Gen X, Y consumers less brand conscious — J.D. Power

TROY, Mich. (March 24, 2016) — Younger consumers in the U.S. are less major brand conscious than than their elders when it comes to buying aftermarket tires, according to the J.D. Power 2016 U.S. Original Equipment Tire Customer Satisfaction Study.

That's not to say, however, that younger consumers favor less expensive brands, rather they're focused on the value proposition, the firm said.

Separately, J.D. Power said the Michelin brand was ranked highest in three of the four segments it tracks — luxury, passenger car and truck/utility — while Pirelli ranked No. 1 in the performance sport segment.

Established tire brands such as BFGoodrich, Bridgestone, Goodyear and Michelin still have the highest consideration rates among all generations, J.D. Power said. But Gen X and Gen Y consumers are more likely than Baby Boomers or Pre-Boomers to consider less well-known or newer U.S. market brands like Cooper, Hankook and Pirelli when replacing the OE tires on their vehicle.

Seven out of 10 Gen X and 72 percent of Gen Y car owners switched tire brands if they replaced two or more tires, J.D. Power said, which contrasts sharply with the replacement rates for Boomers (59 percent) or Pre-Boomers (61 percent).

J.D. Power defines Pre-Boomers as those born before 1946; Boomers as those born 1946 to 1964; Gen X, 1965 to 1976; and Gen Y, 1977-1994.

“Gen X and Gen Y are more receptive to the lesser-known brands in large part because those manufacturers have focused their marketing efforts on younger consumers,” said Brent Gruber, director, global automotive division at J.D. Power.

“These consumers are increasingly looking at the value proposition, not just the cost or brand of the tire; if the perceived value is there, they're willing to spend more or consider alternative brands.”

Given the size of the U.S. passenger and light-truck tire market — nearly 300 million tires, with more than three-fourths of that coming from replacement tires — Mr. Gruber said manufacturers cannot afford to ignore younger consumers.

Gen X and Y combined accounted for 53 percent of new-vehicle retail sales in 2015, up from 50 percent in 2014.

“The OE tire experience generates a lot of replacement tire sales, so it's critical for manufacturers to ensure that they're providing a positive experience and building future loyalty,” Mr. Gruber said. “There is a lot of business at stake, and tire manufacturers are faced with a large and growing younger customer base that isn't necessarily as brand loyal as previous generations.

“The key to attracting and keeping younger customers is to demonstrate the value and performance of the tire.”

The study measures tire owner satisfaction in four vehicle segments: luxury, passenger car, performance sport and truck/utility. Satisfaction is examined in four measures: tire wear; tire ride; tire appearance; and tire traction/handling.

Study results and rankings are based solely on owner experiences with their tires after two years of vehicle ownership, the company said.

Other key findings the J.D. Power disclosed:

• Tire performance and satisfaction tend to decline to a certain point as mileage accumulates on the tires. The tipping point for a satisfaction drop appears to be 25,000 miles.
• Owner satisfaction with tire traction in poor weather conditions after one year of ownership remains unchanged vs. last year but improves slightly after two years.
• Only a quarter percent of customers who experience a wet traction problem with their tires said they “definitely will” or “probably will” recommend their tire brand to others, compared with 69 percent of those who have not experienced this problem.

In the individual brand rankings, J.D. Power disclosed the following (based on a possible 1,000 point scale):

• Luxury — Michelin (742), Pirelli (705), Continental (688) and Goodyear (671), with an average rating of 700.
• Passenger car — Michelin (724), Pirelli (689), Goodyear (684) and Nexen (651), with an average of 659.
• Performance sport — Pirelli (724), Michelin (718), Goodyear (705) and Bridgestone (682), with an average of 705.
• Truck/utility — Michelin (698), Pirelli (680), BFGoodrich (663) and Goodyear (658), with an average of 649.

The 2016 U.S. OE Tire Customer Satisfaction Study is based on responses from 31,977 original owners of 2014 or 2015 model-year vehicles. The study was fielded in October through December 2015, according to J.D. Power.