American Automotive Brands Running out of Gas with Teen Market Says New Study

GREENWICH, Conn.--Nov. 4, 2004; Teens Have Low Awareness of Most Brands and Preference Leans Towards Imports  

Ford and GM may be in the pole position as the most sought after brands by American teens, but they are facing stiff competition from Honda and Toyota according to a new study by TNS, the world's largest custom research company.

For the third consecutive year, TNS conducted a study of over 1,300 teens' preference and awareness of automotive brands. The results again indicate that domestic brands are veering off course as the force of import brands, particularly Honda and Volkswagen, continue to grow. The research reports that although Ford and GM's Chevrolet may dominate purchase decisions, these brands are perceived as safe and reliable options. However, when it comes to finding their style, other makers receive higher marks from teens, indicating that these nameplates are capturing more than their share of the young driver's market.

"These brands are merely getting their fair share of teen choices, no more or no less -- which means their appeal is dwindling and eventually this may affect market share," said Andy Turton, president of TNS Automotive, a division of TNS. "Some foreign cars have a lot of positive attributes and that may resonate with teens. However, the real superstar is Honda. Two reasons may contribute to this: First, its Civic model appeals strongly to teens and secondly, its brand is perceived as one of quality and durability as well as flexibility."

According to the survey, other brands such as Pontiac, Hummer, BMW and Mazda are also drawing more than its share of buyers, although they have much smaller net numbers. In the second tier, brands just capturing their share of the teen market include Jeep, Nissan and Buick. But brands such as Toyota, Chrysler, Dodge, GMC, Scion and Subaru are failing to connect with teens, drawing a lower percentage of teen buyers compared to the entire market.

Cultural Differences

For its 2004 study, TNS expanded its investigation of the teen market by tapping into one of the nation's fastest-growing consumer groups, Hispanic teens, to take an additional look at their automotive interests and awareness. The research, conducted with TNS Market Development, a pioneer and leader in multicultural market research, especially in measuring Hispanic attitudes, included close to 300 Hispanic teens, divided approximately in thirds by their acculturation level.

The research noted significant differences in choices between Caucasian and Hispanic teens. In particular, on overall brand awareness Hispanics are significantly less "aware" of nearly all automotive brands. Hispanics were also more likely to rate import brands more favorably, in particular Honda, Toyota and Volkswagen. Honda rated as the first choice for a new car for Hispanics followed by General Motors as second choice and Ford and Toyota for third.

"Hispanic teens tend to seek out import vehicles, possibly due to these brands' high market penetration in Mexico and Latin America, and as a result they are simply more aware of them. Hispanics' choices are also more influenced by their parents than Non-Hispanics," says Loretta Adams, president of TNS Market Development.

Surprising Choices

While adult car buyers have gravitated toward SUVs and trucks in recent years, teens are making more conservative choices when it comes to vehicle style. Most teens are looking for sedans (37%) or coupes (33%) as their first choice of car, and only eight percent are interested in buying an SUV.

Hispanic teens are more likely to turn to a four-door sedan (39%) and even less likely (5%) to select a pickup as their first vehicle. "Hispanic teens are generally more practical, since they often have family interests in mind," continued Adams.

Gender Differences

In particular, the survey also noted gender differences. Women have better impressions than men of several brands including BMW, Daewoo, Hyundai, Kia, Saturn, and Volkswagen. The brands that were more male-oriented include Ford, Chevrolet, Cadillac, Hummer, and Ferrari with the latter two statistically significant.

For their first new vehicle, women selected Volkswagen and Saturn more than men, most likely due to their "no haggle" approach, whereas men chose Hummer.

Missed Connections

In the 2004 model year, Toyota rolled out its Scion nameplate nationwide expressly targeting the teen market. However, the brand, which has relied heavily on youth-oriented events rather than mass-media marketing, is failing to capture teens' attention. Awareness among Caucasian and Hispanic teens hovers at 30 percent, far below brands such as Honda (90% of all teens), BMW (89% of all teens) and Toyota (88% of all teens). This might be expected due to the early stage in its life-cycle, but when considered in the context of teen's desires for a vehicle with stand out styling, maybe not. A TNS study conducted earlier this year among visitors to the North American International Auto Show in Detroit echoes this point, as 35 percent of visitors described the new Scion tC as "boring" and lacking "stand out."

Must-Have Accessory

When asked what accessories they absolutely needed on their next car, 68 percent of teens overwhelmingly cited a premium audio system and 56 percent said a six-CD changer. However, some gender and ethnic differences were evident. Except for a CD changer, GPS system, TV/DVD and Internet access, males tended to put more emphasis on all listed accessories that females. Hispanic teens exhibited greater demand for entertainment and electronic options (MP3 players, TV/DVD and GPS) as well as cosmetic accessories (low profile tires and lower suspensions).

About The Study

This nationwide study is the third annual update on the automotive brand preferences of the teen market. The survey, conducted online in the summer of 2004, is based on responses from 1,307 teenagers between the ages of 16 and 19 including 290 Hispanic teens and is weighted equally between boys and girls.

About TNS Market Development

TNS Market Development is a full-service market research group that provides insight into multicultural markets including deep expertise in Hispanic and Latin American cultures as well as African American and Asian American markets. With more than a quarter century of experience, the group provides an in-depth snapshot of multi-cultural American consumers: from their local customs and cultures to the products and services used.

About TNS Automotive

TNS Automotive provides marketing research and strategic counsel services to automotive manufacturers worldwide. It uses automotive-specific research methodologies to track individuals' attitudes, beliefs and behavior toward the automotive industry via an exclusive interactive panel of more than one million U.S. households.

About TNS

TNS is one of the world's leading providers of market information. The company delivers strategic market measurement, analysis, insight and advice to many of the world's largest organizations and most recognized brands. TNS' research helps its clients better understand the needs and wants of their customers, and its capabilities span market segmentation, advertising and communications, new product development, brand performance and stakeholder management. The company is also one of the leading providers of social and political polling. From its global network that spans 70 countries who together conduct research in more than 110 countries, TNS allows for local expertise and knowledge to be combined together with internationally consistent information and analysis.

TNS is listed on the London Stock Exchange (TNN) and is a trade mark of Taylor Nelson Sofres plc. Further information can be found on http://www.tns-global.com.