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Gen Y Buyers Will Be 40 Percent of New Car Market in 2012

A new automotive buying by Deloitte study focused specifically on Gen Y buyers (born after 1984) shows they will be 40 percent of the new car market in 2012 and manufacturers better make sure they have a good dealership experience or they will never buy a car from that brand again.


The study suggests that new car dealers are going to have to revolutionize how they sell cars to younger customers. They’re going to have to offer 24-hour test drives, beef up their Internet sales department, and pretty much take the salesperson out of the process as much as possible. When a salesperson is involved, the process better go smoothly or the customer is lost for life.

Also interesting about the study is the effect Gen Y has on their parents. Gen Y has a large amount of influence over their parents – slightly more than 61 percent say they directly influence their parents final purchase decision. That should further drive how manufacturers market their vehicles.

"Gaining Speed: Gen Y in the Driver's Seat," is Deloitte's third annual Gen Y automotive survey. This year's survey, however, not only expands on the knowledge learned from previous years but also opens avenues not fully explored by including responses from baby boomers and Generation X. This new analysis takes a deeper look at Gen Y's attitudes and perceptions of vehicles and the auto industry, and offers unique insights into generational gaps and year-to-year shifts.

Conducted in collaboration with The Eli Broad Graduate School of Management at Michigan State University, the survey indicates that Gen Y consumers have an increasingly positive view of the automotive industry on everything, from researching and shopping to vehicle trustworthiness, but cross them once and they’re lost as a customer forever. They are fairly unforgiving with 52.4 percent of respondents agreeing with the survey statement, "A bad experience with a salesperson would cause me never to consider that brand of car again."

What’s interesting about Gen Y is that focus on the dealership experience. They must have a strong interest in customizing their cars because the actual car shopping experience is three times more important to Gen Y than vehicle design.

Joe Vitale, who leads Deloitte's north central region automotive practice and Generation Y research program, said, "This shows that much like their demand for technology, the shopping experience for Gen Y must be experiential, as well as connect and integrate to their ‘personal technology cocoons’ across the evaluation, sales and post-sales cycles."

Craig Giffi, vice chairman and automotive practice leader, Deloitte, said, "For baby boomers, technology is largely utilitarian and defined by safety features, whereas Gen Y views technology as a more personal feature. They see their cars as personal technology cocoons, and expect so-called 'cockpit technology,' where they can continue to run their lives uninterrupted, from messaging to music to the latest smart phone apps, 24/7."

Some interesting trends emerged about Gen Y's opinions on the dealership experience and vehicle shopping.

  • In visiting a dealership, Gen Y respondents said they are still largely unsatisfied and anxious with the overall experience, and suggest that the main reason for a dealer visit is to test drive a vehicle.
  • A little more than 82 percent of Gen Y respondents, up significantly from 69 percent in 2009, said they'd like to test drive a vehicle over 24 hours.
  • The survey also revealed that more than 57 percent would prefer to avoid face-to-face interaction with a dealer altogether and work with them solely over the Internet. These findings suggest that dealers could benefit from increasing transparency with consumers by making basic product information more readily available.