Millennials currently represent the majority of car buyers and will represent 40% of the car-buying market in 2020. Determining how to sell cars to Millennials has been the topic of automotive discussions for a couple of years now. When will they buy? What will they buy? How are they buying? 

Understanding how Millennials are choosing to buy their vehicles is integral to the success of a dealership in 2019 and beyond. The Millennials who do own cars are driving 2,000 more miles per year than their baby boomer counterparts. But not all Millennials are buying cars. With the surge of ride-sharing services, the need to own a car is no longer necessary. Millennials who live in cities are less likely to buy cars than those who live in the suburbs. Geography and life choices are the most decisive factors in Millennial car ownership.

Millennials aren’t killing the automotive industry, but they are more informed than any previous generation. This can likely lead them to make a transportation decision that isn’t 100% attached to vehicle ownership. With more options and knowledge than ever before, Millennial buyers are choosing to be patient, and resourceful when it comes to car ownership. With Millennials being stifled by student loan debt, it is difficult and impractical, for them to make a vehicle purchase like their parents did. A vehicle is simply a vehicle and not a status symbol. Many studies have shown that Millennial consumers prefer experiences over items.

Understanding how Millennials view vehicles is vital to the success of your dealership.  You may need to investigate different revenue streams that can better reflect their buying habits.  

With economic factors being the main reason a Millennial is not buying a vehicle, this webinar from CarGurus will be going over What Matters to Millennials in 2019. 

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Edmunds has forecasted the 16.9 million new vehicle sales will take place in 2019.

With strong economic indicators such as affordable financing rates and a stable employment rate, it stands to reason that 2019 will finish strong for auto dealers. 

Although sales of new vehicles do look to be about 400,000 less than they were in 2018 that can be explained by a slow Q1 to open up the year.

Electric Vehicles, Plug-in Hybrids, and Traditional Hybrids are on pace for a record year. These Green Cars are on projected to sell over 700,000 units for the second straight year. That number has doubled in the last decade and is expected to double again in the next decade. 

Although Green Cars are on a record pace, they account for a small number of sales.  Currently, Green Cars are responsible for 4% of new vehicles sold in the U.S.

While today’s audience for Green Cars is limited it is a market that is expected to grow rapidly.

States like California and Texas are seeing over 10% of their drivers using Green Cars. To date, California has sold half a million Green Cars. With 37 states now offering incentives and tax or fee exemptions, it is only a matter of time before the market share of Green Cars is above 10%. An increase in charging stations and miles driven between charges will also increase market share.

These Green Car projections should impact the structure of dealership fixed operations, and dealers need to account for this shift to electric vehicles.

The automotive industry is a crazy place to be right now. The disruptive Uber-isation of the industry has presented itself with many challenges and rewards. It is now easier than ever to get from point A to point B, with more choices available.  As with other industries, disruption will lead to obsolescence (for example, taxi drivers are leaving in droves).

Electric vehicles, subscriptions, self-driving cars, companies threatening the dealer model, and more, we’re going to be seeing changes in the way vehicles are owned, sold, and serviced.  

In a recent interview with Jeff Bezos, he said, "If you think about the auto industry right now, there are so many things going on with Uber-isation, electrification, the connected car — so it's a fascinating industry,"It's going to be something very interesting to watch and participate in, and I'm very excited about that whole industry."  The Amazon CEO is investing 700 million dollars in automotive technology.

Warren Buffet sees opportunity as well.  He’s actively acquiring dealerships.

Adapting to change will be the biggest differentiator for success in the industry. Subscription services haven’t taken off like some thought they would years ago, but if or when they do are you prepared to adapt and go full steam ahead with a subscription model for your customers?

Regardless of the changes that will impact this industry, relationships has been a constant.  People want to trust the sales person and the dealership they are purchasing a car from, and this is a good place to invest your resources.  Developing a strong CX strategy and executing on it will help you bolster your organization against dealership threats.

As we have seen with the evolution of the internet it is as important as ever to train and develop best practices to take your dealership to the next level in sales, marketing, and customer service. If you are lacking in one of these areas you will struggle to obtain a large portion of any market. Constantly be adapting and changing how these operations are interacting with each other as well as the customer and you will set your dealership up to be successful now and in the future. The best businesses, and industries, are ready to respond to change as soon as they see it.

With Jeff Bezos and Warren Buffett being so optimistic about the future of automotive it is only appropriate that we do the same and embrace the change we are about to see in the industry.