Much has been written in these pages, and in other industry journals, about the fears that the millennial generation are growing in numbers and importance, but that they lack the passion for vehicle ownership displayed by previous generations.
This has led to lots of alarmist cries and much anxiety, as dealers wonder how their businesses will be sustainable when the next generation of buyers don’t need or seem to want their products.
Many reasons have been cited for this, from being part of an urban lifestyle with easy access to mass transit, to a rejection of gasoline fueled vehicles due to their heightened environmental concerns, their adoption of ride sharing platforms, and because they lack the buying power to afford them.
While elements of all of those might be partly true, the data tells a different story according to Marty Miller, senior product marketing manager for Experian Automotive. And the news is good for car dealers.
Millennial vehicle market share jumped from 27.9 per cent in Q1 2017 to 29.7 per cent in Q1 2018
For starters, let’s try to define who millennials are. They are people born between 1981 and 1996 (aged 22-37) — and they are now the largest cohort in the Canadian workforce.
Experian’s data shows that this group were responsible for all new-vehicle sales growth in North America during the first quarter of 2018.
Millennial vehicle market share jumped from 27.9 per cent in Q1 2017 to 29.7 per cent in Q1 2018. Generation X was flat at 22.7 per cent, baby boomers fell from 25.2 per cent to 34.1 per cent and the “mature market” fell from 9.6 per cent to 9 per cent.
“The demographic is maturing and is now poised to be a driving force in automotive marketing. But, what’s behind millennials’ apparent change of heart toward vehicle ownership? In short, they are growing up,” writes Miller in his blog post on the topic.
It’s also worth noting that the types of vehicle they purchase are similar to other groups, with 94 per cent of vehicles bought fueled by gasoline.
Miller makes a good observation about why millennials might have got a “bad rap” as a group of car buyers. In 2008, when millennials first entered the car buying market, “the auto industry and the entire economy hit rock bottom. Millennials were often woefully underemployed (and in many cases unemployed) making a new vehicle out of reach financially.”
He writes that with an improved economy, and with a few years of work under their belts, they are in a better position financially. It’s also worth remembering that almost half live in the suburbs, making vehicle ownership more necessary to sustain those jobs.
So what does this mean for dealers?
It means all the other pressures facing your business, to improve the retail experience, to provide more digital tools for buyers, and to adapt your marketing to reach millennials where they are “hanging out” are more true than ever.
