Millennials, a generation that some disregarded as not being interested in driving, have rapidly become the largest generation of new car buyers in the U.S.
While it’s traditional for each generation to eventually overtake the previous one, Millennials – born between 1977 and 1994 – have done it at an “astonishing” rate, according to Tyson Jominy, J.D. Power vice president of data & analytics.
“Demographic information moves very slowly, but last year Millennials took over in April during the peak of the coronavirus pandemic. We thought it was kind of a blip, but it’s only increased since then,” he told CNBC. “It shifted overnight, and it has gotten faster every month.”
Most impactful for the current U.S. market is that Millennials for the first time this year will be the largest buyers of midsize, full-size and heavy-duty pickups. The segments are known as light-duty trucks. They represented 2.85 million sales, or 20%, of the U.S. new vehicle market in 2020.
Amid the burgeoning coronavirus pandemic last year, Millennials overtook sales of larger pickups from Baby Boomers – born between 1946 and 1964 – and are on pace this year to beat Gen X buyers – born between 1965 and 1976 – as the top buyers of mid-size and compact pickups, according to J.D. Power.
“It’s a coming-of-age story for millennials and maturing and getting promoted in their jobs and coupling and procreating and moving to the suburbs and all that normal stuff,” Jominy said.
Millennials’ rapid ascent to become the largest demographic of U.S. car buyers corresponds with another generational shift, according to Jominy.
Baby Boomers overtook the pre-Boomers, or the Great Generation, as the largest buyers when the Ford Mustang was rising in popularity in the late-1960s and 1970s. Now, Millennials have overtaken them with the introduction of the first all-electric Mustang Mach-E crossover.
“You sort of have this Mustang for each generation,” Jominy said.
While the average buyer age for the Mustang Mach-E are Gen Xers at the age of 50, J.D. Power reports Millennials are also the largest buyers of EVs. J.D. Power reports they’ve represented 35% of new EV purchases this year compared to Baby Boomers at 29% and Gen X at 26%.
While Millenials are the top buyers in 17 of 27 vehicle segments, Baby Boomers still dominate more expensive, luxury vehicle segments.
“The higher the price the vehicle the more likely we are to see Boomers in it,” Jominy said.