Luxury consumers don’t typically purchase a non-luxury vehicle. That seemingly self-evident fact is a truism in the auto industry. Put another way, people with money generally show it with their vehicle purchases. The well-to-do are just not likely to buy a Ford, Chevrolet, Toyota or Honda. But now a new study from Acxiom Corporation demonstrates that one type of vehicle -- the hybrid -- is standing that time-tested adage on its head. Well-heeled customers are purchasing Toyota Priuses, Honda Civics, Ford Escapes and other non-luxury hybrid vehicles in significant numbers, and it could have a profound effect on the entire vehicle market.
As a matter of fact, hybrid models are scrambling the traditional marketing efforts in several ways. Not only are wealthy individuals buying non-luxury brand hybrids, but hybrid models are driving a significant degree of brand-switching as consumers seek hybrid models from brands that they would not otherwise have bought. Well-educated, affluent, tech-savvy buyers who previously gravitated to luxury brands now are showing a willingness, or even eagerness, to shop for non-luxury brands if they offer hybrid technology that interests them.
So who are all these hybrid buyers, anyway? The study looked at the typical characteristics of a hybrid buyer and found that they shared several lifestyle traits. When comparing buyers of mid-market conventional models to hybrid buyers of those same models, the study found that hybrid buyers are not only more interested in environmental issues, which is largely a no-brainer, but are also more interested in science and space, science fiction, music collection and even camping than their non-hybrid counterparts.
They are also centered in two well-defined geographic areas. The research found that more than 50 percent of consumers with a high propensity for the hybrid Ford Escape, for example, are located along the East and West Coasts, while traditional Ford Escape prospects are more evenly dispersed throughout the middle of the U.S. With import brands, this effect was less pronounced, since import brands are traditionally strong on both coasts anyway.
Just because hybrid buyers are taking a "step-down" from their normal luxury category to a non-luxury brand doesn't mean they expect anything less in terms of technological features and advanced amenities such as navigation systems, premium entertainment-sound systems, onboard diagnostics, Bluetooth compatibility and other technologies. They want a luxury-like experience.
"Clearly, these hybrid buyers are the trendsetters that are helping to shape the modern automotive landscape," said Tim Longnecker, automotive industry executive for Acxiom. "They're tech-savvy and demand the performance and amenities of luxury brand vehicles and are willing to pay for it. This presents an opportunity to position hybrid vehicles to a very different consumer set.
"Another fascinating aspect of the hybrid phenomenon is the brand-switching it has fostered. The study found quite clearly that hybrid vehicles drive brand- switching, referred to in the industry as "conquesting" because buyers often choose a different-than-current brand when purchasing hybrids at a greater rate than non-hybrid buyers. For example, 77 percent of Toyota Highlander hybrid buyers come from other manufacturers as opposed to 67 percent of Toyota Highlander non-hybrid buyers.
"There is great opportunity for manufacturers of hybrids to tune into consumers' preferences and grow their customer base at the expense of the competition," said Longnecker. "For many manufacturers, hybrids are reaching prospects that their traditional models could only dream of."