TRAVERSE CITY, Mich. -- The auto industry must prepare for a challenging demographic shift as baby boomers age and millennials gain more buying power, the National Automobile Dealers Association's chief economist said today.
But for now, compared to the general population, buyers of new cars are getting older and richer, Steven Szakaly told the CAR Management Briefing Seminars.
The average new car buyer is now 51.7 years old and earns about $80,000 per year, while the average age of the population is 36.8 years old and the median income is roughly $50,000, Szakaly said.
“The fact they’re older and richer means they’re baby boomers. That means sooner or later they’re going to retire. As you leave the labor force you’re not driving as much and you’re commuting on a daily basis. You’re not driving kids to day care and sporting events,” he said.
But the millennial generation is poorer.
“It takes four millennials to replace one boomer” in terms of economic impact, Szakaly said. “There’s going to be this gap between baby boomers and millennials.”
But Szakaly doesn’t agree with those who assume millennials might not lust for vehicle ownership the way their boomer predecessors did.
“We firmly believe millennials will purchase vehicles. But they’re going to purchase them later.”
And he believes millennials will gain their place as income earners, even though they face challenges including student debt.