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Marketing Auto to Gen Z and Millennials: Inc Impact of COVID-19 - US - May 2020

OVERVIEW
What you need to know
Key issues covered in this Report
Definition
EXECUTIVE SUMMARY 
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
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
What you need to know
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
Figure 3: Number of vehicles in household, February 2020
Mintel’s Global Consumer Trend Drivers
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
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
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
Figure 7: Consumer spending on new vehicles, monthly, 2006-10
Figure 8: Consumer spending on new vehicles, annual, 2000-19 and Q1 2020
Used Vehicles
Figure 9: Consumer spending on used vehicles, monthly, 2006-10
COVID-19: US context
THE MARKET – WHAT YOU NEED TO KNOW
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
US auto sales expected to take a significant hit
Figure 10: US Auto sales by brand performance, April 2020
Young, conscious consumers will mature into their purchasing power
Figure 11: Population by generation, 2014-2024
Low median incomes leave little room for discretionary spending
Figure 12: Median household income, by age of householder, 2017
MARKET FACTORS
Unemployment numbers pile up as COVID-19 related layoffs continue
Figure 13: Unemployment and underemployment, January 2007- March 2020
CONSUMER TRENDS
Return to experts
Redefining Adulthood
THE FOUR PILLARS OF MILLENNIAL & GEN Z LOYALTY
Trust
Transparency
Understanding
Reliability
THE CONSUMER – WHAT YOU NEED TO KNOW 
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
Most young consumers have access to a vehicle in household
Figure 14: Number of vehicles in household, February 2020
Sedans are stayin’ alive thanks to younger consumers
Figure 15: Most popular vehicles in household, February 2020
Affordability largely affects vehicle ownership
Figure 16: Hyundai, Unpredictable Hyundai Assurance Ad, March 2020
Figure 17: Reasons for not having a vehicle, February 2020
CAR PURCHASING TIMELINE
Gen Z and Millennial consumers have a more immediate need for a car
Figure 18: Future vehicle purchase timeline, February 2020
VEHICLE RESEARCH METHODS
Media spend is crucial for new vehicle awareness
Figure 19: Methods of new vehicle research, February 2020
Gen Z car buyers are scoping out your social channels
Figure 20: 30 Rock, How do you do, fellow kids meme, July 2017
Figure 21: Utilization of social media for new vehicle research, by generation, February 2020
PURCHASING BEHAVIORS
Millennials want newer cars; Gen Z consumers could go either way
Figure 22: Top concerns surrounding next vehicle purchase, by generation, February 2020
YOUNG CONSUMERS VEHICLE WANTS AND NEEDS
OEMs need to alleviate budget concerns for young car buyers
Figure 23: Top concerns surrounding next vehicle purchase, by generation, February 2020
Safety features take precedence over fun vehicle tech
Figure 24: Top vehicle features, February 2020
MY DREAM CAR…
Figure 25: Top vehicle features, February 2020
James Bond’s Aston Martin
Batman’s Batmobile
The Jetsons Flying Car
Bumblebee’s Camaro
APPENDIX – DATA SOURCES AND ABBREVIATIONS
Data sources
Sales data
Fan chart forecast
Consumer survey data
Direct marketing creative
Abbreviations and terms
Abbreviations

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