Don’t Forget Millennials As Their Market Share of Auto Industry Grows
Previously believed to be generally uninterested in the auto industry, Millennials have begun to surpass their predecessor (Gen X) in car purchases, as an analysis done by J.D. Power and Associates has proved. Millennials now account for 26% of new car purchases while Gen X accounts for 24%. Baby Boomers still account for the largest segment of new car purchases, holding a majority of 34%, however marketers are increasingly paying less and less attention to the demographic. Gen Y, the Millennials, are the fastest growing segment due to their age, well more so their youth.
Taking the “youth” factor into account, one must realize that Gen Y is “growing” across various spectrums. Millennials are obtaining positions that allow a growth in income, starting families that are indeed “growing” and furthermore, their desire to upgrade their toys is growing as well. With new incomes, new families and new desires comes a desire to upgrade their former “jalopy” to something more aesthetically pleasant, safer, and for many; more eco-friendly.
The most popular style car for Gen Y is the small, compact vehicle similar to the Kias, Toyotas, and Hondas which make up close to 50% of all purchases. Gen X prefers mid-sized sedans, however a transition to larger vehicles is expected to come with time as Gen Y continues to age.
Since this younger generation is becoming the key consumer, it is important for marketers to keep up with the trends, preferences, and purchase behaviors that they tend to exhibit and enjoy. Gen Y has been raised with the internet readily available, and they have become the pioneers of social media. Being the “social” people that they are, it is quite ironic to note that they actually prefer to not interact with people, that is, in person, at least.
Keeping this in mind, it is necessary for auto brands to have as much information and interactive tools available to their audience(s) via their websites and social media pages as possible. If today’s Gen Y consumer can conduct research independently, locate what they are searching for, weigh their options, determine their credit score, read what reviews from what other consumers have to say about a specific product, and become familiar with warranties and packages etc. before they even have to step foot into a car dealership, they will ultimately feel more comfortable and confident in their decisions, especially when in relation to what could very well be their first major purchase.
A final note: Online personalities are as important to Gen Y as face-to-face personalities are to Gen X and Baby Boomers. With the nature of the automobile industry being so heavily weighted in the actual, physical, in person experience, it might be a good idea to consider having live sales associates available to chat via the brand’s website in an effort to directly answer any questions that the consumer may have, in real time, and of course via Gen Y’s favorite mode of communication: the digital kind!