The mobility landscape has seen a lot of changes in the past few years which has given consumers more options when it comes to meeting their transportation needs. This has resulted in a shift in consumer demands which has had an impact in how automotive companies design their products and how they engage potential customers.
In order to predict trends for 2020 we have to account for the values, needs and tastes of three generations: Baby Boomers, Gen X and Gen Y (Millennials). This is already a broad demographic, not taking into account the cultural differences that will impact sales in different countries of the world.
The latest studies in the automotive industries focus on the changing nature of mobility. Automation, alternative powertrains, connected vehicle technologies and the greater variety in sales channels will inevitably impact transportation choices and car sales.
Newer Second-Hand Cars
Since millennials account for a large share of the market, naturally they have had an impact on sales. First of all, they seem to prefer taking public transportation or use ride-sharing apps when possible. They seem to view owning a car as a hassle and will only get one when changes in their life make it necessary. The car is no longer seen as a status symbol. This has increased sales for newer second-hand cars. The market for new cars has been going through a steady decline in the past years, while the used car market has risen.
It was previously thought that it was because of changing views over the environmental impact of owning and driving a car, but it seems that it’s mostly because of economical factors influencing buyer decisions. At the same time, the used car market has changed and is now perceived as more transparent and trustworthy, with an increasing number of online dealerships offering instant car valuation and varied financing options.
Millennials Do a Lot More Research Before Purchasing a Car Than Previous Generations
The average millennial spends about 18 hours researching different car models and dealerships before they even set foot in one. This has motivated the automotive industry to focus their advertising campaigns in the digital realm. Video ads remain the most effective, but they have shifted from TV to social media. A clever video ad with exciting chase music might get their attention and prompt them to look into a brand or car model, but be sure they’ll be checking everything and reading hundreds of reviews and articles. Word of mouth from family and friends remains a trusted source but this is now coupled with extensive examination of the brand’s or dealership’s reputation and trustworthiness.
Studies show that 75% of millennials, when visiting a lot, end up buying the same model they wanted in the first place, no matter what the car dealer recommended. 80% of them also report they would like the purchasing process to go faster and think there’s should be more transparency in regards to pricing.
Manual Transmission Is Being Phased Out
This has already been going on for over a decade. Although passing your driving test in a manual car is almost a rite of passage, once they buy their own car, most people, especially the younger generations seem to prefer automatic transmission.
There aren’t even that many options for cars with manual transmission anymore and in a few more years, we might see them disappear completely. Automatic cars are nowadays not only easier to drive, they’ve become more efficient in fuel consumption and cheaper.
Most young drivers are not very proficient in operating a clutch, nor are they particularly inclined to learn. They would rather have the type of transmission they don’t need to think about.
Drivers from all three generations remain interested in safety features like blind spot detection, cornering headlight systems and rear-vision camera systems.
Although older generations are reluctant to the introduction of autonomous vehicles on the market, millennials are more open to the idea as they see technologies which can detect other cars on the road, that can let them know when they’re exceeding the speed limit and prevent them from engaging in potentially dangerous driving situations as additional safety features.
On top of that, millennials would also like the vehicle’s technology to be easier to customize after purchase or lease, and better compatibility with their smartphones so they can use more of their applications on the car’s dashboard interface.
Quality and Reliability
These have always been important factors, but since millennials do so much research before purchasing, they’re particularly interested in how often a car model needs repairs, what is the average maintenance cost and how expensive it is to replace its parts.
If a brand or a car model has an online reputation of being unreliable, meaning it requires a lot of repairs and the parts are expensive, they’ll be a lot less likely to buy it because they’re afraid this will end up costing them more than they bargained for and, since they buy cars mostly out of necessity, they want to get the best output for their investment.