Growing interest in utility vehicles among America’s 80 million-strong millennial generation – those born between the early 1980s and early 2000s – is bolstering purchase consideration for the Ford brand.
Maritz Research, a St. Louis-based marketing research firm, collects data from consumers as part of its annual New Vehicle Customer Study, asking would-be buyers and actual buyers about their new vehicle preferences and buying behaviors. The data in this study came from research conducted between 2008 and 2013.
Renewed interest in utility vehicles helping Ford sales consideration among younger buyersBeginning in 2012, Ford surpassed other manufacturers to become the No. 1 brand first considered by millennial buyersMillennial sales consideration for Ford moves from fourth place in 2008 to first place today
Marketers understand purchase consideration to be a leading indicator for future purchases in what's known in the industry as the "sales funnel." In simplest terms, consumers move from awareness of a brand to consideration to eventual purchase. Strong consideration tends to correlate highly with future purchase decisions.
Small and midsize cars remain the top two segments both considered and purchased by younger buyers, but compact and full-size SUV segments - such as Ford Escape and Ford Explorer - show the largest jumps in consideration, with increases of 1.1 percentage points and 1.7 percentage points, respectively.
While these percentage point increases appear small, in terms of potential sales volume, they represent hundreds of thousands of vehicles. For instance, in a vehicle market of 16.5 million units sold, a 1.1 percentage point increase equates to roughly 181,000 vehicles and a 1.7 percentage point gain equates to approximately 280,000 vehicles.
In the same period in which millennials began to show greater interest in SUVs, Ford overhauled its high-volume utility vehicle lineup, most notably Explorer in 2011 and Escape in 2012.
"The trend of millennials starting families comes at the same time Ford is updating or replacing nearly its entire product lineup," said Amy Marentic, Ford global car and crossover marketing manager. "These fastest-growing segments - like small utilities - coincide with Ford's product strengths."
Explorer sales were up 32 percent last month with 16,797 vehicles sold, for the best July sales since 2005. And Escape had its best July ever, with 26,558 vehicles sold - a 19 percent gain.
Millennial brand preferences changing:
In 2008, Ford ranked fourth with millennials in terms of brand consideration. By 2013, it had jumped to first. Not only did Ford become the brand first considered most often, it also showed the biggest jump in "first consideration" ranking, rising 5.5 percentage points.
Increasing purchase consideration and sales to millennials are important for Ford. The top millennial markets by population - California, New York, Texas, Florida and Pennsylvania - are those regions in which Ford's overall market share has the most capacity to grow, especially in the "super segment" of subcompacts, compacts, midsize sedans and small utility vehicles.
"Millennials are an important group of buyers in the industry today," said Chris Travell, vice president, strategic consulting for Maritz Research, "and not just in terms of sheer size. They are also helping to refine the vehicle shopping and ownership experience.
"These younger buyers are much more connected than previous car buyers," he added. "The manufacturer that develops a strategy that resonates with millennial buyers will increase the likelihood of consideration the next time that customer is in the market. In turn, this will increase the likelihood of selling a car to that customer. It appears Ford's millennial strategy is working."
