Jerry S. Mendoza  /  AP
The Toyota Scion xB is targeted at Generation-Y car buyers.
By Roland Jones Business news editor
updated 6/22/2005 1:22:21 PM ET 2005-06-22T17:22:21

Nearly a century ago, Henry Ford famously quipped that customers could buy his new Model T car in any color, as long as it was black. But these days, with cars of every color in the rainbow on the roads and consumers of every stripe buying them, auto manufacturers are doing everything they can to peer into the minds of their customers.

Given consumers’ perception of a vehicle is crucial to its sale, manufacturers are becoming more inclined to turn to detailed studies of consumers’ likes and dislikes to determine the sorts of vehicles they ought to be making and the consumers they market them to. And with big U.S. car makers struggling with sluggish sales and crippling healthcare costs, the stance is timely.

“The big Detroit makers have found that vehicles that stand for something usually do well, but those that don’t can flounder,” said Rick Wainschel, vice president of marketing research at Kelley Blue Book, which with Harris Interactive recently released the AutoVIBES demographic study of car buyers’ behavior. “Just going out there into the market with a big broad market message can mean a company runs the risk of speaking to everyone and speaking to no one at the same time; of being all things to all people,” Wainschel added.

With data drawn from interviews with more than 25,000 vehicle shoppers who are within 12 months of purchasing or leasing a new vehicle, the AutoVIBES study aims to delve into consumers’ vehicle shopping attitudes, opinions and behaviors based on generation, ethnicity and lifestyle and provide car makers with detailed data on a variety of consumer purchase consideration factors.

Among the key findings in the report: Women are more practical shoppers of vehicles, with affordability a prominent factor, while men tend to look for good looks, style and durability.

“About a quarter of the female shoppers we polled were looking at purchasing vehicle in the next year because of a divorce, and so affordability was an essential factor for them,” Wainschel said, adding that women were more concerned with safety.

They are also more sensitive to gas price increases than men; 43 percent of female shoppers strongly consider different types of vehicles because of high prices versus 37 percent of men.

The study also shows 30 percent of U.S. adult consumers in the market to buy a vehicle in the next several months will seriously consider a more fuel efficient vehicle if gas prices rise above $3, with a decline in purchase considerations for Dodge and Chevy brands, while more consumers showed an interest in Toyota hybrids, Pontiac and Saturn.

“Our study shows the importance of gas prices on purchase decisions is going way up,” Wainschel said. “But domestic manufacturers haven’t acted on this issue as quickly as others have, and it’s hard to turn around a big tanker on a dime and harder still to reconfigure the mix of vehicles you sell, and they are paying the price that,” he said.

“The big domestic manufacturers, GM and Ford especially, have gotten into a cycle where they are manufacturing big gas-guzzling SUVs,” said Wainschel. “Those cars have been big profit drivers in the past, but have fallen into disfavor lately because of high gas prices.”

The most successful car companies have targeted products. Toyota’s Scion brand, for example — started three years ago to sell compact, hip low-cost cars with names like xA, xB and tC that appeal to the teenagers and twenty-year-olds of Generation Y — is a good example of a car company directly targeting the needs of a specific audience.

“Scion has done an excellent job of taking this type of demographic information and implementing it in meaningful way,” Wainschel said. “They are servicing the needs and desires of Gen Y shoppers. Most of them are making their first-ever vehicle purchase, and so Toyota has streamlined the purchasing process. This has to do with building brand loyalty, and maybe the idea is to eventually upgrade them to a Toyota, or a Lexus.”

Also focusing on Gen Y shoppers, according to the study, are Pontiac models like the G6 and GTO. “Gen Y had highest purchase interest for Pontiac because of the innovative features in vehicles like the G6; things like a full back sun roof and neat look,” he said “There’s a certain coolness there that appeals.”

Looks matter
At General Motors, how a car looks is seen as a vital component in a car-buyer’s decision-making process says Tom Wilkinson, director of communications at GM’s global design center.

Wilkinson says the company devotes a significant portion of its market research budget to analyzing consumers’ dislikes. These studies often take the form of research “clinics,” when the firm consults about 100 potential customers and quizzes them on their likes of dislikes regarding a new model of car.

“You pay attention to geography,” Wilkinson said. “You may do a clinic in Los Angeles because it’s a hotbed for that type of car, and then you screen the area for people that own or lease it, bring them in and show them photographs and three-dimensional representations of our cars.”

GM doesn’t only pay attention to consumers’ reactions to how a car looks and feels Wilkinson says. “We analyze all sorts of consumer trends,” he said. “We look at colors and fabrics, what people are using in industrial and home design, and general trends in everything from clothing to small electronic appliances.”

And as GM typically needs to freeze a car’s design about two years before it enters the market in order to begin production, gut feeling often plays a strong role in the decision-making process.

“Sometimes we need to make an educated guess about what consumers like because market trends can change,” Wilkinson said. “You can get into trouble sometimes and a car can look out of date, and every car maker can probably look to times when they should have paid attention to the warning sings.”

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