Millennials vs Boomers is an oh-so-tired debate. Both generations have merits and both have tremendous value — and neither is better than the other. But when it comes to truck buying, Millennials have taken the lead over the Boomers, according to a new report.
This is of interest as for a while the Millennials were dismissed as being more interested in their phones and streaming services and users of Uber and less interested in their own vehicles.
“Demographic information moves very slowly, but last year Millennials took over in April during the peak of the coronavirus pandemic,” said Tyson Jominy, J.D. Power vice president of data and analytics, during a CNBC interview. “We thought it was kind of a blip, but it’s only increased since then. It shifted overnight, and it has gotten faster every month.”
According to Jominy, the Millennials, defined as people born between 1977 and 1994, have now become the largest consumers of midsize, full-size and heavy duty trucks and represent 20% of total sales of new vehicles according to data from 2020.
Diagnosing the shopping psyche of Millennials is challenging. So, asking what makes trucks appealing to them is a loaded question.
Sam Fiorani, vice president of global vehicle forecasting for AutoForecast Solutions, said that the push toward greener trucks is clearly resonating with the Millennials.
“Pickup trucks have become a core part of the North American profit center for General Motors, Ford, Stellantis and Toyota. Because of this, their marketing strategies will adapt to each new generation to keep the cash flowing,” Fiorani said. “While the ‘green’ movement seems to be antithetical to pickup truck sales, companies like Ford and GM have not given up that easily. With the new wave of trucks sport ‘greener’ features such as Ram’s eTorque, GM’s Active Fuel Management and Ford’s EcoBoost, and this is only the beginning. Fully electric editions of the full-sized trucks from the Detroit Three are on their way.”
We’ve already seen Ford launch the F-150 Lightning, a hybrid version of the F-150 and new Maverick hybrid; Rivian with the R1T; Jeep with an electric Wrangler; GM with the Hummer (and EV versions of the Silverado and Sierra coming); and, of course, you can’t overlook the Tesla factor.
Tesla, in many ways has helped change the conversation as electric vehicles relate to trucks. And even though it hasn’t managed to push out its own Cybertruck yet, Tesla is a brand considered hip by Millennials and even the Gen-Xers.
“Once the ‘green’ hurdle is crossed, it comes down to playing to the needs of younger buyers,” Fiorani said.
Today’s vehicles are loaded with technology and smart phone integration. When talking Millennials vs Boomers, that tech certainly resonates more with the Millennials who often use their phones in every aspect of their lives.
“Technology is permeating all new vehicles, which already aligns itself with today’s tech-savvy Millennials,” Fiorani said. “Their desire to accumulate experiences over physical things plays to the strengths of pickups where marketing highlights the go-anywhere image that comes with modern trucks.”
This is clear and evident as the increase in prevalence of in-vehicle streaming services is aimed directly at the younger generations. Every major automaker seems to have some form of pay-to-play streaming service in their vehicles with GM having OnStar but Ford, Stellantis and Toyota all having similar services. This may not appeal to the Boomers, but seems to get a pass from the Millennials.
You would think with the cost of trucks going upward year after year, combined with the supply-chain issues going on right now, it would be a deterrent for Millennials. But that doesn’t seem to be the case, according to Fiorani.
“With trucks in the dominant position in the US market, the higher prices of SUVs and especially pickups are pulling the average transaction price of vehicles upward,” he said. “The current shortage of new vehicles is forcing automakers to concentrate on better optioned and higher trim level models, driving up the average price of new vehicles even more. Younger buyers have become accustomed to paying monthly for the latest and greatest of everything. From their music services to their phones, Millennials pay for many things on payments so making six or even eight years of payments on a truck is not a big leap from a $1,600 iPhone, which can’t take you to the airport. For those more cost-conscious buyers, Ford and Hyundai hope that their sub-$30,000 compact trucks will be appealing alternatives to haul around their gear. Young buyers with more disposable income would opt for the likes of a Jeep Gladiator over the BMW 3-Series that might have appealed to their parents at the same age.”
Adventuring played to the social distancing that was going on during the pandemic. As such, more and more consumers, including Millennials, were seeking thrills and experiences outdoors. Thus, they wanted vehicles that were both adventurous and outdoorsy.
Fiorani said Millennials’ “desire to accumulate experiences over physical things plays to the strengths of pickups where marketing highlights the go-anywhere image that comes with modern trucks. The ability to throw mountain bikes, surf boards, snow boards or camping equipment into the back helps increase the desirability of pickups to younger buyers. Lifestyle trucks, such as the Ford Maverick, Hyundai Santa Cruz, Jeep Gladiator, and even the Rivian R1T fall squarely into the range where the more adventurous buyers will appreciate their capabilities.”
It was always nonsense to me that younger generations would be less interested in cars and trucks. A vehicle equals independence and freedom. Sure, the consumer tastes are changing and we are seeing a huge shift in the industry, even in the truck world. Off-road vehicles are back in prominence, and now with greener and even electric trucks, this is for sure an answer to the next-generation of truck buyers.
As the saying goes, you either adapt or die. Trucks, the most profitable part of the auto industry, will surely adapt.