The automotive industry is a major economic force globally and, according to the American Automotive Policy Council, is the largest manufacturing sector in the U.S. As sales in the space continue to slow due to a variety of factors, like rising auto loan rates and overall economic uncertainty, it is more important than ever that those in the auto industry understand their consumers.
Many millennials are content to treat their vehicle as just another household appliance that doesn’t need to speak for them or reflect their personality and values.
Earlier this year, Alter Agents surveyed 1,094 recent purchasers of new vehicles to ask about their shopping attitudes and behaviors in the automotive category. Among new car buyers, younger drivers are replacing their vehicles much more often. In fact, 48% of drivers under the age of 40 are buying new vehicles every two years, while only 27% of those over 40 are doing so.
Those younger drivers have other unique behaviors of which the automotive industry should take note. Younger drivers are less locked into a particular brand or model, less satisfied with the options that they have, and more excited to try something new. In fact, 55% of those under 40 say that they enjoy trying new brands of cars. This places this category of drivers in what we call “promiscuous shoppers,” those shoppers who are less brand-loyal and more likely to experiment with new brands.
We chose to dive a little deeper into this important consumer segment and try to understand consumers’ most basic emotional reactions to brands. To accomplish this, we gave them a few seconds to tell us whether they liked each major automotive brand. Among younger consumers, the preference was much higher for Tesla, Audi, Hyundai, and BMW than their older counterparts.
Drivers over 40 were more emotionally invested in their car choices. They have stronger opinions about what they like and don’t like, and they’re more likely to believe their car choices reflect their personalities. Overall, younger car buyers are less invested in brand loyalty than their older counterparts. This finding stands in stark contrast to common tropes about millennials, particularly that they’re seeking deep and meaningful emotional connections with brands.
Instead, younger consumers’ interest in an emotional connection is mediated by category, just as it is for older shoppers. Among older shoppers, who may have grown up in an American youth culture focused on cars, today’s younger shoppers simply don’t share that emotional connection to their vehicle, having grown up in a culture more focused on digital connectivity than physical mobility. While millennials may crave authentic experiences in some categories that they care about, this doesn’t seem to carry over to automobile shopping. Many millennials are content to treat their vehicle as just another household appliance that doesn’t need to speak for them or reflect their personality and values.
Experts are saying that the automotive industry is slowing faster than expected this year, and this trend will continue as we enter 2021. Understanding the differences in target audiences, their feelings about brand, loyalty, preferences and shopping habits is vital for success. Too much of the conversation about car buying has focused on an imagined idea of what younger consumers look like. While younger car customers differ from older consumers, these differences don’t necessarily line up with conventional wisdom around millennials. Beyond automotive, these counterintuitive findings demonstrate the importance of grounding research in a specific category and type of purchase, which can reveal new and unexpected things about the customers you’re trying to reach.
Mike Dickerson is a senior research manager at Los Angeles based market research consultancy, Alter Agents.
Originally posted on F&I and Showroom