It started out innocently enough as a conversation about Christmas gifts. “People my age value experiences over material things,” my 21-year-old told me.
I assumed he was just politely asking for cash and didn’t think much of it.
Then, during a recent meeting with Ward’s editors,sales analyst George Pipas used almost exactly the same words to explain the entire Millennial generation, people born between the late 1970s and late 1990s, feel the same way my son does.
In other words, the children of Baby Boomers do not aspire to vehicle ownership like we did.
Instead of daydreaming about buying aExpedition they can use for camping trips with friends and family, many Millenials may want to rent the big SUV for just the camping trip, Pipas explained. The vehicle is just another element of the experience, not the foundation for it.
The next weekend they might rent a canoe.
That sent a chill down my spine.
Millenials, otherwise known as Gen Y, or Echo Boomers because they are the children of Baby Boomers, are the linchpin of most optimistic long-term automotive growth forecasts.
Numbering about 75 million in the U.S., alone, they are the largest and most influential demographic since their parents.
They have been the apple of every mass-marketer’s eye for the past 10 years and are predicted to be a major driver of new-vehicle sales.
Based on the assumption that Millenials and even younger generations would exhibit the same buying patterns as their parents, Jim Press, then president ofMotor Sales U.S.A., used to predict the U.S. eventually would see 20 million annual sales, far exceeding 2000’s 17.4 million record.
In 2005, Press told attendees at the Management Briefing Seminars in Traverse City that he loved to visit hospital maternity wards. “Every one of those little baskets is 20 purchase cycles,” he said.
still is doing well. It is battling GM for global dominance, and Ward’s forecasts it will eclipse Ford for the No.2 spot on the full-year U.S. sales chart.
But there has been little talk of 20 million-unit years lately. Ward’s is expecting 2007 sales to end up at a little over 16 million units.
The housing crisis, tough new fuel-economy legislation and sagging consumer confidence have most forecasters predicting 2008 will be an even weaker sales year.
And now wrong assumptions about future buying behavior may pull the rug out from under rosier long-term forecasts.
According to most recent studies, the average college student now owes about $20,000 in student loans at graduation, virtually assuring that a new-vehicle purchase will not top many recent grads’ to-do lists. Now some forecasters such as Ford’s Pipas are suggesting these future consumers may not even want a new vehicle, even if they can afford one.
It all points to a very sobering beginning for the New Year.
Then again, many Boomers will remind that they started out rebelling against the materialism of their parents, and then 20 years later became card-carrying members of the Me Generation, the most conspicuously consumptive generation ever.
But the credibility of the source is, unfortunately, suspect. Remember, you can’t trust anyone over 30.