Table of Contents
Executive Summary
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- What automakers and car dealers need to know
- Pandemic or not, vehicle affordability is a main concern
- Safety features, not tech, are “must-haves” for young consumers
- Where automakers and car dealers can succeed
- Digitize the car purchasing process to meet current and future consumer demands
- Market overview
- Impact of COVID-19 on Gen Z and Millennial Auto Consumers
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- Figure 1: Short-, medium- and longer-term impact of COVID-19 on the Auto Industry, May 2020
- What’s next?
The Impact of COVID-19 on Gen Z and Millennial Auto Consumers
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- What you need to know
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- Figure 2: Short-, medium- and longer-term impact of COVID-19 on the Auto Industry, May 2020
- Opportunities and threats
- Short-term COVID-19 impact: Young consumers will split into two shopping groups
- Financially burdened young consumers will shift toward sedans
- Used vehicles might suffer from perception of being “unsanitary”
- Prioritizing the digital showroom
- Millennial parents will continue to buy cars as they seek advanced safety features
- Gen Z and Millennial consumers widely have access to a vehicle in their households
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- Figure 3: Number of vehicles in household, February 2020
- Mintel’s Global Consumer Trend Drivers
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- Figure 4: Mintel Trends Drivers
- Impact of COVID-19 on the auto market
- US auto sales expected to take a significant hit in the short term
- Young consumers will delay routine auto repairs in the immediate future; longer-term COVID-19 affects will be a boon to service and maintenance providers
- Oil prices are negative, but consumers largely can’t enjoy the benefit
- Automakers can utilize PSAs and “crisis” advertising to help the fight against COVID-19
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- Figure 5: Mazda, Rules for the Road Ahead, March 2020
- How the crisis will affect the auto industry’s key consumer segments
- Gen Z
- Millennials
- Personal vehicles can be reframed as “self-care”
- Automakers are going to have become more human
- How a COVID-19 recession will reshape the auto industry
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- Figure 6: Unemployment and underemployment, January 2007-April 2020
- COVID-19’s impact on longer-term auto sales will be bleak but won’t cause irreparable damage
- Then and now: a look at America’s recessions
- New Vehicles
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- Figure 7: Consumer spending on new vehicles, monthly, 2006-10
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- Figure 8: Consumer spending on new vehicles, annual, 2000-19 and Q1 2020
- Used Vehicles
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- Figure 9: Consumer spending on used vehicles, monthly, 2006-10
- COVID-19: US context
The Market – What You Need to Know
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- US auto sales drop 47% in one month
- Young consumers will mature into their buying power
- Young consumers are less likely to have “fun money” at the end of the month
Market Breakdown
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- US auto sales expected to take a significant hit
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- Figure 10: US Auto sales by brand performance, April 2020
- Young, conscious consumers will mature into their purchasing power
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- Figure 11: Population by generation, 2014-2024
- Low median incomes leave little room for discretionary spending
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- Figure 12: Median household income, by age of householder, 2017
Market Factors
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- Unemployment numbers pile up as COVID-19 related layoffs continue
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- Figure 13: Unemployment and underemployment, January 2007- March 2020
Consumer Trends
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- Return to experts
- Redefining Adulthood
The Four Pillars of Millennial & Gen Z Loyalty
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- Trust
- Transparency
- Understanding
- Reliability
The Consumer – What You Need to Know
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- Vehicle ownership is common among young consumers
- Gen Z and Millennials have the most immediate need for a vehicle
- Media spend drives awareness
- Vehicle affordability keeps young consumers up at night
- Safety trumps tech when it comes to vehicle features
Ownership
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- Most young consumers have access to a vehicle in household
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- Figure 14: Number of vehicles in household, February 2020
- Sedans are stayin’ alive thanks to younger consumers
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- Figure 15: Most popular vehicles in household, February 2020
- Affordability largely affects vehicle ownership
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- Figure 16: Hyundai, Unpredictable Hyundai Assurance Ad, March 2020
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- Figure 17: Reasons for not having a vehicle, February 2020
Car Purchasing Timeline
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- Gen Z and Millennial consumers have a more immediate need for a car
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- Figure 18: Future vehicle purchase timeline, February 2020
Vehicle Research Methods
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- Media spend is crucial for new vehicle awareness
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- Figure 19: Methods of new vehicle research, February 2020
- Gen Z car buyers are scoping out your social channels
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- Figure 20: 30 Rock, How do you do, fellow kids meme, July 2017
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- Figure 21: Utilization of social media for new vehicle research, by generation, February 2020
Purchasing Behaviors
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- Millennials want newer cars; Gen Z consumers could go either way
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- Figure 22: Top concerns surrounding next vehicle purchase, by generation, February 2020
Young Consumers Vehicle Wants and Needs
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- OEMs need to alleviate budget concerns for young car buyers
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- Figure 23: Top concerns surrounding next vehicle purchase, by generation, February 2020
- Safety features take precedence over fun vehicle tech
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- Figure 24: Top vehicle features, February 2020
My Dream Car…
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- Figure 25: Top vehicle features, February 2020
- James Bond’s Aston Martin
- Batman’s Batmobile
- The Jetsons Flying Car
- Bumblebee’s Camaro
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Appendix – Data Sources and Abbreviations
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- Data sources
- Sales data
- Fan chart forecast
- Consumer survey data
- Direct marketing creative
- Abbreviations and terms
- Abbreviations
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