Like all emerging generations, Millennials tend to be misunderstood by their older counterparts. Auto dealers and manufacturers have their own preconceived notions about this group — assumptions that they need to toss aside if they want to successfully connect with this generation. Millennials — generally speaking, those born between 1980 and 1995 — comprise a powerful demographic.
They’re set to become the most populous generation in the U.S., eclipsing Baby Boomers, and they have tremendous spending power. According to Javelin Strategy & Research, Millennials’ income will surpass that of Baby Boomers and Gen X’ers by 2020. By 2025, Millennials will account for 46 percent of total personal income in the U.S., according to Accenture. And compared to previous generations, they’re also more connected, more diverse, more media savvy — and more aware of what they want and how to get it.
One of the main misconceptions about Millennials are that they’re either not interested in or do not have the means to purchase vehicles. But there’s plenty of data available to contradict the notion that this applies to all Millennials. In fact, Millennial consumers now account for a larger percentage of U.S. new-vehicle retail sales than their Gen X counterparts. Millennials accounted for 26% of new-vehicle retail sales. For the first time, that puts them ahead of Gen X’ers. That group bought 24% of new vehicles.
Furthermore, according to a Cars.com Nielsen Omnibus study, Millennials are significantly more likely to indicate they will purchase a car in the next 12 months, compared with U.S. adults overall. 35% of millennials indicated they will purchase a vehicle in the next 12 months compared to 25% of total U.S. adults. And their importance will only continue to grow: According to the Deloitte 2014 Global Automotive Consumer Study, almost two thirds of Millennials plan to buy or lease a car within the next three years, and more than three quarters plan to purchase or lease within the next five years.
It’s also important to note that diversity is a defining characteristic of Millennials, and they include a wide range of ages and lifestyles. While the younger end of the generation is just entering adulthood and may delay car purchases, the older members are in their mid-30s — a time when many are starting families and may be in the market for a second family car. And given the variety of lifestyles and life stages Millennials represent, it’s clear that this group is relevant to dealers of all types of vehicles, from entry-level compacts to minivans to luxury sedans.
So if the old marketing assumptions don’t apply to this generation, how should auto marketers respond?
To find out, download our 2015 Millennial Outlook white paper today.