“Current economic influences and automotive market conditions have increased barriers for Gen Z and Millennials looking to purchase a new or used vehicle. Moving forward, it will be critical for auto brands and retailers to understand the varying needs across younger generations as well as the physical and digital touchpoints they lean on to best reach and resonate with those interested in purchasing in both the short and long term.”
– Gabe Sanchez, Automotive Analyst
This report discusses the following key topics:
- Vehicle ownership and purchasing timeline
- Important factors influencing interest in auto brands
- New vehicle discovery sources
- Brand consideration
- Top concerns when buying a car
- Interest in car features for next vehicle
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Overview
- What you need to know
- This Report looks at the following areas among Gen Z and Millennials
- Definition
- Market context
- What you need to know
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Executive Summary
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- Top takeaways
- Consumer trends
- Millennials are the most interested in purchasing in the short term
- Figure 1: Purchase timeline, by generation, 2022
- Millennials are influenced by more factors
- Figure 2: Important factors, by generation, 2022
- Younger consumers learn about new vehicles from a variety of sources
- Figure 3: Learning sources, by generation, 2022
- Brands with reputations of reliability, value are most considered
- Figure 4: Brand consideration – Would consider, by generation, 2022
- Affordability is a primary concern among Gen Z consumers
- Figure 5: Top concerns, by generation, 2022
- Millennials seek more as part of their investment
- Figure 6: Next car features, by generation, 2022
- Competitive strategies
- Auto brands leverage heritage to drive interest in electric vehicle offerings
- Figure 7: Chevy Silverado “A whole new truck for a whole new generation”
- Honda, Sony partner to develop Afeela
- Figure 8: Sony showcases the Afeela on social media
- GM partners with Netflix for in-show placements
- Figure 9: General Motors showcases partnership with Netflix
- Mercedes-Benz and TikTok drive in-car entertainment
- Figure 10: Mercedes-Benz partners with TikTok for in-car entertainment
- Automakers look to reach consumers through their pets
- Figure 11: Subaru highlights “dog tested, dog approved”
- GM and Activision partner to drive engagement among younger consumers
- Figure 12: GMC highlights its “Call of Duty” integration
- Market predictions
- Figure 13: Automotive industry outlook, 2023-28
- Opportunities
- Partner with financial institutions or apps to guide younger consumers by their budget
- Drive interest by offering month-to-month subscription programs
- Create experiences beyond the car to improve perceptions and consideration
- Continue to educate consumers on electric offerings
- Continue to promote sustainability efforts, beyond electrified models
- Partner, develop car sharing platforms
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Market Drivers
- Gen Z, Millennial consumers grow to make up a larger portion of the population
- Figure 14: Population, by generation, 2017-27
- Consumer confidence is increasing, but remains supressed – driving younger consumers’ consideration of budgets
- Figure 15: Consumer Sentiment Index and unemployment, 2000-23
- Cost of new and used cars remains elevated, raising barriers for younger consumers
- Figure 16: Consumer Price Index, new vehicles and used vehicles – Seasonally adjusted, 2018-23
- Gas prices present a potential to further affordability concerns among younger consumers
- Figure 17: US gasoline and diesel retail prices, 2007-23
- Gen Z, Millennial consumers grow to make up a larger portion of the population
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Competitive Strategies and Market Opportunities
- Leverage heritage to drive interest in electric vehicle offerings
- Figure 18: Chevy Silverado “A whole new truck for a whole new generation”
- Honda partners with Sony to develop electric offerings
- Figure 19: Sony showcases the Afeela on social media
- GM partners with Netflix for in-show placements
- The opportunity: leverage entertainment to reach interested consumer segments
- Figure 20: General Motors showcases partnership with Netflix
- Mercedes-Benz and TikTok partner to bring in-car entertainment
- The opportunity: provide unique in-car entertainment for drivers, passengers to differentiate from competitors
- Figure 21: Mercedes-Benz partners with TikTok for in-car entertainment
- Automakers highlight pet ownership
- The opportunity: highlight life with a pet to resonate with younger consumers
- Figure 22: Subaru highlights “dog tested, dog approved”
- GM and Activision partner to drive engagement among younger consumers
- The opportunity: leverage video games to drive awareness among younger consumers
- Figure 23: GMC highlights its “Call of Duty” integration
- Leverage heritage to drive interest in electric vehicle offerings
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The Gen Z and Millennial Consumer – Fast Facts
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Ownership and Purchase Timeline
- Most younger consumers have access to at least one vehicle
- Figure 24: Household vehicle ownership, by generation, 2022
- Younger consumers own sedans, despite some automakers’ shift
- Figure 25: Car type ownership, by generation, 2022
- Millennials are still the most active car buyers in the short and long term
- Figure 26: Purchase time line, by generation, 2022
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- Figure 27: Vehicle type consideration, by generation, 2022
- Multicultural consumers indicate limited access, but strong interest in purchasing
- Figure 28: Household vehicle ownership, by race and Hispanic origin, 2022
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- Figure 29: Purchase time line, by race and Hispanic origin, 2022
- Most younger consumers have access to at least one vehicle
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Important Factors
- Millennials lean on experience; Gen Z look for guidance
- : Figure 30: Mercedes-Benz highlights a commitment to recycled materials
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- Figure 31: Important factors, by generation, 2022
- Female consumers are most driven by tangible factors
- Figure 32: Ford launches “Built Ford Proud” campaign
- Figure 33: Important factors, by gender, 2022
- Parents are influenced by multiple factors; indicate emphasis on safety
- Figure 34: Important factors, by parental status, 2022
- Millennials lean on experience; Gen Z look for guidance
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Sources of Learning
- Social media, friends and family are primary avenues of discovery
- Figure 35: Nissan launches #HowdoyousayAryia campaign to spread awareness
- Figure 36: Learning sources, by generation, 2022
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- Figure 37: Social platforms of discovery, by generation, 2022
- Female consumers lean on friends and family, experts
- Figure 38: Learning sources, by gender, 2022
- Young multicultural consumers learn about new vehicles across multiple channels, new opportunities emerge
- Figure 39: Audi presents: Janelle Monae & the Audi RS e-tron GT
- Figure 40: GMC Hummer EV leverages Lebron James
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- Figure 41: General Motors advertises their partnership during the super bowl
- Figure 42: Learning sources, by race and Hispanic origin, 2022
- Social media, friends and family are primary avenues of discovery
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Brand Consideration
- Toyota, Honda lead across younger consumers
- Figure 43: Brand consideration – Would consider, by generation, 2022
- Multicultural Gen Z and Millennials consider various brands
- Figure 44: Nissan aims to empower black creatives
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- Figure 45: Toyota highlights the Corolla Cross, Hispanic creatives
- Figure 46: Toyota highlights the Toyota Tundra, Hispanic creatives
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- Figure 47: Brand consideration – Would consider, by race and Hispanic origin, 2022
- Toyota, Honda stand out among younger LGBTQ+ consumers
- Figure 48: Subaru highlights its dining out for life partnership
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- Figure 49: Hyundai highlights the LGBTQ+ community
- Figure 50: Brand consideration – Would consider, by LGBTQ+ status, 2022
- Toyota, Honda lead across younger consumers
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Concerns When Buying a Car
- Gen Z consumers keep affordability in mind
- Figure 51: Hyundai features the lifetime of its vehicle
- Figure 52: Nissan highlights comfortability, space for dogs
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- Figure 53: Top concerns when buying a car, by generation, 2022
- Female consumers are most concerned with their budgets
- Figure 54: Top concerns, by gender, 2022
- Multicultural consumers concerned with value
- Figure 55: Top concerns, by race and Hispanic origin, 2022
- Gen Z consumers keep affordability in mind
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Next Car Features
- Millennials seek more
- Figure 56: Next car features, by generation, 2022
- Women indicate an interest in safety
- Figure 57: Mercedes-Benz highlights a commitment to equality though safety
- Figure 58: Next car features, by gender, 2022
- Income drives an interest in certain features
- Figure 59: Jeep highlights the Grand Wagoneer entertainment system
- Figure 60: Next car features, by household income, 2022
- Millennials seek more
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Appendix – Data Sources and Abbreviations
- Data sources
- Consumer survey data
- Abbreviations and terms
- Abbreviations
- Data sources
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