Statistics are curious and often contradictory things. That's doubly so when they reveal shopping habits, because shoppers are curious and contradictory creatures.
For example, we've heard time and again that even if Millennials (aka "Generation Y") could afford to buy cars, they wouldn't flock to showrooms, because they have other priorities.
We've also heard that Baby Boomers and their elder siblings (aka "The Silent Generation") are fueling today's auto-buying blitz.
But research powerhouse GfK has just published a study showing that, even though Millennials aren't buying many new cars right now, a growing number of them intend to do so within the next 12 months.
And when they do venture onto the lots, Millennials are more likely than any other demographic to look at small cars. That's not because those cars are often (though not always) more fuel efficient than larger models, but because they're fun to drive, safe, packed with technology, and make them feel successful.
Here are the biggest takeaways from the GfK study:
- In 2008, Millennials made up just 16% of new-vehicle "intenders". Recently, that number has risen to 24%.
- Millennials, combined with their older brothers and sisters in Generation X, currently account for 63% of new-vehicle intenders. That's interesting/odd, since back in May, J.D. Power reported that nearly 63% of U.S. car sales were carried out by buyers 50 and older, while Millennials accounted for just 13%.
- According to GfK, 29% of Millennials plan to buy small cars, compared to 19% of Gen Xers and 19% of Baby Boomers.
- Though other surveys have shown that fuel economy is the #1 criteria for today's car shoppers, to Millennials, it's no big deal -- even now, as gas prices continue to climb. What's most important to them is dependability, whether the car is one they're "proud to own", and the quality of the vehicle's workmanship. Fuel efficiency shows up way down the list, at #13 out of 21.
- Contrary to what we've heard, high-tech features don't seem outrageously important for Millennials, either. In fact, technology sits at #12 on the list.
Our take
So, what have we learned today?
For starters, it would seem that car-buying intentions don't always translate into sales. It's possible -- even inevitable -- that Millennials will begin to play a bigger role in the U.S. auto market. But to go from 13% of purchases (based on J.D. Power's sales data) to 24% (based on GfK's intenders) in a single year? That sounds a little unlikely.
The Millennial obsession with small vehicles, however, doesn't surprise us. Younger drivers are less likely to have big families to haul around, so it's logical that more of them would lean toward sporty compacts and subcompacts like the Ford Fiesta, the Mazda Miata -- even the Smart fortwo. In contrast, we're always a little surprised to see older drivers behind the wheels of those vehicles. (Though we shouldn't be: empty-nesters don't have big families to haul around either).
Millennials' lack of interest in fuel efficiency is a bit of stumbling block, though. You might expect a generation known for being un- and under-employed to be keenly aware of cost-of-ownership issues like fuel economy. Their siblings in Generation X are paying attention -- mpg ranks at #9 on their list of criteria, and it's the 11th most important factor for Baby Boomers.
Maybe we just have to chalk that one up to inexperience. Or maybe Millennials blithely assume that all those small cars they're looking at naturally come with great fuel economy.
If you've got some thoughts on this consumer conundrum, feel free to drop us a line, or share them in the comments below.
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