Millennials a Probable Key for Auto Industry Recovery

Much of the economy has retracted during the coronavirus pandemic, auto sales included. The forecasts aren’t pretty with NADA predicting that new light-vehicle sales will total 13 million to 13.5 million in 2020, down from the original forecast of 16.8 million units.

Looking forward, however, isn’t all bad news. It’s been well documented that the COVID-19 disease is less serious, overall, if contracted by younger generations, especially those 30 and under. Fatality rates in those 30 and under are reportedly around 0.2% from China’s reports. Symptoms are less severe on average and recovery times quicker.

Coinciding with that data is a report from global advisory firm Duff & Phelps stating that an aversion to car ownership among millennials has been greatly overstated. The millennial generation is positioned to be a key demographic for automotive sales recovery. 

What the Report Highlights

Three main points are emphasized in the Duff & Phelps Millennials and Auto Trends report. This generation that’s been touted as the pivot from traditional car ownership to shared mobility and alternative transportation isn’t as different from Gen Xers as first thought. 

• Around three in four millennials surveyed expected to be in the market for a new car in the next five years, either leasing or purchasing. 
• Independence and convenience were identified as highly-valued factors for owning a car. 
• Vehicles powered by petroleum products remain the most preferred globally, although hybrid and electric-powered vehicles may overtake in the next few years. 

What it Means for Dealers

For car dealers, this news can help shape business when we emerge from the pandemic response. It appears that the stay-at-home orders will likely be lifted in stages, beginning with the less vulnerable younger populations. These millennials, Xennials, and Gen Zers will probably be the first potential customers through the doors. Here’s what you can do. 

Mine Data Today

Marketing and social exposure should not take a break during this time. In fact, the opposite would be true. Consistently putting your message and product in front of the right eyes is the aim.

Dealers can mine data from previous buyers and prospects to accurately target millennials. Facebook continues to be a popular media source for millennials, although email marketing is more direct and engaging. 

Create Relationships

While on lockdown, the aim isn’t necessarily to sell. Rather, the goal is to gain recognition among the consumer base. Become an authority. Establish a following based on the people and business first, then the products after.

If you can begin to create relationships prior to the sale, even if you never meet the prospect in person, it’s much more likely you’ll close the deal when they reach that point in the sales funnel. 

Carry the Right Inventory

Millennials may be more interested in car ownership than originally thought, but the aspect of social responsibility is still a major influence. A diverse range of models and trim levels is necessary, however, leaning more toward fuel efficient, environmentally responsible manufacturing, and innovation will be important. Think about models and trims that offer ‘vegan’ interiors and EV or hybrid technology especially.

Note that it’s not the millennials that bear the burden solely for invigorating the auto industry after COVID-19 restrictions are lifted. They’re just one piece of the puzzle, albeit an important and initial piece. 

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Car Biz Today, the official resource of the retail automotive industry.