When it comes to top choices for a new car, Gen Y is growing up.
More Millennials – folks born from the early 1980s through the early 2000s – are drifting away from the compact cars that got them through college or their first jobs and moving into roomier crossover SUVs, considered optimal for feeding their addictions to sports and an active lifestyle, as well as for starting a family, a new study finds.
With the leading edge about age 32, many also have better jobs with incomes that can handle the generally more expensive vehicles.
“You can throw your bike into the back of an SUV. You can’t do that with a small car,” said Chris Travell, a vice president for Maritz Research, which conducted the study that included results from 122,000 participants.
The study finds that cars remain top choices for Millennials overall, but the percentage considering a small car has fallen. For instance, 13.2 percent said they were considering a compact car in 2008, such as a Toyota Corolla or Hyundai Elantra. Last year, it was down 3.5 percentage points to 9.7 percent, Maritz says.
At the same time, compact crossover SUVs have made some of the biggest gains. In 2008, 6.4 percent of Millennials expressed interest in buying a new, smaller-size SUV, such as a Honda CR-V or Ford Escape. Last year, that figure climbed 1.1 percentage points to 7.5 percent. For larger SUVs, such as a Ford Explorer or Hyundai Santa Fe, the increase was 1.7 percentage points.
They are findings that automakers need to take seriously. Gen Y consumers now account for 26 percent of new-car retail sales, surpassing the older Gen X generation ahead of them at 24 percent, a J.D. Power and Associates analysis found recently.
Gen Y craves luxury, and once Millennials get it, they don’t want to go back, Mercedes-Benz USA CEO Steve Cannon told reporters.
As for all the talk about Gen Y’s supposed indifference to cars, they are, indeed, stepping up to buy.
Cars are “just so wired into American culture,” Cannon says.
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