NEW YORK, March 27, 2013 /PRNewswire/ --
-- Post-recession consumer and demographic shifts are reshaping the U.S. auto industry, as much if not more than the recent economic crisis -- Google and Facebook provide optimistic vision of "automobility" and mobile platforms -- Ford announces Personalized Fuel Efficiency App Challenge to bring new ways for consumers to learn more and further improve real-world fuel economy
While the great recession has fundamentally reshaped the automotive industry over the past few years, the real game changer may come from a new post-recession consumer mindset, demographic shifts and how automakers respond.
"Just as everyone is breathing a huge sigh of relief about getting back to something resembling normal sales levels, the real news is that the great recession has dealt a fundamental change to the consumer's mindset," said Jim Farley, executive vice president of Global Marketing, Sales and Service and Lincoln. "The question of whether consumers are returning to the market is settled. Now the question is, 'What do they want and expect from us, and are we really ready to respond to what has just taken place?'"
Delivering the keynote address at the 2013 New York International Auto Show, Farley said the recession has profoundly influenced how consumers weigh purchase decisions and what they value in automobiles. He highlighted several key post-recession trends that will drive industry change - shifting expectations around luxury, the rise of women and Hispanics, a renewed focus on fuel economy, and the rapid proliferation of mobile platforms.
New luxury expectationsLuxury is no longer defined by price, size and exclusivity. "Now, people are breaking the association of luxury with a high price tag," Farley said. "They are looking for luxury-level quality, performance and features in smaller sizes and at more reasonable price levels."
He noted that a recent Luxury Institute survey found 60 percent of respondents expect a fully equipped luxury vehicle to cost less than $60,000 - significantly less than the former $100,000 price tag standard on many luxury models.
Another luxury trend: Small utilities are outpacing all other luxury vehicle segments for growth, with nearly a 60 percent jump in 2012 and a more than 200 percent increase in the past four years.
Women, Hispanics transforming the marketWhile baby boomers will continue to wield the greatest influence on the market for years to come, Farley pointed to shifts among women, Hispanics and millennials that are reshaping the entire consumer market.
Perhaps the most powerful trend is the rising consumer power of women globally. "More than 1 billion women will enter the middle class globally by 2020, and many will be buying vehicles for the first time," Farley said.
Rapid urbanization is drawing women to cities all over the world, where they are trading agricultural work for careers in business and other professions. Women buyers are outpacing men for the first time ever in the United States.
Meanwhile, Hispanic households are becoming increasingly affluent with a 126 percent increase in U.S. Hispanic households making more than $100,000 a year. Hispanic households have a total net worth of more than $500 billion.
"As Hispanics buy luxury vehicles at a faster rate than the overall market, our brands must become more compelling, interesting and relevant than ever," Farley said. "Millennials are also a significant opportunity, as they will start entering the family stage in record numbers during the next several years."