Maybe younger people want cars, after all. That would go against what has become the official word on Millennials and cars: they'd rather spend on something they can put in their pocket. The decline in recent years of the percentage of owners under 30 seems to support that: under-30's were 10% of the market in 2007 and 8% last year, per Tustin, Calif.-based market research firm Strategic Vision.
The firm's own research says that the main reason for the decline, however, is pecuniary: they want cars, but can't afford them, especially post-recession. "They are also on track to have a lower standard of living than their parents," says the firm in a new report, which notes that big student debt and lower income mean wheels are likely to be of the used variety.
The research company's report -- which parses data from its New Vehicle Experience Study and segments Gen Y into under-20 year olds, 20-24 and those ages 25-29 -- says the Civic car and Toyota brand lead among Gen Y buyers for perceived reliability; Nissan leads for perceived individuality; and VW and Chevrolet for "fun." Honda Civic Sedan has the most market share, at 4.9%, among Gen Y consumers, followed by the Jetta sedan, Mazda3, Toyota Corolla and Altima, per the firm.
Strategic Vision says females are 59% of Gen Y new-vehicle buyers; that only 3% of Gen Y buyers under 20 are married; and that the top four new-car markets for under-20 married buyers are San Francisco, Los Angeles, Sacramento and (oddly) Youngstown, Ohio, and that most under-20 buyers are students. Also, 11% of Gen Y buyers between 20 and 24 years of age classify themselves as Hispanic.
The company says its data also shows that Gen Y new-car buyers over-index for affinity for vehicles that show success in life/career; reflects curiosity and openness to experiences; and makes them look good while driving. They also are more likely to say that while price is most important; they prefer a vehicle that can outperform others. They under-index for wanting basic, no-frills vehicles and base-model cars.
The study points out that while Gen Y market share enjoyed by U.S. volume-leaders Honda, Nissan, Chevrolet, Toyota, Hyundai and Volkswagen parallels their general market share, certain automakers with smaller general market share over-index among Gen Y. These, not surprisingly, are brands with strong personae, a certain niche appeal and a certain amount of equity around personalization/customization: Subaru, Scion, Mazda. And this list includes aspirational brands like Jaguar, Porsche, Audi and Land Rover, which puts the three mass brands in good company.
The bottom line for Millennials is the value proposition, per the firm. "Value is what you receive in exchange for what you sacrifice. As the perceived value increases, so does the love that a first-time car buyer has for his vehicle." The report says Millennials expect a quality vehicle that can deliver them a sense of security for the amount that they are able to spend. It's better, says the report, to do attractive financing, warranty, or service packages work in lieu of low price if low price means sacrificing vehicle quality. "One significant point for manufacturers to recognize is that younger buyers become more loyal over time as they gain more experience. Give them a good deal, and they will return."