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Millennials’ Purchasing Power Reshaping Auto Industry

Gen-Y auto purchasing power reaches $135 billion.

by on Jan.29, 2015

Millennials are starting to buy more new cars, after all, and have increased purchasing power.

It’s often said that Millennials have a very different view of the automobile – and a new study suggests they are gaining the purchasing power to reshape the auto industry into their own image.

Americans born between 1980 and the late 1990s are expected to account for about 25% of the new vehicle market this year. That means they will generate sales of 4.24 million vehicles, according to data tracking service TrueCar — the equivalent of $135 billion in purchasing power.

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Talking About The New Generation!

“Improving economic conditions are shifting the rhetoric around Millennials and car buying,” said TrueCar President John Krafcik. “They are the largest growing cohort in the market and saying they don’t like cars simply isn’t true anymore. We know having a car means the same thing to Millennials that it does to other generations: independence and identity.”

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Millennials Move from Cars to SUVs – Just Like Their Parents

Compact cars lose their luster as Gen Y ages.

by on Aug.19, 2014

The Ford Explorer Sport is the perfect vehicle for conquering the concrete jungle.

Ford's Explorer is one of its more popular models with Gen Y as Millennials turn away from compact cars.

Conventional wisdom would suggest that Millennials would rather sit at home playing videogames and texting, and if they do buy a car, they’re likely to opt for something small, preferably with a battery.

As is so often the case, however, the prevailing sentiment is wrong, as several new studies reveal. Not only are Millennials buying cars in ever-larger numbers, but they’re opting for roomy crossovers and sport-utility vehicles, much like their parents.

Crossing Generations!

One likely explanation, according to Chris Travell, a vice president at Maritz Research, is that they want vehicles that can carry more of their stuff.

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Millennials Reshape the Car Buying Process

The American love affair with cars is downsized, not dead, finds new survey.

by on Aug.12, 2014

Despite reports to the contrary, millennials love cars, but when, what and how they buy them is different than earlier generations.

Reports of the death of the American love affair with cars have been greatly exaggerated, especially when it comes to young Millennial buyers, according to a new report – but what Gen Y wants, and how they go car shopping, is very different from prior generations.

Young shoppers, often saddled with debt, are looking for smaller, cheaper vehicles – and they’re far more likely to do their research online, often with their smartphones, according to new research by AutoTrader, the parent company of several major automotive web services.

The Word is "Free"!

“You hear a lot that this generation doesn’t care about cars,” said Isabelle Helms, AutoTrader’s vice president of research, during an appearance at the Detroit Automotive Press Association. “They do care about cars.” (more…)

Gen Y Now Buying More Cars than Gen Xers

Both still behind Baby Boomers in purchases.

by on Jul.31, 2014

A new J.D. Power survey says Millennials may just want to own cars after all. In fact, they are buying new cars in greater numbers than Gen Xers.

While a number of recent studies have suggested that Millennials would prefer to text rather than drive, they’re apparently beginning to buy cars, as well as iPads, in ever-increasing numbers.

In fact, Gen Y now is generating a larger share of U.S. new vehicle sales than older Gen Xers, according to a new survey by J.D. Power and Associates. But both groups still lag well behind Baby Boomers who continue to be the largest group of car buyers in the U.S.

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“As Gen Y consumers enter new life stages, earn higher incomes and grow their families, their ability and desire to acquire new vehicles is increasing,” said Thomas King, a J.D. Power vice president. (more…)

Millennials Skip the Showroom, Ask Facebook Friends for Car Buying Advice

Auto shoppers, in general, count on social media and other online reviews.

by on Jun.10, 2013

Millennials are wedded to the Internet, so no surprise they prefer to car shop online.

When Millennials go car shopping, they’re likely to ask for a little help from their friends – their Facebook friends, that is. The youngest generation of car buyers are far more likely to turn to social media for advice than head for the showroom, according to a new study.

More than nine out of ten Millennials now turn to the Internet when shopping for a new car or truck, according to research conducted on behalf of eBay Motors.  And they aren’t alone. A separate study found that “the majority” of buyers now go online to begin the car buying process – and more than half will be strongly influenced by what their friends have to say on Facebook.

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“It has become increasingly important for dealers to ensure that they are reaching consumers when, where and how they want to shop for vehicles – which today, more than ever, means online and on mobile,” said Kristine Chin, head of motors at eBay Motors.

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Honda Gears Up

Gear Concept makes surprise debut in Montreal.

by on Jan.18, 2013

Honda Gears up for Gen-Y.

Considering the 1000s of journalists and industry leaders who descended upon Detroit this week, one is tempted to forget that things continue to happen in other parts of the industry. Indeed, there were several other significant auto shows occurring this week, some even making a bit of news.

Like the Montreal International Auto Show, where Honda decided to pull the wraps off the new Gear show car rather than bring it to Detroit – perhaps reflecting upon the fact that the Canadian market tends to be more favorable to urban-style minicars despite downsizing trends in the U.S.

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Formally known as the Honda Gear Concept Study Model, the prototype is designed to show that small cars can be more than utilitarian econoboxes. The show car may be “simple and utilitarian,” the maker says, but it is “also customizable, connected and full of personality.”

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That’s Gen-N, as in “Neutral.”

Disinterested young consumers a drag on car sales.

by on Jun.26, 2012

Automakers are struggling to find a way to get Millennials out of neutral with concepts like the Chevrolet Code-130R.

U.S. auto sales are expected to show modest gains for June when the numbers are tallied up, but while the industry may be one of the few bright spots in an otherwise weak recovery, car sales are still lagging almost 3 million units annually below where they were a decade ago.

And a new study suggests that we won’t be seeing those old peaks anytime soon.  But don’t blame the economy, according to AlixPartners, a financial advisory firm based in Detroit. Blame the folks that the firm’s managing partner John Hoffecker calls “Gen-N.” That’s “N,” as in “Neutral about driving.”

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These are “new drivers who are really not even interested in getting a license,” explained Hoffecker.

AlixPartners’ new study echoes other recent research that finds so-called Millennials are far less committed to owning a car than Gen-Xers or, especially Baby Boomers.  They are, in fact, about six times less likely to get a driver’s license during their teens.  And even when they do they are less likely to purchase a vehicle.

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Detroit Makers Still Struggling to Win Young Buyers

But there are some surprises among the brands Millennials want most.

by on Jul.07, 2011

Scion's tC is the most popular model with Millennials.

Conventional wisdom suggests that young buyers will turn away from the products their parents drove – potentially good news for Detroit’s Big Three who collectively lost the big Baby Boom generation to the imports.

New models, such as the Ford Fiesta, are specifically targeting Generation-Y, and the success of those products could determine whether Detroit reverses decades of market share losses, particularly in trendy coastal regions, such as California, where domestic brands account for barely one in four current car sales.  (Click Here to find out which are the most “patriotic” automotive markets.)

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Unfortunately for the Motor City, a new study suggests that while Gen-Y might be turning away from some traditionally strong Japanese marques, like Toyota and Honda, those young buyers are continuing to focus on Asian, rather than American, automakers.

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