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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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New Study Challenges Conventional Wisdom About Millennial Motorists

Young drivers are “passionate” about driving after all.

by on Jan.27, 2014

Conventional wisdom says they prefer smartphones but a new study finds Millennials are also "passionate" about their cars.

A new study challenges the conventional wisdom that younger buyers just aren’t all that interested in buying a new vehicle.

They are surprisingly “passionate” about cars – but to get those under 25 into their showrooms, makers must deliver vehicles that stand out from the crowd, contends a study by J.D. Power and Associates.

“This age group really is passionate about vehicle ownership,” says Arianne Walker, senior director, automotive media & marketing at J.D. Power.   “Not only do they enjoy driving but they also see their vehicle as a reflection of their identity.”

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The survey’s findings stand in sharp contrast to what has become conventional wisdom in recent years: that Millennials are more interested in smartphones and other digital technologies than they are in cars.  Another recent study by the University of Michigan Transportation Research Institute found that young buyers are a key reason why there’s been a sharp rise in the number of carless households in the U.S. in recent years.

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Gen-Y May Be Ready to Buy Cars After All

They just don’t have the money, cautions new study.

by on Jan.17, 2014

A new study says Millennials may just want to own cars after all.

It’s become gospel that Gen-Y buyers simply don’t care about cars, that they’re happy to live at home with their parents simply tweeting and texting to friends. But a new study counters that Millennials would be quite happy to get new wheels – if they could afford them.

Though they may not have the emotional attachment to the automobile of prior generations, the report by Deloitte LLP argues that an overwhelming majority of those from Gen-Y still want to own a vehicle.  Only one in 10 told surveyors that they don’t ever plan to lease or buy one.

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“This is good news for carmakers, who already offer — or are bringing to market — many of the features Gen Y consumers most want in a vehicle,” said Masa Hasegawa, one of the principal researchers.

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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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Car Buyers Crave Connectivity

New study finds motorists want connected cars – and also want to shop more online.

by on Mar.26, 2013

Motorists want their cars to deliver the sort of connected technologies they already have in homes, offices and on smartphones.

Automakers who want to connect with their customers have to make sure they offer the latest in connected car technology, according to a new study.

Buyers don’t want to differentiate between what technology they can access behind the wheel from what they already have in their homes, offices – or on their smartphones, according to a report by consulting firm Capgemini.

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That extends to the buying process, the study of 8,000 consumers from eight countries revealed. Buyers are more and more focused on the web when it comes to gathering information on the vehicles they’re likely to buy. And dealers and manufacturers who don’t embrace that – and respond quickly to online shoppers – will likely lose sales.

“Especially for young buyers, this is what pulls them in,” Michael Boruszok, vice president of Capgemini’s automotive practice, tells TheDetroitBureau.com.

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Detroit Makers Gaining Ground, Japanese Losing Momentum with Millenials

Ford takes aim at downsized “super-segment.”

by on Mar.22, 2013

Stylish products, like this Ford Fiesta, targeting a downsized "super-segment" have helped Detroit retake share from the Japanese.

Rob Golden, a Los Angeles-based writer, can’t recall the last time he owned an American car, “unless it’s the Chevy my parents drove when we moved to California when I was 10.” But when it was time for his college graduate son to get his first new car, he opted for a Ford Fiesta, rather than the Toyota Camry or Corolla his father wanted 23-year-old Daniel to buy.

“I just think it’s cooler looking and a lot more fun to drive,” he explains.

The Last Word!

The members of the Golden family aren’t unique.  Baby Boomers by the millions shifted their loyalty to import makers like Toyota, Nissan and Honda over the last four decades. But their children appear to be migrating, in large numbers in the other direction, according to a number of new studies.

“U.S. automakers have burst onto the scene in recent years with small, fuel-efficient and affordable cars that really appeal to a young set of buyers,” says Edmunds.com Senior Analyst Jessica Caldwell.

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Shift to City Living Threatens Auto Industry

Is momentum shifting to mass transit?

by on Jun.28, 2012

More and more young Americans are moving back to cities and skipping the morning commute.

The growth of the U.S. auto industry closely coincided with another dramatic change in the American landscape, the move by tens of millions of Americans from cities to suburbs.

But newly-released U.S. census data show that, for the first time in a century, cities are growing faster than surrounding suburbs.  And that, tied to other demographic and psychographic trends could pose potentially serious challenges to automakers desperately seeking further growth.

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The shift back to urban living is largely being led by the so-called Millennial generation, and research is finding that members of Gen-Y are also far less interested in owning or driving automobiles than those from previous generations who led the tract home migration.

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Millennials Want Hybrids – But May Not Buy Them

Challenges targeting newest generation of buyers.

by on Jan.20, 2012

Chevrolet is testing the interest of Millennial buyers in a pair of concepts, including the Tru 140S.

There’s a big gap between what people say they want and what they’ll actually spend their money on, as automakers are well aware of.  So, the industry is taking a cautious view of a new study by consulting firm Deloitte that finds six of 10 Millennials would like to buy a hybrid or electric vehicles rather than a conventionally powered car, truck or crossover.

That would suggest that manufacturers are positioning themselves well for the wave of young buyers just now entering the market – also known as Gen-Y, the Millennials comprise a cohort of almost 80 million Americans, a group even bigger than the vaunted Baby Boomers that reshaped America over the last half century or so.  Virtually every maker on the market is now offering at least one gas-electric model in its line-up, with an assortment of conventional hybrids, plug-ins and pure battery-electric vehicles, or BEVs, to follow.

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But young drivers aren’t the only ones who say they want to go with the latest, battery-based green technologies.  Some other recent surveys have found that even older Americans routinely say they plan to “consider” a hybrid next time they shop for a new car.  It’s just that those battery-based vehicles usually don’t make the cut, in the end.  Last year, hybrids actually slipped as a percentage of the overall U.S. market to barely 2%.  Total sales of all battery-based vehicles barely matched demand for the Honda Accord.

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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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