How Do You Sell a Car to a Millennial?

Twenty-somethings are unemployed, living with their parents, and driving less. But Chevrolet's youth guru still sees a big market in generation stuck. 615_2012-Concept-Chevrolet-TRU140S-001.jpg

The Chevrolet Tru 140S, a new concept car aimed at Millennials; Photo: Chevrolet

The auto industry is facing a conundrum. The Millennial generation, those Internet-addled 80s and 90s babies, now make up 40 percent of the potential U.S. car-buying population. Unfortunately, they just don't seem that interested in buying cars.

Just 27 percent of new vehicles are purchased by 21 to 34-year-olds, according to the industry analyst CNW Market Research, down from about 38 percent in 1985. And while CNW says about a third of those lost customers have migrated to the used vehicle market, most seem to have simply given up on owning a car altogether. The percentage of teens and twenty-somethings with drivers' licenses has dropped in recent years, too.

The disinterest might be the result of a bad economy. It might be because of a cultural shift away from cars. But like its industry peers, General Motors is still trying to figure out how it can get Millennials off their laptops and into showrooms. The man they've put in charge of the effort is 31-year-old John McFarland, whom the Wall Street Journal has dubbed Chevrolet's "youth emissary."

I recently spoke with McFarland about the Millennials, what they mean to the car industry, and Chevy's efforts to woo them. Here's a summary of our conversation with some quotes from McFarland.

Can the auto industry afford to ignore the Millennials?  

"To look at pure dollars [Millennials] spend, and end the conversation there, is a bit myopic."

It might seem obvious that auto makers can't simply turn their backs on an 80-million-strong cohort. But despite their estimated $172 billion in spending power, Millennials have a reputation for being a bit cash-strapped, thanks to the recession. We're the generation known for putting off marriage and home ownership in favor of living with our parents. 

McFarland says there a few reasons car makers need to look past that reputation. First, the Millennials are the most highly educated demographic group in American history, and while they may have graduated into an economic doldrums, they will eventually be the driving force in the market. After all, educated consumers tend to be wealthier consumers. But even now, the Millennials are far more influential than even their spending habits would indicate, he argues. There two main reasons. First, young people dominate the web, so their voices play a disproportionate role shaping consumer consciousness. Second, they tend to have very close relationship with their parents, who treat them as peers when it comes to making household decisions. Here's McFarland:

Rather than a kind of an authoritarian relationship where it's "I am the parent you are the child," you see a lot of confidence and empowerment, this idea of a family unit where the kid has a voice. They have a voice at the table from day one. They have a relationship with their parent, and it's much more peer than it is necessarily authoritarian. As a result on things such as cars, vehicles, and purchases in general, their voice is heard and considered ...

Whether the money is coming directly from their back pocket or they are influencing their friends or their parents or their peers, or heck, even their grandparents, you can't talk about this young consumer without really acknowledging just the amount of influence that they have. And so to take a look at pure dollars that they spend, and end of the conversation there, I think is a bit myopic.

How can car companies convince young consumers they need to buy a car?

"We're not trying to force people to love cars again. What we're trying to do is understand."

It's not that the cars aren't relevant to young people's lives, McFarland says. Rather, "we just think that nobody truly understands [the Millennials] yet, and hasn't given them what they want. So we think it's a real big opportunity."

That sounds a bit like the eternal optimism of a marketing executive. But what does it mean in practice? For starters, Chevy is trying to meet Millennials on their own terms, through the sharing economy. Businesses such as Zip Car, which let members rent cars for a few hours at a time in order to, say make a day-trip to Ikea, have been a hit among young urbanites. Chevy has partnered with RelayRides, a young company that lets users rent out their personal vehicles to other members of the service. The technology in GM's cars allows them to streamline the process. From our interview:

Rather than in the past saying how do we get people to buy our cars and stop this trend, we're saying no, how do we understand what's going, and how do we embrace it? And how do we understand that, at some stage of their life, they're going to see more benefit or value in a RelayRides approach where they can rent a car as they need it, and maybe eventually come back into [owning] a vehicle if we meet their needs.

How to meet their needs, of course, is a tricky question unto itself.

Presented by

Jordan Weissmann is a senior associate editor at The Atlantic.

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