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Ford: boomers leading trend to compact utility vehicles

Industry data supplied by Ford Motor Company and Del Webb, part of the multi-brand homebuilder PulteGroup, show that the baby boomer segment (ages 55 to 64), which comprised the growing market for large homes and made minivans and big SUVs vogue are now shifting to still lavish, but smaller homes and utility vehicles.

Small utility vehicles are most popular with buyers in this age group; more than 46% of premium Ford Escape Titanium buyers are 56 or older, indicating trendsetting boomers are opting for high-series models loaded with technology and amenities. Baby boomers who purchase homes from Del Webb, which caters to the 55-plus market, prefer more efficient, one-story homes; premium options these buyers specify add about 20% to the price of the home.

Vehicles. An uptick in small utility vehicle sales started in 2004 and has continued a steady climb, according to retail sales data from Polk, which was recently acquired by IHS. Correlating with the number of adults considered to be baby boomers is the number of smaller, car-based utility vehicles being sold to that demographic.

The largest demographic buying small utility vehicles such as the Ford Escape are people between the ages of 55 and 64, according to Polk. The second-largest demographic are those between 45 and 54. The number of 65- to 74-year-olds purchasing small utility vehicles has more than doubled since 2009 – growing at more than twice the rate of new retail vehicle sales overall in the demographic, according to the same data.

Ford Escape is outpacing the industry in key population segments, including every age demographic above 55 years old.

In year-over-year retail sales, Escape is experiencing 24% growth—outpacing the national compact utility vehicle average increase of 18%. Escape is over-indexing in four cities particularly attractive to baby boomers: Miami, up 53%; Orlando, up 34%; Phoenix, up 27%; and Charlotte, N.C., up 26%.

The 2014 Ford Escape compact utility vehicle features 98.1 cubic feet of passenger volume—about a 21.4% difference from the 2014 Ford Explorer’s 151.7 cubic feet. Between Ford Escape and Ford Expedition, there is an estimated 31% difference in passenger volume.

Houses. The trend in homes increasing in size was a constant from the 1950s on, with average home sizes going from 860 square feet in 1960 to 2,505 square feet in 2012. While baby boomers helped fuel that trend, data shows they are now breaking away, seeking cozier homes with top-of-the-line amenities and features, according to Del Webb, which found 28% of people between the ages of 55 and 59 prefer to downsize with their next home purchase.

Homes built by Del Webb, the largest builder of 55-plus communities, average approximately 2,200 square feet with plenty of demand for additional living space, such as lofts and sunrooms. These premium-style homes typically include two bedrooms and two bathrooms, a den and a 2.5-car garage.

The average price of a Del Webb home in 2013 was $302,000, with buyer-selected options and upgrades representing approximately 20% of that price.



Some 97% of the current FULL baby boomer generation (50 to 70) have, for the first time in USA and Canada, less buying power and NET accumulated real wealth than their parents.

Consequently, they will have to downsize their home, vehicles and most other expenditures.

If the transfer of wealth from the 97% to the 3% continues at the current rate, the next generation will have to face the same reality. The baby boomers 2 or X generation will probably have to use public transportation more and further downsize their home and other expenses.

Future smaller lower price electrified vehicles may help to fill the gap for one generation or so. The reduction of crude oil importation to zero will also help if a major part of the benefits is passed on to the 97%. Unfortunately, that MAY NOT happen and most of the benefits will be hidden away in tax heavens as usual.

The American and Canadian middle class is progressively becoming poorer. Their net income has been going down for the last 12 to 15 years (in 2000 dollars). To compensate, they have been going deeper in debt, 3 or 4 different ways: (personal, local city and district government and Federal government etc). Many more had to resort to personal bankruptcy. For the first time, large cities have declared bankruptcy. Federal and States/Provincial governments also had to go deeper and deeper in debt.

The Debt Bubble may be the next one to burst unless the 3% starts to pay a larger share of the burden.

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