The rumors are true: Millennials have been slower to enter the car market than previous generations. What with debt worries, the rise of convenience factors like Uber, and a preference for walkable urban living, there’s been much worrying among dealers that millennial buyers would never buy cars.
However, a change seems to be in the offing. In 2016, millennials’ share of the new car market rose to 30%. For the first time, they outpaced baby boomers in car purchases. In a recent study, 80% of millennials indicated that they plan on buying a car in the next five years. In a reversal of long-held marketing wisdom, it’s now estimated that millennials will represent 40% of new car buyers by 2020.
This has left some dealers scrambling to make adjustments in order to seize a portion of this huge generation’s tremendous buying power. What should your marketing message to millennials be? Here are some key areas to focus on that will help you get up to speed and selling cars to the new motoring millennials in no time.
1. Cars are for families.
In an ideal millennial world, one’s daily needs would be available at a walkable distance, and anything else would be in easy public transport range. But the word “ideal” quickly loses meaning to anyone who has kids.
Many millennials are entering the car market when they suddenly have more people and stuff than they can reasonably carry, and too little time to install the car seat in their Uber. Their first car purchase often aligns with moving out of the city into the suburbs, where housing is roomier and more affordable for growing families.
As a result, first-time millennial car buyers are considering cars with more doors and more space than a typical first car. Hatchbacks, sedans and crossovers are always among the most popular cars for millennials, especially now that fuel efficiency has improved in larger vehicles and gas prices are getting lower.
2. Cars are for utility.
Millennials view cars as a tool to make their lives easier, not as a trophy or a status symbol. Therefore, affordability, reliability and gas efficiency are key factors in their buying decisions.
Some luxury carmakers, including Mercedes, BMW and Audi, have introduced lower-priced models in an effort to lure millennials. Establish brand loyalty now, they reason, and reap the benefits of greater buying power in the future.
And since this group values experiences over things, a car can be seen as a way to get to all the experiences they crave. The best automotive marketing takes this insight and runs with it.
3. Cars are for technology.
As digital natives, millennials want their cars to be able to do what their phones can do. GPS systems, smartphone integration that allows their cars’ dashboard to mirror their phones’ screens, and even mobile WiFi are selling points for this generation much more so than for older buyers. But they don’t expect to compromise on cost—so a car that offers cutting-edge technology at an affordable price is right in millennials’ sweet spot.
Millennials are growing up, and their purchasing power and tastes are, too—but that doesn’t mean they’ll turn into Gen Xers or baby boomers. Make sure your marketing efforts take into account the unique way cars fit into their lives and you’re sure to see results.