How Korean Brands Have Captured Share Among Younger Buyers
The Big 3 brands are making greater in-roads with today’s younger buyers, thanks largely to their fresh crop of smaller, fuel-friendly and more affordable cars of recent years.
Yet still, they are not the ones benefitting the most from the bevy of Japanese car-brand defectors in the age 25-to-34 crowd, according to Edmunds.com.
On Wednesday, Edmunds pinpointed some key metrics from a R.L. Polk & Co. data set of 2012 and 2008 new-vehicle retail registrations by age (of buyer).
What Edmunds discovered is the South Korean brands are actually the ones “taking big hacks” into the Japanese brands’ share of new cars bought by 25- to 34-year-olds.
And they’re doing it through strong product and financing, Edmunds says.
“U.S. automakers have burst onto the scene in recent years with small, fuel-efficient and affordable cars that really appeal to a young set of buyers,” said Jessica Caldwell, senior analyst with Edmunds.
“But while Detroit might be chiseling away at the Japanese grip on Gen X and Gen Y, South Korean brands are taking big hacks. Not only are the Koreans making better cars for young people, but they’ve also worked to make credit available to young buyers who still don’t have solid credit history.”
And they’ve more than doubled their market share of this crowd. In 2008, less than 5 percent of new-vehicles bought by age 25-34 consumers were from Korean brands, according to the Polk registration data cited in Edmunds analysis.
That number jumped to 10.1 percent in 2012.
Big 3 brands represented 36.9 percent of these shoppers’ new-car purchases last year, up from 35.4 percent in 2008.
Meanwhile, Japanese brands saw their share fall from 50.6 percent to 42.9 percent during this time frame.
As for European brands, they have increased their share of this age group from 8.8 percent to 9.8 percent. What’s interesting about these brandS is that while their share increases (in terms of percentage points) have fairly consistent across all age groups, the highest gains have been among 65- to 74-year-olds and buyers 75 or older.
Specifically, Europeans commanded an 8.3-percent share of the 65-74 crowd in 2012 (up from 6.6 percent) and a 6.5-percent share for the 75-and-up group (up from 4.8 percent).
“Like the South Koreans, European carmakers have delivered consistent growth among all age groups since 2008, with the biggest successes among older car buyers, thanks to Baby Boomers choosing European luxury cars post-retirement,” Edmunds noted.
Joe Overby can be reached at joverby@autoremarketing.com. Continue the conversation with Auto Remarketing on both LinkedIn and Twitter.