Today’s Canadian car shoppers and buyers of the future will need to be approached differently in terms of how products and services are being sold to them, according to a recent study from Canadian Black Book.
This is because of the changing demographics and expectations among consumers. The study, conducted by Ipsos, reveals that only 48 per cent of consumers surveyed between the ages of 18-34 currently own or lease a vehicle — versus 69 per cent of those aged 35-54, and 77 per cent of consumers aged 55-plus.
“As we dissect this research we are finding some very telling statistics that we monitor from year to year, which help us understand developing trends and allow us to offer this information to the auto industry in Canada,” said Brad Rome, President at Canadian Black Book.
The study looks at the differences between several Canadian demographics, and considers how these consumers shop, their expectations, and any lack of knowledge they may have when it comes to vehicle shopping, buying and ownership.
The report indicates that younger consumers (51 per cent) are more likely to purchase a vehicle within the next 24 months. In the 34-54 age middle group, 53 per cent plan to buy a car within that same period, and only 37 per cent of consumers in the 55-plus age group are likely to do so.
Nearly one in three Canadians (29 per cent — a two point increase from 2018) would also consider fully purchasing a vehicle online. And of the three groups more inclined to do so: 43 per cent of younger buyers are more open to buying online — up 7 per cent from 2018. In comparison, only 31 per cent of middle group consumers would consider doing this, and 16 per cent of customers aged 55-plus are open to conducting the full vehicle purchase online.
Furthermore, men (36 per cent) are more likely than women (22 per cent) to consider buying a car online. Families are at 40 per cent,and those without are 24 per cent likely to consider purchasing their vehicle online.
Two in 10 Canadians are also more inclined to reduce the number of household vehicles over the next two years. The younger generation is the most likely at 35 per cent; the middle group at 19 per cent; and only 12 per cent of those over 55 years old will be tempted to reduce the number of cars they own during that period.
That older generation (63 per cent) is also more likely to have traded-in a vehicle than the youngest group (29 per cent).
“This directly correlates to experience in the market and why the industry needs to treat these consumers differently, in how they market, sell and service them along the ownership journey,” says Brian Murphy, VP Research and Editorial at Canadian Black Book.
It’s also no secret that new mobility services are acting as disruptors in the transportation industry, and are pushing its evolution away from what consumers are traditionally accustomed to. For example, 12 per cent of Canadians are now reliant on ride-sharing. This includes 12 per cent of 18-34 year olds, 9 per cent of consumers aged 34-54, and 4 per cent of those aged 55-plus.
Income range and the level of education directly influences the buying decision of whether a consumer will purchase a new or used vehicle, according to CBB. Sixty-five per cent of consumers with university educations and the same percentage of consumers in a household making over $100K per year will buy a new vehicle. To compare, only 36 per cent of those surveyed in households making less than $40K annually intent to buy a new car.
“Many of these trends might be what you would expect to see, however, seeing the actual numbers could serve as an eye opener and help determine strategies for OEMs and dealers moving forwards,” said Murphy.
