Automakers are turning to Baby Boomers to market their products, and there is a really simple reason for that: that’s where the money is.
Baby Boomers’ retirement savings may have been creamed by the financial crisis and their inheritances shrinking as parents live longer and need expensive care, but Boomers are buying new cars like never before.
People age 50 and older now buy more than 6 of every 10 new vehicles sold — 62% — says a new study from J.D. Power and AARP. That’s up sharply from 39% in 2001 when Power began tracking the data.
For the Detroit automakers, Boomers now account for 67% of sales.
“The amazing thing is the retirees. They’re coming in waves,” said Dan Frost, owner of Cadillac of Novi and also Chrysler-Jeep-Dodge-Ram dealerships in Michigan. “They used to be cash buyers. Now we’re getting them into leases so they come back in a few years.”
The flip side of the research: Forget their kids. Buyers age 18 to 34 now are just 13% of the new-car market — down from 24% in 2001.
“Boomers can afford to buy new vehicles. Millennials cannot. The numbers don’t lie,” said Mark Bradbury, director of integrated marketing at AARP Media.
The post-WW II Baby Boom is defined by demographers as Americans born from 1946 through 1964. Millennials were born after the late 1970s.
The research calls into question automakers’ current rush to court younger buyers through social media or targeted reality shows, such as Ford’s “Escape Routes.” True, some Boomers spend significant time on social media and watching shows aimed at their children and grandchildren, but until the incomes of more Millennials stabilize and grow, the question will persist.
“You can’t build any loyalty among people who are not paying attention,” said AARP’s Bradbury.
Americans older than 50 do make up a larger percentage of the population now, about 42%, up from 37% in 2000, Census data show. Their share of new vehicle purchasing grew at a much faster clip in the same period.
18- to 34-year-olds’ new-car market share declined, even as their portion of the population stayed about the same — 23.2% in 2010 vs. 23.8% in 2000.