Boomers the key to auto industry sales – ZoomerU

Boomers the key to auto industry sales

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Five years ago the University of Michigan Transportation Research Institute made news with a study that showed car buyers were getting older — and the key to future success would be the Baby Boomers. Adults in the 50-64 year old age group were 15 times more likely to buy new vehicles than 18-24 year olds. Further reflecting the weakness of the 18-24 year old segment, another study from the Institute showed that the percentage of 19-year-olds without a driver’s license had fallen below 70%, its lowest in almost 30 years.

“Collectively,” Institute reported, “the results show the industry’s success is still predicated on its ability to connect with older buyers.” Michael Sivak, who led the study, said “the probability of buying a vehicle per driver is highest for people between 55 and 64 years of age. That is probably surprising to many people because they think of much younger people being the target audience.”

Is the trend still holding? How does it apply in the Canadian marketplace?

According to Vividata Summer 2018:

  • 916,000 18-24 year olds  bought a car in the past 12 months, compared to 2,424,000 Boomers
  • If you want to change the younger group to the next oldest tranche, 1,372,000 25-34 year olds bought a car in the past 12 months, compared to 2,424,000 Boomers. So Boomers represented a big market than 18-24 and 25-34 combined.
  • 398,000 18-24 year olds say they intend to acquire a vehicle (new or used) in the coming 12 months, compared to 1,161,000 Boomers.
  • 799,000 25-34 year olds say they intend to acquire a vehicle in the coming 12 months, compared to 1,161,000 Boomers. So Boomers represent a much bigger market than either younger group and are just 36,000 short of equaling both groups combined

When you factor in price points, eliminating the very low end of the market (mostly in used cars), the Boomer dominance is even more pronounced.

  • 623,000 18-24 year olds and 846,000 25-34 year olds spent $10,000 to $20,000 on their most recently acquired vehicle. For Boomers, the number was 1,884,000 — 28% more than the two younger groups combined.
  • 682,000 18-24 year olds and 1,402,000 25-34 year olds spent $20,000 to $40,000 on their most recently acquired vehicle. For Boomers, the number was 3,599,000 — 72% more than the two younger groups combined.
  • 272,000 18-24 year olds and 575,000 25-34 year olds spent over $40,000 on their most recently acquired vehicle. For Boomers, the number was 1,297,000 — 53% more than the two younger groups combined.

The latest numbers confirm the findings: when it comes to automobiles, Boomers drive the market.

 

Today's Factoid

1,536,000

Number of Zoomers who personally hold investments and savings of $500,000 or more. No other age group is close. In fact, nearly seven out of ten Canadians (69.2%) with investments and savings of $500,000 or more, are Zoomers. Follow the money.   Source: Vividata Spring 2018.