NEW YORK: New car sales in the US are predicted to hit 18.5m in 2017, with millennials playing a crucial role in growing the market, according to a new study.
Research for the New Cars US 2016 report from market research business Mintel found that millennials entering the new car market were more likely (84%) to consider a new car for their next vehicle than car buyers overall (77%).
"The biggest opportunity for the US new car market is the millennial generation as they are the largest consumer demographic in the US and are hitting life stages often associated with a car purchase, such as receiving a promotion, getting married or having a child," noted Buddy Lo, Automotive Analyst at Mintel.
"What's more," he added, "as new cars get more expensive, the emergence of ride-sharing has provided consumers the opportunity to leverage their new vehicle as a way to pay for it."
Indeed, Mintel's research found that 15% of millennial car buyers in the US plan to drive for a ride-share service, compared to just 9% overall.
Millennial buyers were also more interested in technology innovations in their next vehicle (41% v 38% overall), especially infotainment (70% vs 52% overall).
"Connecting with car shoppers in a mobile-friendly format, as well as showcasing features that integrate phones with their car can win over millennials seeking convenience and utility," Lo observed.
The report also noted that the SUV and crossovers segments are continuing to find success, especially with female buyers: 63% said they were considering an SUV/crossover for their next vehicle purchase, compared to 57% of car buyers overall. Further, 68% of mothers expressed this view, compared to 59% of women without children.
"Cheap gas prices are a significant factor in why consumers are opting for additional cargo space and utility over better gas mileage as consumer preference shifts to slightly larger, more practical SUVs and crossovers, " said Lo.
"Interest from female consumers is helping drive sales in this segment and brands that tailor messaging to speak to the unique needs of America's female drivers should see continued success in the marketplace," he added.
Data sourced from Mintel; additional content by Warc staff