Heading West and South

Auto makers looking to build long-term product loyalty in the U.S. by lowering the age of their customer base will have to look more to the South and West. Projections by the U.S. Census Bureau show the demographic age 5-23 group often called Generation Y will move south, mainly to Texas and Florida, and west to the Rockies and beyond. That follows closely overall population growth patterns projected

Auto makers looking to build long-term product loyalty in the U.S. by lowering the age of their customer base will have to look more to the South and West.

Projections by the U.S. Census Bureau show the demographic age 5-23 group — often called Generation Y — will move south, mainly to Texas and Florida, and west to the Rockies and beyond.

That follows closely overall population growth patterns projected by the Census Bureau, but this group of consumers is not expected to grow as fast as the rest of the population over the next two decades.

Gen Y, and whatever it's called in the future — the Z's, “double A's,” New Millennium Kids — is a demographic some auto makers are homing in on to keep new blood flowing into their dealerships.

A prime example: Toyota Motor Corp.'s new Scion brand aimed squarely at the youth market.

Between 2000 and 2025, the Census Bureau predicts the 5-24 crowd will grow 14.6 million, or 13.6%, while the rest of the population will surge 30.4%. So if getting a foothold with the younger crowd is paramount, now may be the time to start doing so as that group matures and the market for bigger and upscale vehicles eventually gets larger than it is today.

Pacific states — California, Oregon, Washington, Hawaii and Alaska, but mostly California — will see the most growth in younger residents.

Through 2025, the 5-24 age group there will increase by nearly half — up 56% in California alone — followed by near 30% gains in the Mountain states and West South Central, where three-fourths of the population resides in Texas. By 2025, about one in five Gen Y'ers will live in California alone.

California often is seen as a trend setter and Asian companies such as Toyota and Honda Motor Co. Ltd., have established strong positions there, Detroit's Big Three have struggled more on the West Coast than elsewhere in the U.S. Most of the Asian auto makers have located their headquarters and North American design centers in California.

The data show three regions in the Central U.S., including the East North Central, or Great Lakes states — home base for the Big Three and historical core of the auto industry — will see a decline in numbers for the youth group.

Texas, the second-most populous state behind California, will see a 27.5% increase in the 5-24 age group. Often referred to as pickup truck country, Texas is a market held dear by Chevrolet, Ford and Dodge.

Florida, already a major center for seniors, will continue to grow as a Mecca for retirees. It is predicted to surpass New York by 2025 to become the third-most populous state. Florida also will add another 857,000 residents in the 5-24 group by 2025.

A higher percentage of that group likely will stay put in their senior years because of the state's popularity as a spot to retire. On a volume basis, its growth is behind only California and Texas.

Haig Stoddard is Ward's Communications' manager of industry analysis.

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