June 3, 2013 at 12:55 PM ET
While automakers may be focusing on the next generation of potential buyers, they shouldn’t forget about the middle-aged motorists key to the industry’s recovery, according to a new study.
Millennials may someday be the dominant buying group, but for now, Baby Boomers are nearly 15 times more likely to buy a new car, truck or crossover, reports the University of Michigan Transportation Research Institute, or UMTRI.
"The probability of buying a vehicle per driver is highest for people between 55 and 64 years of age," lead researcher Michael Sivak said. "That is probably surprising to many people because they think of much younger people being the target audience."
As for Gen-X, they’re also taking a back seat to Boomers, according to UMTRI. They accounted for 29 percent of U.S. new vehicle purchases as recently as 2007 but dipped to 22 percent by 2011. On the other hand, buyers ages 55 to 64 saw their share of the new vehicle market surge to 23 percent from 18 percent during the same period.
The numbers may surprise those in automotive marketing and advertising who have fixed their sights on Millennials. A growing share of industry dollars targets them through social media outlets such as Facebook.
As for why Generations X and Y aren’t a more significant buying force, researchers point to several factors. Younger consumers were particularly hard hit by the deep U.S. recession, and employment among Millennials still lags behind the overall American workforce.
Meanwhile, another recent study by the University of Michigan found that some Millennials are delaying getting their driver’s licenses. Fewer than 70 percent of 19-year-olds surveyed last year had obtained a license, the lowest figure in nearly three decades.
“The big question,” researcher Sivak said, is whether this trend will persist.
There are several trends that should give pause to automotive planners. Whether by choice or because of finances, the number of American households without a car has doubled in the last two decades and is now approaching 10 percent, according to a separate study by CNW Marketing released last month.
Noting that this figure has increased from 5.7 percent in 1991, CNW research director Art Spinella said, “While the recession was in large part responsible for the latest spurt, the trend was already clear: A growing number of Americans felt they didn’t need or want a personal car.”
The numbers reflect a growing shift toward urban living among Millennials, many of whom find they can fill the occasional need for a car through a car-sharing service.
CNW research found that Baby Boomers have also become a part of the car-less trend, especially among those who live in retirement communities where vehicles may not be necessary.
Nonetheless, Boomers still are driving the auto industry and are likely to do so for some time, most researchers say. The numbers speak for themselves: One in 222 Americans between 18 and 24 purchased a new vehicle in 2011. By contrast, 1 in 15 Boomers bought new cars that year.
That, Sivak and other analysts say, should have industry marketers thinking twice about their ad strategies. Then again, the old adage may hold true that it’s easier to sell a young man’s car to an older motorist than vice versa.
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