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Old 07-29-2013, 12:39 PM   #1
zland
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Default Is GM or this study right about the buying trends of future car buyers?

It appears GM is banking on the C7 appealing to a younger demographic. The study below suggests consumers tend to be getting older & the consumption of cars peaked in 2004. It will be interesting to see who is right.

http://finance.yahoo.com/news/americ...103545790.html

If Americans Are Driving Less, Who Buys All Those Cars?

One reason car sales have risen so far might be that more Americans drive that in the past. A recent study says that is not true, that driving by Americans peaked in 2004. So who buys all of those new cars? Perhaps people who are replacing old cars, or those who want to take advantage of ridiculously good auto loan deals.

U.S. PIRG Education Fund and Frontier Group issued a report that looked at several sets of fact to draw its conclusions about driving patterns:
Americans drove more miles nearly every year between the end of World War II and 2004. By the end of this period of rapid increases in per-capita driving -- which we call the “Driving Boom” -- the average American was driving 85 percent more miles each year than in 1970.
Americans drive no more miles in total today than we did in 2004 and no more per person than we did in 1996.
On the other hand, Americans took nearly 10 percent more trips via public transportation in 2011 than we did in 2005. The nation also saw increases in commuting by bike and on foot.

Millennials are blamed or credited with nearly every trend change in America recently, and driving is no different:

The unique combination of conditions that fueled the Driving Boom -- from cheap gas prices to the rapid expansion of the workforce during the Baby Boom generation -- no longer exists. Meanwhile, a new generation -- the Millennials -- is demanding a new American Dream less dependent on driving.

This new assessment is not unique. The Transportation Research Institute at The University of Michigan (UMTRI ) made a related observation in research released recently. In a study, UMTRI research professor Michael Sivak found:

in 2011, the peak probability of buying a new vehicle per driver was among those between 55 and 64 years of age -- a shift from four years earlier that peaked with the 35-to-44-year-old age group.

Car research group R.L. Polk issued numbers that may be worse for the car industry, at least as it moves into the next decade. Many people would expect luxury car buyers to be older, and that is the case. The media age of Cadillac buyers was 57 in 2011, and for Lincoln buyers the figure was 60 years old. Even luxury cars that appeared aimed at younger buyers have relatively old median ages among those who purchase them. For example, the median age of BMW buyers was 50 in 2011, according to Polk. Among less expensive cars, the patterns were not much different. The media age of Ford Motor Co. (NYSE:F) buyers was 52, and among Toyota Motor Corp. (TM) buyers it was 51. Across virtually all models, Polk researchers found median age rose from in 2007.

Car manufacturers ought to shudder, based on the data. The current car sales boom has taken the auto sales rate in the United States above 15 million this year, by most estimates, and some put that number at 15.5 million. Although the figure is not quite back to prerecession levels, at the current rate of growth, it could be next year. However, the demographics of car buyer age would argue that sales will taper off as Americans over 55 move toward the end of their driving lives. Even if that will not happen for several years, the car manufacturing business is likely in for a shock.

Old people are the car buyers of today, and they probably will be more and more in the future. Therefore, models aimed at younger drivers appear to be nothing more than a waste of auto manufacturer time and money.
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Old 07-29-2013, 12:55 PM   #2
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I wonder if all those folks that have retired since the peak in 2004, are driving less since they don't have to drive to work everyday. I know that I drive less miles now vs then, yet I still buy new cars.

"If Americans Are Driving Less, Who Buys All Those Cars?"

Just because we are getting old, doesn't mean we stop spending our money for new cars, etc. We like new stuff just as much as those that are younger, and we probably have more money to spend on new cars, since our kids are long gone out on their own.

Last edited by JoesC5; 07-29-2013 at 12:57 PM.
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Old 07-29-2013, 12:57 PM   #3
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This shouldn't be shocking to anyone considering baby boomers are now in that age group (53-70 years old).

There has been a steady decline of the birth rate in the US so there are fewer "young" people to purchase goods.
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Old 07-29-2013, 01:34 PM   #4
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Car manufacturers ought to shudder, based on the data.
Yes they should, and especially the VLE and team at GM who sold the beancounters on market demand trends supporting 30,000-type production volumes. That said, this has always been the case at GM: the fixed costs are so high that no small-volume vehicle program can ever clear the executive level. So the VL Team has to make a case for the high unit production hurdle. On the C6, the justification was that the car would get the import drivers, and particularly europeans, out of their Audis and Porsches and into Vettes. That of course did not happen. This time around, it's the claim that 30-somethings will flock to the car. This is even less likely to happen, than Porsche drivers switching.

So the C7 will be produced in significant quantities, and when demand softens in year 2, the discounts will begin anew. Same old story, with the same buyer demographic. That's why I always say that the C7's biggest competitor is the C6.
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Old 07-29-2013, 01:49 PM   #5
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There is NO QUESTION that people are buying fewer cars after the "great recession".

There are several reasons.

One is that cars last longer and are more reliable. There's less incentive to replace it every 3 years when the warranty runs out.

The other is cost. Cars are expensive to own and gas is higher and higher each year. We've conditioned people to believe it's going go up a 50 cents a year -- and except it.

The other reason is that younger people do not see the need to drive. Insurance is outrageous for this group. They would rather text each other than meet at the mall.


None of this will impact Vette sales. But, the future for the auto industry will be a slow decline in favor or cheaper alternatives such as telecommunting.
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Old 07-29-2013, 01:53 PM   #6
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Make me wonder why GM designed the C7 for the youngsters(since there are fewer of them with less money) than designing the C7 for the oldsters(since there are more of them with more money, that have been buying the Corvette all along).
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Old 07-29-2013, 01:57 PM   #7
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Make me wonder why GM designed the C7 for the youngsters(since there are fewer of them with less money) than designing the C7 for the oldsters(since there are more of them with more money, that have been buying the Corvette all along).
That's what Cadillac is for.

The market for 2 seat sports cars have been shrinking for years far faster than the general demographic trends. People are moving to sports sedans.

Last edited by Sin City; 07-29-2013 at 02:03 PM.
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Old 07-29-2013, 01:58 PM   #8
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This shouldn't be shocking to anyone considering baby boomers are now in that age group (53-70 years old).

There has been a steady decline of the birth rate in the US so there are fewer "young" people to purchase goods.
This is exactly right. Its just demographics and actuarial tables - not really a change in desires or habits so much as a change in population levels and economic standing.

It won't just be cars, it will be everything. The baby boom was much more than a boom in babies - it was a boom in everything those babies would consume, and now with that boom ending the levels of consumption will drift back to whatever the normal baseline is.

Of course since basically our entire global economy has been built on the foolish assumption that booms last forever and infinite growth is possible there are going to be a ton of companies (shrinking sales), governments (shrinking tax base), regions (migration as industries change - see any old new england mill village for a historic example), etc that are going to be in for a very rude awakening when the rug is pulled out from under them.

Its not all doom and gloom though, just as we have in the past we'll adapt, we'll reorganize, we'll build different industries to replace the old ones, prices and consumption will find an equilibrium again, new regions benefit from the people who left old ones, etc. The world goes on, society continues the march of progress, and then in another generation or two it will all happen again.
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Old 07-29-2013, 02:01 PM   #9
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I don't think they targeted one group or the other. They are trying to add fresh design elements to creat buzz, and so far, that is working for the most part. I would add that in here, there seem to be more oldsters excited about the new design than youngsters, or at least it's about the same. But there is risk when you make readical changes, and this is what happened on the rear panel. In the end - it's a matter of personal taste, and it really comes down to the rear end. I think 95% of people agree that the car looks stunning all the way to the back wheel. It's aft of that that the problem lies...
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Old 07-29-2013, 02:06 PM   #10
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Make me wonder why GM designed the C7 for the youngsters(since there are fewer of them with less money) than designing the C7 for the oldsters(since there are more of them with more money, that have been buying the Corvette all along).
I think the thought is that the "younger" buyer that may buy the C7 will also be around to buy a C8, C9 etc. The older buyer can afford a C7 much easier, but they may not be around to purchase the C8 or C9. It is the same issue that Cadillac has dealt with over the last 5 years or so. They were seen as the "old" guys car and they had to shift their focus to a younger group with out destroying their loyal buyer base.
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Old 07-29-2013, 02:06 PM   #11
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I don't think they targeted one group or the other. They are trying to add fresh design elements to creat buzz, and so far, that is working for the most part. I would add that in here, there seem to be more oldsters excited about the new design than youngsters, or at least it's about the same. But there is risk when you make readical changes, and this is what happened on the rear panel. In the end - it's a matter of personal taste, and it really comes down to the rear end. I think 95% of people agree that the car looks stunning all the way to the back wheel. It's aft of that that the problem lies...
When people say "younger", they aren't referring going from an average age of 60 to 25.

What they means is going to 40 to 55 -- the same primary target as Porsche.

All they have to do is drop the age of the average buyer to 5 to 10 years and the size market base will almost double for this car.

You need to pick up young professionals instead of more empty nesters.
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Old 07-29-2013, 02:07 PM   #12
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So THIS is why car colors are so damn boring these days. Because of all the boring old fogies who keep buying them!
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Old 07-29-2013, 02:11 PM   #13
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So THIS is why car colors are so damn boring these days. Because of all the boring old fogies who keep buying them!
Funny but you do have a point. If you go with bright lime green like Lambo, you do appeal to a younger age immediately. Same for frosted paint finishes (which I generally don't like).

I'm sure thought that Chevy has a ton of research on why they chose these colors. Their target is to go after some Porsche buyers, which are rarely in bizarre colors. I would bet 90% of all Porsche are white, black, and some kind of silver.
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Old 07-29-2013, 02:14 PM   #14
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All they have to do is drop the age of the average buyer to 5 to 10 years and the size market base will almost double for this car. You need to pick up young professionals instead of more empty nesters.
It is really a push on all fronts: they need to get to the younger folks (hot button - trend appeal), the value folks (hot button - performance), and the premium sportscar folks ( hot button - perceived quality). And I think the car delivers in these areas and does it better than any previous Corvette. The development team nailed it pretty much. The issue to me is the marketing. The car is simply not getting shopped to enough buyers IMO and is not appearing at enough venues. We've had the discussion before and good point was made about timing this. So may be this is coming...
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Old 07-29-2013, 02:15 PM   #15
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Funny but you do have a point. If you go with bright lime green like Lambo, you do appeal to a younger age immediately. Same for frosted paint finishes (which I generally don't like).

I'm sure thought that Chevy has a ton of research on why they chose these colors. Their target is to go after some Porsche buyers, which are rarely in bizarre colors. I would bet 95% of all Porsche are white, black, and some kind of silver.
Yeah, I was only half joking. You look at luxury cars, which are probably the biggest victims of boring-color syndrome (even though there are some beautiful metallics on some luxury cars), and you can understand why they suffer. They have the oldest buyers.

Then you look at cars that are cheaper and clearly targeted towards a younger crowd.

Click the image to open in full size.

... It sucks. Why do old people not like bright colors? Do they feel self-conscious for some reason? Wouldn't it be easier for their failing eyes to find in the parking lot?
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Old 07-29-2013, 02:18 PM   #16
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That's what Cadillac is for.

The market for 2 seat sports cars have been shrinking for years far faster than the general demographic trends. People are moving to sports sedans.
Dumped Cadillac because it was a POS. Now a Mercedes sits in my garage next to my three Corvettes(one being a C6 Z06).

market for two seat sports cars might be shrinking, but, it's still the GHOF's(like me) that are buying the Corvette. Normally, when I see a youngster in a Corvette, it's an older one(10-15 years) that he picked up used for half the cost of a new one.

Since GM only sells new Corvettes, I would think they would be interested in designing them for the people that normally buy new Corvettes. From my observations, it's the youngsters that are interested in the sports sedans, as it tends to be a daily driver, thus more functional than a two seater. Most of us old farts have a sedan/pickup/SUV(or all three) parked next to that new Corvette that we only drive on weekends, etc.
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Old 07-29-2013, 02:21 PM   #17
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Yeah, I was only half joking. You look at luxury cars, which are probably the biggest victims of boring-color syndrome (even though there are some beautiful metallics on some luxury cars), and you can understand why they suffer. They have the oldest buyers.

Then you look at cars that are cheaper and clearly targeted towards a younger crowd.

Click the image to open in full size.

... It sucks. Why do old people not like bright colors? Do they feel self-conscious for some reason? Wouldn't it be easier for their failing eyes to find in the parking lot?
I think it's more like we have outgrown that "hey look at me in my fancy new car with it's bright color" need to be recognized.
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Old 07-29-2013, 02:24 PM   #18
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So THIS is why car colors are so damn boring these days. Because of all the boring old fogies who keep buying them!
One thing I've noticed in the past 71 years. Every time an old fart dies, he is replaced. There will never be a shortage of us.
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Old 07-29-2013, 02:24 PM   #19
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It is really a push on all fronts: they need to get to the younger folks (hot button - trend appeal), the value folks (hot button - performance), and the premium sportscar folks ( hot button - perceived quality). And I think the car delivers in these areas and does it better than any previous Corvette. The development team nailed it pretty much. The issue to me is the marketing. The car is simply not getting shopped to enough buyers IMO and is not appearing at enough venues. We've had the discussion before and good point was made about timing this. So may be this is coming...
I would agree with this. But, you cannot be everything to all people. I think that's why there is such a push back on the C7 from previous owners.

It's outside their comfort zone.
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Old 07-29-2013, 02:34 PM   #20
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I think it's more like we have outgrown that "hey look at me in my fancy new car with it's bright color" need to be recognized.
Do you not want your car to look good? I mean if you just actually enjoy duller colors more than brighter ones, then sure, I guess your logic holds up. But bright colors are not [necessarily] for attention. Some of us like bright colors on our cars just because they put a smile on our face every time we see them. And because it's borderline depressing being on the freeway in a traffic jam surrounded by a sea of various shades of gray and brown.

Last edited by RocketGuy3; 07-29-2013 at 02:36 PM.
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