How well do you know your customer? Have you looked at the changing market and asked yourself why sales are down?
Steven Szakaly, Chief Economist for the National Automobile Dealers Association, stated “the average new car buyer is now 51.7 years old and earns about $80,000 a year. That’s great news if you’re selling vehicles to someone born between 1946 and 1964. But if your dealership is spending marketing dollars to attract the ones born between 1981 and 1996, aka millennials, you need to be aware of how much they make on average, what it is they are looking for, and more importantly how much debt they have.
Because the Millennial generation is poorer, taking four millennials to replace one boomer in terms of economic impact.
According to Millennial Money survey, the average student loan debt of millennials surveyed was $35,921 dollars and while they may not have mortgage debt like the older generation, it’s only because they are setting new records for living with their parents. “A whopping 30 percent of millennials move back in with mom and dad after college.”
“The auto industry must prepare for a challenging demographic shift as baby boomers age and millennials gain more buying power.”
Those facts may spur you to look at the financing offers you have in place. “Many millennials do not have good credit ratings- yet. And this affects the share of subprime loans ( those made to Americans with credit ratings below 600) that many lenders are making.
According to USA Today, the average price for a new car reached $33,363 and used car prices hit a record of $16,800.
“Boomers don’t need big family vehicles anymore and millennials don’t need them yet. As a result, large SUV sales have dropped dramatically while small crossovers are hot. Back in 2004, small cars made up only 13% of the US market , but today it is 21%.”
So your advertising budget and especially your message really needs to be in line with what vehicles you are promoting and who you envision selling them to.
Ford is a good example of a brand which has started promoting what they call their “super segment” pool of vehicles. Ads promoting Fusion, Focus, Fiesta and Escape are appealing to the younger buyers and they’ve grown this super segment to 50% of their sales. Amy Marentic, group manager for Ford’s small and medium cars, “admits it is a mind shift for dealers who historically relied on trucks. She likened it to McDonalds building its business on the success of the Big Mac, but now it must appeal to more-nutrition-conscious consumers. The super segment is our under-400 calorie menu.”
The generation of buyers are changing. Is your dealership keeping pace with the shift?
JVS Marketing is an expert in the Automotive Industry.
The design team specializes in automotive strategies designed to drive traffic. Period. It is what we do.
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