Millennials overtaking boomers as targets of auto industry marketers
Almost 70 years ago, the world stopped warring and started procreating — to put it bluntly. The result was the postwar baby boom, a demonstrably large consumer demographic that automakers have been marketing their new vehicles to ever since.
Next year, the Ford Mustang — launched when the majority of boomers were becoming teenagers and young adults — will celebrate its 52nd birthday. Not coincidentally, that’s the same age as today’s average new car buyer, according to the research firm IHS Automotive. But after decades of being the primary demographic group targeted by automakers, the era of the boomer buyer will soon come to an end.
The boomers’ share of new vehicle purchases peaked back in 2010 and is on the wane, according to a J.D. Power & Associates report. After the boomers buy their last new cars, who will automakers target with their marketing guns? More and more, it looks like it will be millennials.
The millennials — also known as generation Y — are those born between the early 1980s and early 2000s. Where the Internet, PlayStations, GPS navigation and iPhones can still befuddle their boomer parents, this is the first socalled “digital-native” generation. Although there’s been a misconception that millennials are simply not interested in cars — the one object their parents have continually lusted for — this younger generation recently became the second-largest group of newvehicle buyers.
J.D. Power & Associates says millennials made up 27 per cent of new-vehicle sales in the U.S. in 2014. Knowing this, and after decades of chasing their parents, automakers have started to shift their focus to the millennial buyer. This changes nearly everything, from the types of tech- nology in new vehicles and how cars are being purchased to the design and development of new vehicles.
One way millennials have changed the auto industry is with their desire for more smartphone-enabled infotainment systems in their cars. Where some boomers still want CD players, a recent survey from U.S.-based AutoTrader.com found the most desirable new car features that millennials want are navigation systems, satellite radio, Bluetooth wireless connectivity, an MP3 player and integration with their smartphones.
Millennials are also demanding more on-board technologies to help them go, stop and park. This past June, Ford shared its consumer research on trends expected to influence automotive products and brands for 2015 and beyond. One of the hot topics was how much millennials fear driving and the subsequent desire for more autonomous driving technologies.
According to a poll conducted for Ford by market research firm Penn Schoen Berland, 88 per cent of millennials and generation Z — those between the ages of 16 and 22 — fear “other motorists driving dangerously” ahead of public speaking, death, spiders and snakes. Specific on-road scenarios young drivers said they fear most are snowy or icy roads, tight parking spots, backing into busy streets, blind spots and “not knowing where I’m going.”
Even automakers that have catered to driving enthusiasts are recognizing a new group of drivers who are quite happy to let the car drive. Hildegard Wortmann, senior vicepresident of BMW’s product management, told Automotive News that the German automaker could not ignore the growing demand for autonomous driving features.
“What has changed is there are more and more situations where it isn’t fun to drive,” he said. “It is nice to have the hassle taken away.”
In the end automakers are having to respect the sheer size of the millennial cohort. The vehicles that meet the needs of the millennial newcar buyer will eventually take over showrooms.