We’re not buy­ing it

Mil­len­ni­als are the tar­gets for new-car ads — but the big spenders are the cashed-up Baby Boomers

The Advertiser - Motoring - - FEATURE - JOSHUA DOWLING NA­TIONAL MO­TOR­ING EDITOR joshua.dowling@news.com.au

THE glossy brochures and fast­paced tele­vi­sion com­mer­cials are full of twenty-some­things moun­tain-bik­ing and sip­ping lat­tes at in­ner-city cafes.

But the re­al­ity is the city SUV craze is driven by Baby Boomers, the over-50s with dodgy hips who find them eas­ier to climb into.

Re­searchers say the num­ber of young Aus­tralian driv­ers buy­ing a new car is de­creas­ing as they strug­gle to keep pace with the ris­ing cost of liv­ing and mega mort­gages.

The av­er­age age of a new-car buyer in Aus­tralia is 50 but that av­er­age goes up for baby SUVs.

Li­cence data in Aus­tralia shows the num­ber of learner per­mits is­sued to teenagers over the past decade has kept pace with — or is slightly higher than — pop­u­la­tion growth.

How­ever, they are buy­ing fewer new cars than ever be­fore.

More peo­ple aged 70 and over are buy­ing new cars than those un­der 25, ac­cord­ing to in­dus­try sources fa­mil­iar with con­sumer buy­ing pat­terns for the ma­jor automotive brands.

This means the most vul­ner­a­ble road users — aged 17 to 25 — are more likely to be driv­ing older and less safe cars.

“Cer­tainly young buy­ers are less rep­re­sented in the new-car mar­ket given their pop­u­la­tion,” says an in­dus­try an­a­lyst.

“Un­der-25s rep­re­sent be­tween just 2 and 3 per cent of the to­tal new car mar­ket and yet are ap­prox­i­mately 12 per cent of all li­cence hold­ers.”

About 70 per cent of those younger buy­ers are women.

“That’s be­cause boys tend to go off and buy used cars they can hot up, or they can only af­ford a sec­ond-hand ute (for) their ap­pren­tice­ship,” he says.

The an­a­lyst says women are over-rep­re­sented among un­der-25 new-car buy­ers be­cause “they’re ei­ther more prac­ti­cal with their buy­ing de­ci­sion and want a car that doesn’t break down — or their par­ents are more in­clined to step in and help them buy a car that doesn’t break down”.

“It’s as if par­ents are say­ing, ‘I don’t care if my son drives around in an old clanger, but what if some­thing hap­pens to my daugh­ter’s car? I don’t want her stranded late at night.’

“She is seen as more vul­ner­a­ble if her car breaks down, is caught in the rain, and can’t get home,” the in­dus­try vet­eran says. “We have ridicu­lous dou­ble stan­dards about this stuff.”

The in­dus­try likes to think young peo­ple buy new cars, he says, “but they just don’t”.

“The idea that car com­pa­nies tar­get ad­ver­tis­ing of new cars at young peo­ple is a bit of a joke re­ally,” he says.

“Part of the prob­lem is there are ad­ver­tis­ing agen­cies that don’t like mak­ing ads for mid­dleaged peo­ple. Ads with a youth­ful look also make older buy­ers feel young at heart. It’s not cool to ad­ver­tise to old peo­ple, whether it res­onates or not.”

Con­sumer stud­ies show Baby Boomers are driv­ing record sales in the new-car mar­ket — and will do so for an­other 15 to 20 years.

The an­a­lyst ex­plains, “It’s just the shape of our pop­u­la­tion. It’s one of the rea­sons the av­er­age age of new-car buy­ers is just un­der 50.”

The pro­por­tion of new car buy­ers over 65 has risen from less than 20 per cent to more than 25 per cent in the past five years. “That’s what’s driv­ing the lux­ury mar­ket: the lux­ury brands are pulling prices down and baby- boomers are com­ing into money and into re­tire­ment.

“Years ago they might have as­pired to a Holden Calais, now they want a Euro­pean car. They’re also driv­ing SUVs be­cause they are eas­ier to get in and out of.

“The ads will tell you SUVs are about go­ing away camp­ing but for the ma­jor­ity of buy­ers it’s be­cause those cars are kinder to older peo­ple’s hips and knees and they’re eas­ier to load the gro­cery shop­ping into.”

Australians are also buy­ing smaller cars than they did a decade ago — hatch­backs and SUVs are now the two big­gest seg­ments of the mar­ket — be­cause we don’t drive as far as we once did.

“We tend not to drive long dis­tances on hol­i­days as much as we used to, thanks to cheap air­fares,” the an­a­lyst says. “We fly to where we are go­ing and spend more time at the des­ti­na­tion than in the car.”

Over­all, the seg­ment with the low­est av­er­age buyer age is peo­ple-movers. “It’s not be­cause younger peo­ple buy them, it’s be­cause older peo­ple don’t,” says a re­searcher.

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