Description

“Young consumers are a mysterious, fickle group; or at least that’s how they’ve been portrayed. Depending on the industry and who you ask, they’re either a boon to the market or one Instagram post away from “killing” something beloved by previous generations. In reality, they aren’t that complicated or unreasonable of a consumer group. Their demands are simple: quality products from ethical brands at a transparent and honest price that make them feel good about their purchase.”
– Hannah Keshishian, Automotive Analyst

Key issues covered in this Report

  • The impact of COVID-19 on consumer behavior and the auto market.
  • The effects of a US and global recession on the auto industry
  • How Gen Z and Millennial consumers approach car buying
  • How to create awareness for new vehicles for these demographics

Table of Contents

  1. 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

                                                                                                                                      About the report

                                                                                                                                      This market report provides in-depth analysis and insight supported by a range of data. At the same time, introductory and top-level content is provided to give you an overview of the issues covered.

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