The Millennial Impact on The Auto Industry: Ways Millennials Are Changing the Industry

Note: To get a true Generation Y/millennial impact on the automotive industry, our Gen-Y marketing intern, Brad, researched and wrote this article. It talks about millennial car preferences and dispels a lot of myths about marketing to the millennial generation.

Generation Y, better known as the millennial generation (born in 1980-2000), is the first generation to grow up with modern technology and this influences how millennials view cars and car accessories. For this generation, technology is not just another accessory; it is necessity and a way of life.

Millennials find it extremely important to have top of the line technology that can be synchronized between devices. Millennials tend to have a very strong preference when it comes to technology, especially when it comes to buying a new car.

Millennial impact on the auto industry: they drive more miles than previous generations

Millennials spend lots of time in the car, contrary to a lot of reports in the past several years. While exercising and staying healthy is a trend of the millennial generation, the automobile is still their go-to mode of transportation. Not only is the automobile popular with the millennial generation, but it is currently more popular with them than with other generations.

Studies have shown millennials actually drive more miles per month than any other generation, which is why it is very important to most millennials  to have a car they can call their own. Having their own car is so important to this generation that many people would rather give up their phone for a day or a week rather than their car (source: MTV research “Millennials Have Drive“). With a generation built on technology, cell phones have almost become a necessity for most people; however, it seems as though driving may be just as important to this generation. Millennials are not buying a car to just get from point A to B. They are a generation that is concerned about driving safety and having technology that will protect them and their cars.

The MTV study shows millennials drive 72% more miles than baby boomers and 18% more than Gen-X. It also shows about 80% of Gen-Y’ers get around by car.

Millennials want their cars to be personalized

Millennials make up a large portion of current car owners, and will be the main generation of car owners for many years in the future. This being said, it is very important to focus on the millennial generation and to continue to market cars in a way that will draw their interest. Millennials, like stated earlier, are very interested in having unique belongings. They want their cars to match their personality.

They look for interior and exterior accessories for personalization. Simple customizations or car accessories include floor mats, seat covers, dash covers, window tinting, and remote starters.

So what exactly are they looking for? Gen-Y drivers want to be able to completely customize a vehicle of their choice. Being able to completely customize the inside of their cars is most important to millennials. They want to be able to decide between different color schemes and different styles inside the vehicle. Studies show customizing the interior seems to be more important than exterior customization. This is most likely because it is easier and more cost efficient to customize (source: MTV research “Millennials Have Drive“).

Why is customizing so important to millennials? Individuality. Millennials like to express themselves in every way possible. They like to be able to show that they are different than their peers and unique.

Car technologies are important to millennials

Top of the line technology is important for the millennial generation and they like to have quality technology in their cars. However, technologies that enhance the actual driving experience or safety are more important than extra bells and whistles. For example, millennials are interested in blind spot detection, night vision, collision avoidance systems, back-up cameras, and self-healing paint. Millennials are interested in safety and taking care of their car (source: JD Power “2015 U.S. Tech Choice Study“)

They are not as interested in distractions such as touch screens, health and wellness applications, or hand gesture controls. That technology is great but having it in a car is not so great. Implementing these technologies in cars or interior accessories can greatly enhance potential sales.

Millennials impact the auto industry because they want to show their personality

Success is defined in many different ways. Generally speaking, previous generations (Gen-X, baby boomers) defined success as becoming independent. It was defined as the time where you had no reliance on anyone else and could fully support yourself. However, as time has gone on the next generation, the millennials, define success a little bit differently. Millennials do not just want to be independent, they want more. They want to be unique, and individualistic. They want to be different than everyone else and be able to show their own personality. Not only do they want to be unique, they want their belongings to be unique as well.

Ways to market to Gen-Y/millennials

Gen-Y is a tech-savvy generation and needs a different approach to marketing. Pre-purchase digital customization is worth trying. Some Gen-Yers like to be able to completely design their dream car from scratch. They want to be able to design the interior colors, the type of material used, the types of technology in the car, and even how everything in the car is laid out.

We’ve seen other industries take the lead in online customization. Nike, for example–the industry leader in athletic wear–introduced an online shoe customizer. It has become very popular with the millennial generation. Nike customers can completely design their favorite type of Nike shoes, all online, free of cost or negotiations. It’s a great way to get people wanting your product.

The automotive industry and the aftermarket can embrace this. Online customization for automobiles or aftermarket accessories can be a great way to reach millennial buyers.

A few automobile manufacturers, including BMW as well as their Mini brand, and Ford (with the Mustang) have this type of online technology available to customers, and it is giving customers a better chance to see what accessories will be fitting for their new car. Being able to customize a car online without being pressured is how many millennials would prefer shopping.

Millennial car preferences: Gen-Y is brand loyal

Millennials are a very brand loyal generation. When they find a brand that they like they tend to stick with it for a long time. But how do you become one of these brands that millennials are loyal to? There are a few ways to become relevant with the millennial generation. One of the main ways is a strong social media presence.

The majority of millennials are on social media. But just being on social media will not make your brand stick out. It is important to not only be active, but to be engaging with your customers. Having an engaging social media presence where customers can interact with their favorite companies will lead to a better brand relationship, and can create a brand loyal customer.

The millennial generation is also more focused on authenticity over content. This being said, many of the traditional methods of advertising tend to be unsuccessful when trying to reach this generation. Previous generations focused primarily on content of the messages that were being portrayed to them. The millennials focus on the authenticity of the message. They have to first trust the company presenting the message before they actually believe it. Logos are a great way for millennials to tell if a company is authentic or not. Seeing a professional logo that goes along with a quality message will attract the most millennial customers. Remember when you are advertising to Millennials, you are advertising to the most tech savvy generation in history.

What cars do millennials drive?

Insurify looked into the cars millennials drive. The top five were the Honda Accord, Honda Civic, Nissan Altima, Toyota Camry and Toyota Corolla. Traditionally American brands didn’t show up in the top five. Number six on the list was the Chevy Impala, followed by the Chevy Malibu, Ford Focus, the popular Ford F-series pickups, with the Hyundai Elantra wrapping up the top 10.

Millennials have a lot of money to spend

Millennials/Gen-Y have buying power. It is estimated that millennials will have over $10 trillion to spend in their lifetimes, according to Advertising Age magazine. Beginning in 2017, consumers between the ages of 17 and 34 will be spending over $200 billion per year. It is time to start focusing on the most sophisticated, highly educated, demanding, and tech savvy consumers. Millennials are willing to spend more on technology to customizing their car. It is time to focus on this generation. The future of millennials driving is no longer on its way, it’s right here and now.