It's no secret that major automakers are trying to attract younger consumers -- after all, they're the lifeblood of future sales and financial success. The thing is, millennials have been slightly more reluctant to purchase vehicles than their parents were. Given that headwind, Ford Motor Company's (NYSE:F) Mustang is selling quite well this year, and the stats about the ages and types of consumers buying the redesigned 2015 model look very promising for Ford's efforts to rope in millennials. Here are the details.
Most investors realize that the automotive industry is extremely competitive. It's also no secret that it's more expensive to lure consumers from competitors than it is to retain those who already favor your vehicles. For those reasons, when a certain model is successful at stealing consumers from the competition, it's a win worth celebrating. In large part because of a new engine, the latest Mustang is doing just that.
One of the ways Ford updated the 2015 Mustang was with a model that features a four-cylinder EcoBoost turbocharged engine, and based on the statistics from J.D. Power, that appears to have been a brilliant move to attract a new and younger consumer to the iconic vehicle.
Consider that Mustangs equipped with EcoBoost engines accounted for nearly half (47%) of the model's sales in Southern California through the first half of 2015. Better yet, 56% of new EcoBoost Mustang sales in Southern California were to people who didn't already own a Ford, according to J.D. Power PIN data. That suggests, in my opinion, that the EcoBoost is doing its job for the Mustang by bringing in consumers who likely wouldn't have considered a Mustang without a more fuel-efficient four-cylinder turbocharged engine, or likely wouldn't even have considered a muscle car in general.
"Almost all of our Mustang growth there can be attributed to EcoBoost," said Ford sales analyst Erich Merkle in a press release.
But wait, there's more. In addition to the EcoBoost generating sales growth for the Mustang, it's also bringing in those elusive younger consumers. Drivers in the 16-to-35-year-old demographic account for 47% of U.S. market share for the 2015 Mustang, up from 30% for the 2014 Mustang.
The big picture
Overall, the automotive industry typically states 60 days as the average time to turn a vehicle, but Mustangs are flying out of Southern California dealerships in an average of 16 days. While that's a relatively small sample, remember that California is a huge market. Quite simply, the sales gains and turn rate of the Mustang are impressive.
In fact, the 2015 Mustang is reinvigorating the model's sales numbers to a level not seen in nearly a decade.
One more piece of good news for investors is that, for the first time in its history, the Mustang is hitting the pavement abroad in a big way. If Ford can replicate the success the Mustang is having in Southern California across the rest of the U.S. and then in foreign markets, the redesigned muscle car may be one of this decade's biggest wins for the automaker.