Recently, Experian published its fourth quarter report on the car market, revealing several unexpected shifts in consumer preference and brand rankings. On this episode of Inside Automotive, John Howard, Director of Product Management at Experian Automotive, sits down with host Jim Fitzpatrick to discuss the data and what it means for the industry.
For Q4, Experian narrowed its focus on the passenger vehicle market. Howard notes that while Gen Z and Millenial buyers were at the top of overall registrations in this segment, Gen X less likely to show interest in smaller vehicles. The chief reason for this discrepancy is affordability. He explains that passenger vehicles are typically cheaper than mid-size SUVs, minivans etc., making them more budget friendly for younger generations. Howard also notes that larger cars are perceived as “less sporty.”
While electric vehicles have been a major topic of discussion in the industry, Howard also notes that the majority of cars sold in the passenger segment were gas-powered for nearly every brand. The only exception to this rule is Tesla, one of the few EV focused manufacturers to profit from the market.
However, while the automaker still retains control over the majority of the luxury electric segment, it may find it more difficult to stay ahead of the competition in the coming years. “One of the most surprising things about this consumer report, was that Tesla’s dominance is beginning to lessen,” remarks Howard. Competing EV manufacturers, such as Rivian and Lucid, have started to encroach on its formerly exclusively-held territory, while luxury focused brands such as Porsche and Mercedes have introduced their own products to the market.
Another surprising detail to come from the Experian report is the weakening of the passenger vehicle segment. Howard notes that between 2019 to 2022, the market actually shrank by 6% to 18%. This decrease has been noticed by automakers such as Ford, who have begun to transition away entirely smaller vehicles. If consumer preference continues to change, more OEMs could follow suit in the coming years.
