||Study: Millennials Focused on Vehicle's Image, More Open to Imports
Younger people ages 16 to 32 are interested in driving but are delaying getting a driver's license more than previous generations. They are also more conscious of a vehicle's image and more open to import brands than older age groups, according to a study released last Friday.
AutoTrader.com, a car shopping website, released its Millennial-focused "The Next Generation Car Buyer" study during the Automotive Press Association meeting in Detroit. By 2020, Millennials are expected to represent 40 percent of car sales.
"Millennials do care about cars and they do intend to drive," said Isabelle Helms, senior director of research and marketing analytics for AutoTrader.com. "They're just delaying their purchase and cars are a very important part of their lives."
Half of young Millennials ages 16 to 24 don't own a car, with most saying they can't afford it, AutoTrader.com says. But half of those without a car drive someone else's and three-quarters surveyed said they plan to buy a car in the foreseeable future, Helms said.
More than 70 percent of people ages 16 to 24 say infotainment features are "must haves" in vehicles. About 50 percent of Millennials want a car that reflects their personality, and nearly 40 percent said a car should reflect their accomplishments.
Chevrolet has seen its market share of buyers under age 35 double from 2010 to 2013 as the brand has three entries popular with Millennials in the Spark, Sonic and Cruze. Chevrolet Sonic Marketing Manager Dora Nowicki said features such as styling, fuel economy and technology are important to Millennials and are shown in the three vehicles.
Ford Motor Co. says more than 30 percent of sales of its new Fusion are to Millennials and it continues to see strong sales success among younger buyers with its subcompact Fiesta. Ford says 46 percent of Fiesta buyers are Millennials and buyers from Generation X.
"It's a small car, it's incredibly fuel efficient and it's loaded with technology so it provides that aspiration that Millennials are looking for, reflecting their personality, but in a way that's practical and they can also afford," said Amy Marentic, a Ford marketing manager.
All automakers are focused on how to attract more younger buyers to their brands. Just 11.5 percent of all new cars and trucks are purchased by buyers in the 18-34 age bracket, down nearly 3 percentage points from 2008, according to data from Polk.
Younger buyers like stylish and luxury brands and also praise innovation and sophistication, but are most likely to buy mainstream brands, the AutoTrader.com study found. They also are more likely to use word-of-mouth when shopping for vehicles than Generation X (ages 33 to 47), and Baby Boomers (ages 46 to 66). Millennials also are more likely than other generations to be introduced to a desired vehicle through family or friends instead of on a dealer lot.
"While Millennials may not be able to afford many of these brands now, the brand-fit metric is a good way to look at where the market is headed," Rick Wainschel, vice president of of automotive insights for AutoTrader.com, said in a statement. "Lower price-point vehicles like the Mercedes CLA, BMW 1 Series and Audi A3 are making luxury cars more attainable for Millennials earlier in life, which could help these brands establish long-term consideration and loyalty."
Keeping a Millennials' loyalty is also harder than with previous generations. AutoTrader says 30 percent of Millennials are loyal to a current brand compared to 41 percent of Generation X and 47 percent of the Baby Boomer generation.
The Audi brand was tops on Millennials' lists for overall brand fit, reflecting the buyers' personalities; that was followed by Honda, Mercedes, Toyota, BMW and Chevrolet. But while younger buyers may aspire to buy luxury brands, they are more likely to buy mainstream brands, with Honda topping their list, followed by Chevrolet, Toyota and Ford.
They are also are less interested than other generations in buying a vehicle made by U.S. workers, with just 38 percent of Millennials citing this as important compared to 53 percent of Generation X and 60 percent of Baby Boomers.
"It's important for the domestics to not hang their hat on 'Made in the USA' to the same degree that they may have in the past," Helms said.
The study, conducted online, also found 36 percent of younger Millennials, ages 16 to 24, were delaying getting a driver's license, with 23 percent citing that they are too busy with other things. Nineteen percent listed they are afraid of driving, while 15 percent said it's too expensive and 14 percent said they want more time to train.
(Source: The Detroit News, 08/23/13)