thing to go away,” he says. “One thing about Boomers is that they need to be right, and they want to be considered right in buying a Toyota. That is awfully good news for Toyota.”

Boomers who do defect from Toyota likely will shop for another Japanese car brand, he says.

Citing their skepticism, Gen Xers who own Toyotas “are the ones most likely to feel cheated” by the recall issue. In buying their next cars, “some will feel it is important to buy American, most likely Ford.”

Generation Y sees Toyota as their parents’ brand, Wolkonowicz says. “Each generation likes to distinguish itself by the things they like opposed to the things their parents like.”

But because of Generation Y’s practical streak, some of them may end buying Toyotas if the auto maker’s incentives become irresistible, he says. Otherwise, “Honda and Ford can pick up some Gen Y customers.”

Dealers can use generational dynamics to better understand their customers and adapt selling styles that appeal to different age groups, he says.

For example, dealers should be ready to use the sales step of overcoming objections when dealing with Gen X skeptics. Meanwhile, Gen Yers tend to loathe high-pressure selling more than their predecessors.

“Dealers should climb into the hearts and minds of the customers that walk through their doors,” Wolonowicz says.

link:

http://wardsauto.com/home/new_auto_research_100713/

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These people have no idea what they are doing when it comes to generations. A generation is 20 years, give or take. They claim the Boomers were 18 years, then Gen X only 12 years, then Gen Y 6 years? Gen X lasts until the mid 1980's, then Gen Y comes after. There is no "Gen Z" who is just getting into buying cars, they are my children, just riding bicycles. I am firmly in the middle of Gen X, not near the end. More media idiocy.

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These people have no idea what they are doing when it comes to generations. A generation is 20 years, give or take. They claim the Boomers were 18 years, then Gen X only 12 years, then Gen Y 6 years? Gen X lasts until the mid 1980's, then Gen Y comes after. There is no "Gen Z" who is just getting into buying cars, they are my children, just riding bicycles. I am firmly in the middle of Gen X, not near the end. More media idiocy.

The 20 year definition doesn't apply in this context..46-64 has long been considered the Baby Boomer years, while I've seen elsewhere '65-75 and '65-80 for my generation..

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The 20 year definition doesn't apply in this context..46-64 has long been considered the Baby Boomer years, while I've seen elsewhere '65-75 and '65-80 for my generation..

Exactly... and even previous generations boundaries are always in dispute... such as the 'Lost Generation', 'Greatest Generation' and 'Silent Generation' having lots of overlap depending on your source.

Generations are defined by the events and how they changed the values of the growing generation, so they are not necessarily on 20 year units.

Personally, I feel the Baby Boomers are right on with the '46-'64 boundary... and Gen X at '65-'79... the Gen Xers are a notoriously small generation... which demonstrates numerically that in general, they are not the children of Baby Boomers... Gen Y is. Gen Y's begining of '80 also seems spot on to me, as they would have spent the bulk of their mature life with the Internet... unlike Gen X'ers like me who remember a distinct world with Internet and one without.

Where Gen Y ends is still too early to say... but '94/'95 is not off, as Gen Z will pick up and remember a world totally different, with the new millennium and 9/11 seared onto the public memory. Some Gen Z'ers could be VERY close to buying cars... I started reading C&D when I was twelve and was quite the Car aficionado.

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Is that stat correct :: 77 million born in a 6-yr span ??? Without checking that, it sounds rather unlikely.

If 'they're' going to use a 6-yr span of time, I cannot see still calling it a "Generation" anymore; too far removed. I also question the imposed 'importance of events' in categorizing people born in such small periods as so significant.

People attribute far too great an importance on the internet in general.

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I have Gen X friends, they are definately different from me and my other Gen Y friends. There is a cultural divide right at 1980.

Ya, and I see differences in my younger X friends (those born around '77-79) vs myself and my older X friends ('65-72 or so)...having grown up w/ 2 Baby Boomer siblings and with many of my friends being 2-5 years older than myself, I've found many of my cultural references (music, cars, etc) skewed towards the Boomer era than that of my own generation..

As far as the pre-Internet/post-Internet, I distinctly remember the era before I first got online (pre 1986), then my text-internet eras (late '80s w/ CompuServe and BBSes, then UNIX telnet/archie/ftp networking in college from '88 on) then the WWW era starting in '93, then broadband (since '02) and now the internet on my phone...my grad school research and my career has been totally internet-centric. I couldn't imagine living or working without connectivity.

My car enthusiasm no doubt is rooted in having a lot of Matchbox and Hot Wheels cars as a kid, having parents and siblings that are car fans, and getting my Car & Driver and Road & Track subscriptions at age 7.

Edited by Cubical-aka-Moltar
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The 20 year definition doesn't apply in this context..46-64 has long been considered the Baby Boomer years, while I've seen elsewhere '65-75 and '65-80 for my generation..

You're an Xer, which goes to ~80. I'm a Y, and that's early 80s-mid 90s. These guys really did F up the generations IMO.

I have Gen X friends, they are definately different from me and my other Gen Y friends. There is a cultural divide right at 1980.

Pretty much. The 80s were a VERY distinct decade, and a lot of their unique characteristics fit almost perfectly within those 10 years.

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