Shopping Behavior for Millennials Raises Industry Eyebrows

millennials_driving_less22

Will Millennials Change How Cars are Bought and Sold?

Dri­ving Sales News asks: Where have all the dri­vers gone? Some­thing shifted with regards to our dri­ving behav­iors dur­ing the mid 2000’s and we sim­ply started dri­ving less even though the pop­u­la­tion con­tin­ued to grow.

The Reuters staff sug­gests: This trend is reflected in vehi­cle own­er­ship, which has decreased by 4 per­cent between the all-time high of 1.24 vehi­cles per dri­ver in 2006 and now.

The per­cent­age of driving-age Amer­i­cans with licenses also fell to a 30-year low of 86 per­cent in 2011 from an all-time high of 90 per­cent in 1992.

Edi­to­r­ial com­ment: And so we ask, could Mil­len­ni­als have some­thing to do with it?

Con­sider this sta­tis­tic: Today’s 20-something Amer­cians drive approx­i­mately 20% less today that their par­ents did while they were in their 20’s.

The ques­tion remains though, what hap­pens when this seg­ment of the pop­u­la­tion ages, moves out of their parent’s houses, enter the pro­fes­sional work­force and start their own fam­i­lies? They will even­tu­ally need vehi­cles. And when they do enter the mar­ket it could cre­ate a much needed buy­ing spree. Or, will their his­tor­i­cal activ­i­ties and future needs cre­ate a new stan­dard of auto­mo­tive shop­ping behav­ior and dis­rupt the retail indus­try even further?

Mil­len­ni­als are becom­ing “the new face” of Amer­i­can auto buy­ers, asserted Jim Far­ley, Ford Motor Co.’s global sales and mar­ket­ing chief, dur­ing his keynote speech at the auto show. “And we’ll be sur­prised,” he added, “by what they choose.”

But Lacey Plache of Edmunds.com says: Mil­len­nial Behav­ior Sug­gests They Might “Like” Cars after All

Plache:  it was good news for the auto indus­try when the Mil­len­ni­als showed the first signs of a come­back in 2012. New car pur­chases by Mil­len­ni­als not only grew with the rest of the mar­ket but Mil­len­ni­als actu­ally out­paced all other age groups (except the 75 and over buy­ers) and thereby increased their share of sales as well

Increased new car buy­ing by Mil­len­ni­als is not the only good news for the auto indus­try. What they are buy­ing is also encour­ag­ing — specif­i­cally, lux­ury and sports cars. Even though the Mil­len­ni­als’ over­all share of sales is smaller, in every income group except the high­est ($150,000 and over), aged 25 to 34 Mil­len­ni­als buy lux­ury cars to a sim­i­lar extent or more as older buy­ers with same income. Plus, in nearly every income group, 18 to 24 year old Mil­len­ni­als pur­chase a greater share of entry and midrange sports cars than the older buyers.

And, although Mil­len­ni­als still sub­stan­tially under-buy com­pared to their share of pop­u­la­tion, the gap between their pop­u­la­tion share and their share of new car pur­chases is shrinking.

Bot­tom Line comes from Reuters: That has led major automak­ers, includ­ing Gen­eral Motors Co., Ford Motor Co. and Toy­ota Motor Corp. to rework their line­ups with dif­fer­ent body styles and more tech-savvy fea­tures aimed at draw­ing young Amer­i­cans’ inter­est.

 

 

 

 

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