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This new finding on how young people choose cars could transform the auto industry’s marketing strategy

A woman cleans near Mercedes-Benz cars before a news conference on media day at the Paris Mondial de l'Automobile, October 2, 2014. The Paris auto show opens its doors to the public from October 4 to October 19.
REUTERS/Jacky Naegelen
Meredes might want to focus on Mom.
By Zach Wener-Fligner
Published Last updated This article is more than 2 years old.

When it comes to buying a car, mom and dad matter.

A new study to be published in the Journal of Industrial Economics shows that Ford begets Ford: people are 39% more likely to buy a car brand if their parents also bought that brand.

Researchers looked at car purchase data from over 4,000 children and 2,500 of their parents collected via national surveys between 1999 and 2011. They controlled for a number of factors that might dictate car buying, including location, income, gender, and family size—eliminating the possibility that children and parents are only more likely to buy the same cars because they tend to have similar needs.

This research could transform how the auto industry targets different demographics. If younger customers enter the market with preexisting brand loyalty, a company can charge more for entry-level vehicles because there’s less pressure to compete on price. Companies might also shift more resources to market towards older customers, in hopes of drawing in those customers’ kids as part of the package.

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