Thirty years ago, the 21 to 34 age group was buying 38 per cent of all new cars. By 2015, according to J.D. Power & Associates, that number had dropped to 27 per cent. Fast-changing consumer behaviour is presenting some challenges for the automotive industry.
An academic paper from the University of North Carolina in 2015 reveals that millennials are driving less than previous generations. It cites changing attitudes and the use of online shopping and social media to explain a 35 to 50 per cent drop in driving amongst this group.
It’s also significant that in a survey of 1,500 16 to 36-year olds – the Millennials, Generation Y, Generation Me, Echo Boomers or whatever you like to call them – by ad agency Moosylvania asking which brands they preferred, not a single automotive brand ranked in the top fifteen.
So is the millennial generation falling out of love with the car?
Mitsubishi Motors doesn’t think so. Neither does Mercedes-Benz – or Porsche. These and other forward-thinking automotive marques, acknowledging the huge marketing challenges posed by the digital revolution, believe that the key opportunity lies in confronting today’s seismic shift in consumer behaviour on its own terms.
It’s the brand that matters
It is not a question of whether millennials need a car in this age of competitive personal transport with offerings from the likes of Uber and Lift – or the trend towards people working from home. It’s about wanting. And desirability, say the automotive marketers, all comes down to brand – brand authenticity, personalized service and a seamless digital experience.
The crucial millennial market may be of particular significance to the automotive industry’s future thinking, but the digital world increasingly envelops every age group. The Baby Boomer generation, for example, already accounts for a third of online and social media users. Pew Research says that 92 per cent of these potential customers will quote online reviews and forum comments when talking to car sales staff. And a survey by Strategy& as far back as 2013 tells us that, even then, more than 90 per cent of dealerships were reporting a growing volume of customers who had already chosen their brand and model before arriving at the showroom.
For most people, buying a car is the second biggest financial commitment of their lives. It can be an emotional process. And given the scope today’s buyer has for research and comparison, of course the buying process has to match up to the digital experience we all now expect.