DEBUNKING A MYTH AROUND MILLENNIAL CAR BUYERS
Contrary to earlier speculation, Gen-Yers love cars as much as Baby Boomers
Back during the global financial downturn that began in 2008 and ran into the early part of this decade, there was much speculation about the idea that there was a behavioural shift underway and millennials would become the “de-ownership” generation, relying instead on transit, bikes, skateboards or their feet to get around.
We saw some bandwagon jumping forecasters labelling millennials — those born between the 1980s and 2000 and dubbed Generation Y — as the first generation who would actively avoid car ownership and single-handedly bring about ‘the end of the car culture.’ Well, that certainly hasn’t been the case. A recent study conducted by Strategic Vision has shown that millennials actually love cars as much as their predecessors. With the economy improving and as the generation matures, it has become obvious that the need for a vehicle of their own is still apparent, particularly in places like British Columbia
The study underscores the desire to own one’s own car has not been phased out, and although the purpose of owning one has changed throughout the years, it is still an important rite of passage for many.
While car-sharing services such as Evo, Car2go and Uber are definitely on the rise, they tend to be used for more specific reasons, such as going out for the evening or to avoid a costly cab trip.
Millennials are now known to be purchasing vehicles so frequently that they are second only to baby boomers, who come from a generation of updating their vehicles every few years.
New technology and apps are also shaping the way people purchase their vehicles. With the ability to research just about everything online, many car buyers know exactly what they want before they step foot into a car dealership to make their purchase.
This has increased the number of car companies selling cars at fixed prices. Tesla has long been an advocate for fixed prices and has made a practice of it, and last year Costco signed a deal with General Motors dealerships to sell 465,000 vehicles at a fixed cost.
It’s no surprise that millennials are choosing to go greener with their choices with a majority leaning toward Electric Vehicles (EVs) or Hybrids. With over 20 EV models available to choose from in the current market, prices that are actively competing with gasoline-powered equivalents and the look of these vehicles becoming increasingly attractive, it is easy to see why they are popular among this generation.
With millennials closing the gap on baby boomers as the largest living generation, auto retailers are paying close attention to what the Gen-Yers value, how they conduct purchases and what ultimately persuades them to buy.
Where a quality car radio was good enough for the baby boomer, millennials want full smartphone functionality.
This growing consumer powerhouse will continue to drive manufacturers to increase the technology initiatives in automobiles, something that is great news for all consumers.
Blair Qualey is President and CEO of the New Car Dealers Association of B.C. You can email him at bqualey@newcardealers.ca.