Original Article

Journal of Targeting, Measurement and Analysis for Marketing (2009) 17, 81–92. doi:10.1057/jt.2009.8; published online 8 June 2009

The demographic threat to Detroit's automakers

Walter McManus1, Richard Senter Jr2, Richard Curtin3 and Michael S Garver4

Correspondence: Richard Senter Jr, Automotive Analysis Division, University of Michigan Transportation Research Institute, 2901 Baxter Road, Ann Arbor, MI 48109, USA

1is Research Scientist and Head of the Automotive Analysis Division, University of Michigan Transportation Research Institute. He earned a PhD in Economics from the University of California at Los Angeles. He has worked as a professor of Economics, and, in addition, was employed for 9 years by General Motors, and subsequently for 6 years by J.D. Power and Associates. His research concentrates on understanding the determinants of adoption by consumers of new powertrain, safety and telematics technologies. His recent paper on the link between gasoline prices and vehicle sales appeared in The Journal of the National Association for Business Economics.

2is Professor Emeritus at Central Michigan University and Adjunct Research Scientist at the University of Michigan Transportation Research Institute. He received a PhD in Sociology from the University of Michigan. His research focuses on firms in the automotive industry. He has published papers on supply chain relationships, the integration of multinational automotive suppliers and the recent history of General Motors.

3is Research Scientist at the University of Michigan, where he has been Director of the Surveys of Consumers at the Survey Research Center of the Institute for Social Research since 1976. He holds a PhD in Economics from the University of Michigan. He has published over 500 reports on trends in consumer expectations and their implications for changes in consumer spending and saving behavior.

4is Associate Professor of Marketing at the College of Business Administration at Central Michigan University. He received a PhD in Marketing from the University of Tennessee. His research and consulting practice emphasize customer and employee satisfaction, retention and segmentation research. He has published papers in the Journal of Business Logistics, Industrial Marketing Management, Marketing Management Journal, Marketing Research, Marketing Management and Business Horizons.

Received 9 April 2009; Revised 9 April 2009; Published online 8 June 2009.

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Abstract

The future of Detroit's automakers, even if they survive the current recession, looks grim. Cohort analysis of 24 years of US consumer household data suggests that the younger the head of the household, the more likely it is that the household automotive fleet includes foreign automakers' vehicles. Furthermore, preferences for foreign vehicles increase slightly as heads of households age. A regression model confirms and extends this finding. The risk to Detroit automakers is that their US customer base is dying out.

Keywords:

Detroit automakers, market share, cohort analysis, cohort effects, life cycle effects

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