Saturday, August 06, 2011

Saturday, Seniors and Car Sales

Car dealers like to have radio stations do remote broadcasts on Saturdays.

My current car I bought on a Saturday.

I'm not a Senior, but here's what they are looking for:

Senior Customers Require Balancing Act's review of the purchasing behavior of more than 200,000 car buyers from 2009 and 2010 shows that seniors (people 65 years of age and over) choose vehicles from brands they grew up with. Topping the list of brands purchased by seniors in that period, by percentage of buyers, were Buick, Lincoln and Cadillac.

"It's sort of a good-news, bad-news scenario for automakers," says TrueCar head of industry analysis Jesse Toprak. "It's good news because of the high loyalty and admiration for the brands among these older consumers. It's bad news because, well, they won't be alive forever.

"So it's a balancing act, really. I talk to these guys and it's a challenge they live. It's something they think about every morning when they get up: how do we not alienate our loyalists while trying to bring younger buyers into the brand?"

If the relative percentages of older buyers among brands were low, it wouldn't be such a nightmare for marketers. But the numbers say it all: 57.5% of Buick owners in 2009 and 2010 were over 65, per TrueCar stats. For Lincoln, it's 47.7%. Cadillac sold 44% of its cars during that time to seniors. After that comes Chrysler at 36.1%. General Motors sees a more youthful balance with GMC, at 32.4% over-65 buyers, and Chevrolet, which is just above Porsche, at 31.2%. After Porsche (29.5%) come Lexus, Jaguar and Hyundai, a quarter of whose buyers are 65 or older.

Toprak says the key to appealing to all consumers is to have (and market) tech-forward cool vehicles that younger buyers like, and trim levels that older consumers may also respond to. "It all comes down to the product. In spite of image, you can still sell to a younger and hipper audience with the right vehicle." Case in point from some years back before Buick had begun revamping its lineup with vehicles like the Enclave: the Buick Rendezvous, introduced in 2001 and built on the same platform as the (much mocked) Pontiac Aztek had waiting lists in California, notes Toprak, who said those buyers were 40-somethings. Same drill for the Enclave.

Another pattern emerges with a quick glance at the specific models with the highest percentage of older buyers: about 90% of buyers of the Lincoln Town Car are 65 or over. Next is the Buick Lucerne full-size luxury sedan, 86.6% of whose buyers are seniors. After that comes the big Cadillac DTS, the CTS Wagon, STS large car, the Hyundai Azera full-size sedan, and Chevy's largest car, the Impala. The list also includes the Toyota Avalon full-sized sedan. The only mid-sized cars on the list are Buick LaCrosse and Lincoln MKZ, 58.9% and 53.8% of whose buyers were 65 or older in the past two years. For the most part, big cars mean older buyers.

"That's the general issue; large cars don't appeal to younger people; it's really a category problem," says Toprak, who notes that luxury brands like BMW and Mercedes-Benz have smaller vehicles in market or in the pipeline to appeal to younger buyers: BMW launched the 1-Series in 2004 and Mercedes-Benz plans a small car for the U.S., perhaps based on its Europe-market A-Class platform. These are "leapfrog" cars that a 20-something can buy and then move up from as they get older and hopefully more affluent, notes Toprak.

"It's not just image -- it's practicality, he says. "If they offer vehicles with very attractive lease payments that younger buyers with better cash flow can get into, you get a much higher chance of succeeding."

(Source: Marketing Daily, 07/29/11)

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