Millennials Remain Critical to the Industry, Automakers Say

Bloomberg News

Young peo­ple – Mil­len­ni­als between 18 and 34 years of age – are buy­ing cars at a slow­er rate than their par­ents, but automak­ers con­tin­ue to chase after them.

Find out why Mil­len­ni­als are so crit­i­cal to the auto indus­try.

Young peo­ple are buy­ing cars at a slow­er rate than their par­ents, restrained by mount­ing stu­dent loan debt, a ris­ing cost of dri­ving and an increas­ing reliance on bik­ing and pub­lic trans­porta­tion. Car com­pa­nies con­tin­ue to chase them, bank­ing on the hope that today’s car-shirk­ers will be tomorrow’s car-buy­ers.

They are try­ing to attract the 18-to-34-year-old mil­len­ni­al gen­er­a­tion through a blend of social media cam­paigns, video game place­ments and peer-to-peer adver­tis­ing. It’s the 21st cen­tu­ry equiv­a­lent of putting a Hot Wheels car into a box of Frost­ed Flakes.

“This audi­ence is their future,” said Michelle Krebs, a senior ana­lyst at “It’s absolute­ly crit­i­cal that automak­ers try to get this mar­ket now.”

For automak­ers, the mar­ket­ing expense is a down pay­ment.

“It may be a long-term endeav­or to appeal to younger dri­vers because a lot can’t afford new vehi­cles now, but they will a few years down the road,” said Ed Kim, an indus­try ana­lyst at AutoPa­cif­ic Inc.

Michael Sivak, a research pro­fes­sor at the Uni­ver­si­ty of Michi­gan Trans­porta­tion Research Insti­tute, has found a shift in the peak age of vehi­cle buy­ers — from 35-to-44 in 2007 to 55-to-64 in 2011. That trend could be here to stay and spend­ing mar­ket­ing dol­lars on mil­len­ni­als may be mis­di­rect­ed, he said.

Krebs, of San­ta Mon­i­ca, Cal­i­for­nia-based, dis­agrees, say­ing that ear­ly evi­dence shows that the rate of mil­len­ni­al car pur­chas­es may be pick­ing up. The 18–34 age group fell from 14.5 per­cent of new-car reg­is­tra­tions in 2008 to 10.6 per­cent in 2011 before rebound­ing to 12.4 per­cent last year, accord­ing to R.L. Polk & Co. The gain last year out­paced all oth­er age groups, and mil­len­ni­al buy­ers are con­tin­u­ing to come back this year, Krebs said.




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