Rarely since the advent of the Model T has the automotive industry been forced to undergo a shift in strategy like the one that has been precipitated by two significant forces: an increasingly volatile global economy, and the growing influence of Generation Y, or Millennials.
A report by automotive data and marketing solutions leader R.L. Polk notes that the number of years Americans who now own their motor vehicles – specifically cars and trucks – has hit a record high of 71 months for vehicles purchased new and an all-time high of 50 months for vehicles purchased used. Another corollary trend shows the average age of vehicles on the road also is on the rise at 10.8 years as of July 2011.
There are several factors that are likely driving these trends, including the continuing weak job market and high unemployment rates. Also, many consumers are now financing their vehicles for longer periods of time to keep their monthly payments at more affordable levels.
This news comes at a time when the auto industry is riding a new technology wave that has accelerated so much in the past three years that for consumers, buying a vehicle is becoming similar to what buying a computer was like a decade ago – or what buying smart phones is like today, according to Automotive News. Whatever vehicle a consumer chooses likely will be replaced by something newer and better before they’ve finished paying for it. Perhaps it is this renewed thinking by the auto industry that will subsequently help draw Millennials into showrooms.
The fact is that right now, Millennials just don’t care as much as their parents or grandparents about cars. This is a major shift from the days when the car stood at the center of youth culture and having wheels served as the ultimate gateway to freedom and independence, as the New York Times reported earlier this year. Instead, Facebook, Twitter, texting and social gaming allows Millennials to connect today without bumper stickers, ear-splitting sound systems or tricked-out rims. Supporting this sentiment is data from the research firm Gartner: 46 percent of drivers aged 18 to 24 said they would choose Internet access over owning a car.
So, what can auto manufacturers and marketers do to: a) stem the tide of a down economy, and b) erode apathy among Millennials?
For one, they need to focus more on creating a new experience in automotive parts stores and dealer repair shops to better serve car owners who frequent these outlets. Also, extended warranty providers will most likely find new customers who desire peace of mind in retaining their vehicles past the expiration date of manufacturers’ warranties.
To entice Millennials, perhaps they should think more like a green technology company in creating and marketing cars that integrate the driving experience cutting edge consumer technology platforms and services such as connectivity applications that are ecologically-friendly and enable drivers to use social networking and web-based services on a 24/7 basis so that eventually, no matter where one goes, they will be fully connected.
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