It wasn't too long ago that experts were pointing the finger at Millennials, saying they were responsible for the imminent demise of the automotive industry. However, Google recently released the ‘Drive to Decide’ report, which suggests that, rather than destroying the industry, Millennials are helping it to transform.
Why we thought the automotive industry was in decline
When Millennials got to the same age as their baby boomer parents, the industry went into a tailspin trying to find out why today’s youngsters weren’t buying as many cars as the previous generation. We’ve found that it boils down to three factors:
Economic: The housing and job markets almost evaporated during the 2008 recession, and they are still recovering. The consequent hike in house prices/unemployment rate/day-to-day living means that Millennials have considerably less money to spend than their predecessors.
“They don’t have jobs. Our internal research says that they’ve only been able to afford used cars, if anything at all.” Mark Reuss (General Motors Co)
Technological: Apps such as Uber and CityMapper offer viable alternatives to car ownership. Millennials are the main users of these digital developments, so as they improve and become globally accessible, it seems likely that car ownership will decrease.
Cultural: Millennials could be described as the ‘subscription generation’. They prize experiences over ownership and this has paved the way for companies like Zipcar to provide a way for young people to drive without needing to own their own vehicles.
But did we speak too soon?
In short, yes. Millennials accounted for 27% of new car sales last year – that’s an 18% rise in 5 years. It seems that these 18-34 year old's take time to settle into a career and then buy a new car. They must prioritise their expenditures, and, sadly for the automotive industry, a shiny new car isn’t top of the list. However, it’s predicted that in 10 years, 40% of all new vehicles will be sold to Millennials. Automotive industry players should therefore act now to get this generation onside.
How Millennials buy a car
They’re “digitally savvy and visit the dealership less”. They are much more likely to watch videos, read online reviews and compare prices online than head down to the forecourt. 51% of buyers start their research online – the main entry point to the industry.
86% of buyers researched online before they purchased at a dealer. In fact, 96% of purchases still happen offline. However, this is set to change: 54% of Millennials would consider online purchase either now or in the future.
What the automotive industry can do now
Brands need a long-term approach that incorporates this web-first attitude. They must be able to track clients switching between mobile devices and offline means (phone calls, dealership visits). Infinity’s highly accurate call tracking software bridges this gap between on and offline lead management, and is an essential tool in managing the 26% of buyers who use more than 10 different touch points during the research phase.
The automotive industry must shift to keep up with Millennials, especially as Generation Z is hot on their heels. Who knows what they’ll expect from the automotive industry? One thing is for sure, though: you need to track exactly how the up-and-coming generations choose to buy their cars!
If you want to find out more about how to manage Millennials by using call tracking, get in touch.